Claims

CONTACT A CLAIMS ATTORNEY

Important Guidance for Attorneys Handling Material Mistakes
If you discover an error in your legal work, we strongly encourage you to speak with a Lawyers Mutual claims attorney before contacting your client. Our team can help you assess the situation and develop a strategy for addressing the issue accurately and ethically. Timely communication is essential: a material error must be disclosed to your client as soon as possible (N.C. Rules of Professional Conduct Rule 1.4(a)(1)).


Consequences of Mishandling a Material Mistake
Failing to properly address a material mistake can lead to serious consequences, including:

  • Disciplinary action by the State Bar.
  • Increased liability in a malpractice claim, including claims beyond negligence.
  • Fee disgorgement.
  • Potential loss of malpractice insurance coverage.


Your Ethical Obligations
Once you become aware of a mistake that may harm your client’s interests, it is your duty to inform the client of any material facts related to their case (Rule 1.4(a)(3)). Your client’s interests must always come before your own, and withholding information to protect yourself is prohibited (Rule 1.4, Comment [7]).

If the mistake cannot be corrected, inform the client promptly and disclose any conflict of interest. In that case, you may need to withdraw from representing the client on that matter.


When a Mistake Can Be Corrected
If you believe the mistake can be fixed or mitigated, contact Lawyers Mutual immediately to explore our claims repair program. Before taking any action, ensure compliance with Rule 1.7(b) and obtain the client's informed consent to continue the representation.

Informed consent requires:

  1. Disclosing the material facts of the error.
  2. Informing the client of their right to terminate the representation.
  3. Informing the client of their right to seek other counsel. 


Ethical and Legal Considerations
When informing your client about the mistake, remember that the ethics rules prohibit settling a legal malpractice claim with an unrepresented client unless the client is advised in writing to seek independent counsel (N.C. Rules of Professional Conduct Rule 1.8(h)(2)).

Mishandling a mistake can lead to severe disciplinary consequences and increase your liability. For example, failing to disclose a mistake could lead to claims for breach of fiduciary duty or punitive damages. Moreover, concealing an error may extend the statute of limitations for legal malpractice claims under N.C. Gen. Stat. §1-15(c).


Malpractice Insurance Reporting
You are required to report any potential claims to your malpractice insurer annually. Failing to do so could result in a loss of coverage for claims presented after the policy year if the claim should have been reported earlier. Reporting mistakes promptly to Lawyers Mutual can also help resolve the issue before a formal malpractice claim arises.


For Further Assistance
For more detailed guidance on how to ethically communicate with a client about errors, please refer to our risk management practice guide, "I Made a Mistake. What Now? Don’t Make It Worse!"