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DO YOU HAVE TO TELL YOUR CLIENT THAT YOU JUST BLEW THE STATUTE OF LIMITATIONS? CALIFORNIA RULES OF PROFESSIONAL CONDUCT 3-500

DO YOU HAVE TO TELL YOUR CLIENT THAT YOU JUST BLEW THE STATUTE OF LIMITATIONS? CALIFORNIA RULES OF PROFESSIONAL CONDUCT 3-500

Posted by Anthony Radogna | Aug 30, 2017 | 0 Comments
Rules of Professional Conduct 3-500 states in part:
"A member shall keep a client reasonably informed about significant developments relating to the employment or representation, including promptly complying with reasonable requests for information and copies of significant documents when necessary to keep the client so informed."
According to the rule, not only must you respond to the client when there are reasonable requests, but you must keep a client reasonably informed about significant developments, even if no requests are made by the client regarding those significant developments. 
Do these significant developments include errors that you have made during representation? Does this include informing your client that you just blew the statute of limitations?
I would state that the answer is yes.
The scary part for the attorney, that just blew a statute, is that the statute being blown might simply be the tip of the iceberg to other ethical violations hidden below.
For example, if you handled your client's personal injury claim perfectly but simply forgot to file the lawsuit to preserve the statute, then you may come out of this without discipline.
However, if you blew the statute, because your office is not well managed, your calendaring system is constantly missing key dates, you haven't called the client back in 7 months after repeated requests to do so, you failed to competently represent the client during the period before the blown statute…you can see how the scenario can change and how discipline is a real possibility.
Some things to think about:
  • You have a duty under Rule 3-500 to provide status to the client regarding their matter. This of course includes keeping them up to speed on significant developments. Another simple example of this would be regarding any settlement offer made by the insurance carrier.
  • If the error you made is a blown statute, then you must inform your client that you blew the statute and that they no longer have a claim against the third party or third parties' insurance carrier.
  • In some states, you are not only required to tell the client the error, but also that the client has a malpractice claim against you. California however, is not one of those states in which you must inform the client about their malpractice claim. (Please see California Rules of Professional Conduct rule 3-410 regarding liability insurance disclosures at the time retained)
  • Prior California ethic's opinions suggest that you have a duty to disclose the error, but not that the client has a valid malpractice claim against you.
  • If you believe you committed malpractice, you must promptly inform the client of the factual information pertaining to the client's claim.
  • Courts have stated that you have a fiduciary obligation to disclose material facts to a client, those include acts of malpractice.
  • You must disclose the facts that surround the error.
  • There can be potential or actual conflicts present if you discuss or advise on the pursuit of the malpractice claim against you. The client should seek independent counsel in order to determine whether or not they have a viable claim against you.
  • If you are thinking about continuing to represent the client, think long and hard about conflicts and what disclosures you need to give the client.
  • A good rule of thumb is to always memorialize any discussion you had with a client. This includes having a written record of your discussion with the client regarding the error.
  • Also, make sure you provide the client with a full and complete copy of their file and give them back any original docs.
For further information please refer to the following:
Olds v. Donnelly, 150 N.J. 424 (N.J.,1997)
California Rules of Professional Conduct rule 3-500
California Rules of Professional Conduct rule 3-410
California State Bar Formal Opinion 2009-178
Business & Professions Code Section 6068(m)
Beal Bank v. Arter & Hadden LLP, 42 Cal.4th 503 (2007)

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