The Duty to Disclose a Potential Claim
Where a lawyer fails to make such a disclosure and takes steps to conceal a mistake or error, some jurisdictions have found that this constitutes ethical misconduct subject to discipline.
October 21, 2024 at 11:57 AM
6 minute read
EthicsPicture this: it is the start of a rather slow work week and a partner at the law firm you work at approaches you. "Do you remember that transaction for Client A that my group has been handling for the past six months? Well, it fell through, and Client A just received a complaint filed by the other side. I have a call with them this afternoon; does your litigation team have capacity to take this one on?" This hypothetical leaves room for all sorts of answers, qualified or otherwise. Assuming that you play along and have to give a response to the partner, would your reply be any different if you owed this partner a favor for helping you out on a case not long ago? What about if your litigation team could really use the work, you knew that Client A paid their bills on time, and that billing rates were top tier for matters worked on for this client?
We can cut to the chase. Any response should include some sort of inquiry as to the firm's role in the representation of Client A and, more specifically, whether the firm (conceivably) could have had a role in the cause of the failed transaction and subsequent litigation. Did the partner, for example, draft or sign off on a faulty provision in the parties' agreement that contributed to the transaction having fallen apart? If the failed deal may have been caused, at least in part, by an error on the part of the firm, then a different kind of discussion with the client may be required by the Rules of Professional Conduct (RPCs). This article discusses the duty to self-report potential claims that a client may have against the lawyer and the interplay between this duty and the rules governing disclosure and conflicts of interest.
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