"A Focus on Legal Malpractice Prevention in Plaintiffs' Personal Injury and
Domestic Relations: Two Particularly Vulnerable Areas of Practice"

By Robert W. Martin, Jr., Esq.

The literature and statistics each year confirm that malpractice claims filed against attorney representing personal injury clients consistently account for more than 30% of all malpractice claims filed against attorneys nationally and in each jurisdiction. Claims filed against family law attorneys are not far behind. What makes these two groups of practitioners so vulnerable? No one really knows for sure, but "client communication" and "client selection" are two areas that might provide some answers as well as some malpractice claims prevention techniques.

1. Personal Injury Attorneys

With all due respect to those of you who practice in this area (and I was one too), as a group they have awful client communication skills. Oh yes, they are persuasive speakers (generally), but not great listeners. The do not always listen to what the client wants and instead assume that they will be able to convince the client to accept a settlement offer down the road if it is "reasonable" in the mind of the attorney. They mistakenly believe that when clients say "[I] do not care about the money, it is the principle," the client will change their minds when a reasonable amount of money is offered to them.

As a group, personal injury attorneys are feeling the pressure of competition and the pressure to provide for their families. Consequently, they may, and usually do, work under the stress of high caseloads. They convince themselves that since few of the cases will actually go to trial, it is not a big problem. Each case may get adequate attention within the law firm (discovery, communications with an insurer, etc.) But due to the firm's high volume of cases, individual clients are not routinely informed of the status of their cases and client telephone calls are not returned promptly. Clients become agitated.

What can you do if you practice in this area to lessen the possibility of a claim? 1) Listen to what the client wants and decide whether you will be able to deliver. If not, try to persuade the client to adopt a more reasonable expected outcome (and put it in writing), or jettison the client. Do not tell the client that the problem is yours now and that the client has nothing to worry about. 2) If you cannot return all calls, have someone on your staff do so. Instruct your staff to immediately tell you when a personal call from you is warranted, and when it is, you should make it. 3) Keep track of all of your time, even in contingent fee cases. If you have an associate, chances are you make him/her do it and, for some of the same reasons (i.e., internal controls, determining whether a certain case or type of case makes any money for you), you should do so yourself.

Another reason for keeping track of your time is that it will generate a monthly statement for all of your clients, which you can then send to those clients. If you like, you can delete the time entries from the final statement sent to clients, but at least once a month, each of your personal injury (and other) clients will get a communication from you showing what work you have done for them - for free! Obviously, if you have not done any work for a particular client during the month, you do not need to send that client a statement reflecting that fact, but an added bonus is that you will be reminded of each and every client at least once a month.

2. Family Law Attorneys

Again, as a gross generalization and with no intent to be disrespectful, many of the claims made against family law attorneys also find their genesis in failed client communication skills and errant client selection practices. Where personal injury attorneys may point their large case loads as a reason for not communicating with clients as often as they should, family law attorneys often point to the number of times clients call and the times of their calls (nights and weekends when domestic problems tend to surface) as the reason for their communication failures.

Similarly, family law attorneys sometimes commit two fatal errors when they agree to represent a new client: 1) they fail to get a sufficient retainer and/or fail to make sure it will be replenished before the case proceeds to a point where the attorney is forced to continue with only the hope/promise of future payment; and 2) the attorney fails to explain to their clients how they conduct their practice. Civility is and should be a goal of the legal profession, but it is rarely the goal of two estranged married/formerly married people. If the client is not comfortable with the manner in which the attorney conducts his/her practice, the client should not be a client.

What else should family law attorneys do to diminish their risk? 1) As with personal injury attorneys, they should take/return client phone calls or at least have their staff do so. When, the client is an hourly billed client, the client would probably rather receive the requested information/update from the staff anyway since it will be the cheaper, if not "free." 2) Ask the client not only for a retainer but a "replenishable" retainer or a "security deposit" retainer. With a replenishable retainer, the engagement letter would say that once the amount of retainer held in the client trust account drops below a certain amount, the client would be required to replenish it. With a security deposit retainer, the engagement letter would say that the attorney will hold a certain amount in the client trust account until the end of the matter and then the last bill will be applied towards that amount with the difference refunded to the client. Neither of these methods is foolproof and may not totally protect you from a deadbeat client or a judge who will not allow you to withdraw from a case due to a client non-payment, but they will help.

Despite efforts at tort reform and the increased use of mediation as a way to resolve domestic disputes, neither personal injury attorneys nor family law attorneys are in danger of extinction. Indeed, both areas of practice can be very satisfying even if "dangerous" from a risk management perspective. Forwarned is forearmed!

CASE NOTES

A compendium of risk management cases

Client Under Conservatorship Could Not Enter Contact, but Could Form Attorney-Client Relationship, Francis v. Piper, 597 N.W.2d922 (Minn.App. 1999).

Francis' brother, Heine, retained attorney Piper to draft a will. Piper eventually drafted a succession of three wills for Heine, none of which left anything to Francis. The third and final will left all of the brother's estate to a waitress at a deli Heine frequented. (The waitress had referred the brother to Piper.) Upon Heine's death, Francis sued Piper for malpractice, alleging that Heine had been under conservatorship, lacked testamentary capacity, and suffered from the effects of undue influence. Piper moved for summary judgement, claiming that Francis lacked standing to bring a malpractice action against him. The trial court granted the motion. Francis appealed the trial court's ruling, and also raised on appeal the new issue that she was able to bring a direct action against Piper because Heine's conservatorship prevented formation of an attorney-client relation between Heine and Piper.

The appellate court affirmed the trial court's ruling, holding that the evidence showed Heine did not intend to make Francis a beneficiary of Piper's services, and Heine knew Francis would be adversely affected by the second and third versions of the will. On Francis's direct action claim, the appellate court held that while existing Minnesota case law indicated that persons under conservatorship could not enter into contracts, tort principles could create an attorney-client relation between Heine and Piper. The appellate court found that Heine sought Piper's assistance on drafting a will, and reasonably relied upon Piper's advice regarding wills and the wills Piper drafted. The court found Heine's reliance created an attorney-client relation under a tort theory of reasonable reliance, which prevented Francis from maintaining a direct action against Piper.

Risk Management Comment: This case might have gone either way. In rejecting Francis's argument for the right to bring a direct action against Piper, the court may have found it important that Francis was not a beneficiary of any of Heine's wills - her interests were limited to intestate succession. But many courts are expanding non-clients' rights to sue attorneys. Had Francis been a beneficiary under Heine's will, the court likely would have ruled differently. The court also could have used the law of conservatorship to void Heine's will altogether. Instead, the court found an attorney-client relation between Heine and Piper resulting from the tort principle of Heine's reliance on Piper's advice.

This case underscores the fact that even where an attorney does not execute a retainer agreement, she still may create an attorney-client relation with a person that visits with her and reasonably relies upon her advice and/or work.

Case Two: The Appearance of Impropriety: What You Don't See Might Still Hurt You. Boyd v. Garvert, P.2d (Colo. App. February 3, 2000)

Colorado attorney Garvert represented Colorado residents Mr. and Mrs. Boyd in relinquishing their baby for adoption. She then represented Mrs. Boyd in a Kansas couple's adoption of the relinquished child. The Boyds successfully sue Garvert for malpractice, claiming she negligently failed to tell them of the Colorado law provision for pre-relinquishment counseling. They also contended that Garvert breached her fiduciary duty to them by constructively representing interests of the Kansas couple by promising to ensure completion of the adoption.

The appellate court affirmed the trial verdict for the Boyds. The court rejected Garvert's argument that the negligence and breach of fiduciary duty claims were duplicative, and held they were based upon different facts - the negligence claim arose out of her failure to advise them regarding counsel; the fiduciary duty claim stemmed from Boyds' allegation that Garvert was self-dealing and acting with a conflict of interest. The court agreed that there was enough evidence on both of the claims to send them to a jury.

At the time of the adoption, the Colorado statute requiring pre-relinquishment counseling did not specifically apply to adoptions outside Colorado (it later was amended to so apply). However, the court rejected Garvert's claim that she wasn't liable for failure to advise Boyds regarding the required counseling. The court opined that Garvert was held to a professional standard of care, generally established by expert testimony, and that the statute in question was not the sole source of Garvert's duties.

Risk Management Comment: An obvious lesson from this case is that attorneys handling interstate matters should carefully comply with the law and the standards of care in each state. Attorney Garvert unsuccessfully argued that Colorado law should not apply to the adoption, which took place in Kansas. In the end she was held liable for breaches of duty in Colorado, even though no actual proceedings occurred there.

A less obvious lesson also may exist here. Attorney Garvert argued that her alleged negligence was irrelevant, since the Boyds did not contest the adoption and admittedly did not want their baby back. But Garvert's clients clearly perceived that she was working both sides of the adoption. Although the appellate court doesn't discuss all the facts, apparently Garvert had her own reasons for completing the adoption, they, and the jury, might be doubly aggrieved by Garvert's failure to advise the Boyds about pre-relinquishment counseling. We wonder if the result on the negligence claim would have been the same without the added charge of self-dealing.

Remember, sensitivities ran especially high in family law and adoption matters. Attorneys should be extra careful to avoid not just actual conflicts of interest, but any conduct which might lead to the appearance of conflict or self-dealing.

*Reprinted with permission from the Montana Bar Association, publisher of the January 2000 issue of The Montana Laywer.

About the Author
Mr. Martin is a Regional Risk Manager with the Attorneys Liability Protection Society (ALPS). THE ALPS RISK MANAGEMENT REPORT
Inadvertent Disclosure of Confidential Client Information

By Robert W. Martin, Jr., Esq.

You are minding your own business and all of a sudden, your fax machine whirs to life. Moments later, you have in your hands the other side's theory of the case, all their perceived evidentiary problems and a proposed bottom-line settlement position which is much higher than any offer transmitted to you to date. What do you do?

When I posed a similar scenario to a group of attorneys at a CLE that I taught earlier this year, one or two in the audience were somewhat indignant that there was even a question about what to do. They felt very strongly that there was only one thing to do; stop reading it as soon as you reasonably know it was not intended for your eyes and immediately return the document(s) to the sender. Indeed, a fair number of attendees thought that such a course of action was the only "correct" thing to do.

Unfortunately, they may be correct morally and "civilly" but legally the answer is not so clear. Courts, state ethics panels and the ABA all have wrestled with this problem.

For example, citing the ABA Committee on Ethics and Professional Responsibility, Formal Op.94-382(1994), noted Legal Ethics Professor John Burman of the University of Wyoming College of Law recently stated in The Wyoming Lawyer (February 2000 at 17): "A lawyer who receives materials from an adverse party which the lawyer knows to be privileged or confidential has important ethical obligations. The lawyer should: 1) refrain from reviewing the material[s] except to the extent necessary to determine their character; 2) notify his or her adversary's lawyer of the receipt of materials; 3) follow the other lawyer's instructions about the disposition of the materials; and 4) not use the materials against the sending party unless authorized to do so by the appropriate court."

Most importantly, Professor Burman went on to say in the very next paragraph, "[T]he committee stopped short of imposing an absolute rule that a lawyer who receives confidential material must immediately return it to the other party. Instead, promptly notifying the other party's lawyer allows each party's reasonable and timely opportunity to resort to judicial remedies to determine legal rights and allow the receiving lawyer, under appropriate circumstances, to use relevant materials in the prosecution or defense of an action on behalf of her client.' Courts faced with such issues have reacted differently."

In Amgen Inc. v. Hoechst Marion Roussel Inc., D.Mass., Civ No. 97-10814-WGY, 1/18/00, privileged material was inadvertently given to the other side and they refused to return it. The Court noted that the other courts have taken three distinctly different approaches to the question of what happens when there has been an inadvertent disclosure of privileged information. The three approaches were delineated as follows: 1) a negligent disclosure can "never waive" the privilege, 2) negligent disclosure "always" results in a waiver; and 3) the so called "middle approach" which makes the facts surrounding the waiver and other circumstances (i.e., a fact intensive approach). The Court there criticized both the first and the second approaches and chose to look at all the facts.

In the Amgen case, a paralegal mistakenly provided to an outside copy vendor both the non-privileged and privileged boxes of material for copying. The Court found that the law firm had taken inadequate precautions to prevent inadvertent disclosure and that, for example, an attorney should have been assigned to review the copy vendor's performance. The Court went on to find that since it was not until the other side notified the negligent producer of the possible inadvertent disclosure, implying that the producer had an obligation to double check its production, the producer's action was "grossly negligent."

Given the number of reported cases and the far-ranging nature of the decisions, it would not be prudent for any attorney to assume that an inadvertent disclosure will be immediately returned. It would also be unrealistic to think that everyone will be as "nice" about it as those attorneys who expressed quiet indignation at any other possible approach during my CLE presentation. Moreover, some of those attorneys who decide not to return the misdirected communication are doing so for very legitimate reasons. Remember that Model Rule 1.3 requires vigorous representation of your client. Indeed, in Op.256 (1995), the District of Columbia Bar Legal Ethics Committee recognized that competing interests of the recipient of a misdirected communication. In that Opinion, the Committee stated that they would immunize an District of Columbia attorney against an ethics complaint filed against him/her by a client regarding the attorney returning a misdirected communication. Very importantly, however, they also noted that they have no ability to immunize the attorney who so returns the misdirected communication against a malpractice claim.

The lesson to be learned is to take the appropriate amount of time to ensure that communications from your office are not misdirected. Make sure your staff has the time and the inclination to double-check communications to make they are not misdirected, and that they ask for clarification when there is any question of the intended addresses. There is no clearly right or wrong answer as to whether you should or should not return the misdirected document. However, that is a better dilemma to face than being in a position of having to explain to your client how the other side obtained possession of their confidential information.