Falling below the standard of care in providing legal services to a client can of course bring a malpractice claim down on your head — and as we’ve pointed out, the economic climate resulting from the Covid-19 pandemic raises the risk of such claims. Let’s say that you’ve actually made an error. If you acknowledge your negligence, can you quickly settle the claim with your client and move on? A Tennessee Supreme Court opinion issued last week spotlights the ethics rule that imposes requirements and limitations on your ability to smoothly exit a potentially messy situation.
A Tennessee lawyer voluntarily dismissed the personal injury suit he had brought on behalf of his client in her car accident case. Unfortunately, the lawyer failed to refile the case within the statute of limitations, and as a result, his client’s cause of action became time-barred. (Blowing a deadline is the most common cause of a malpractice claim.)
The lawyer met with the client, acknowledged his mistake in writing, and gave her a $500 check with a promise to “make every effort to make [her] whole.”
Later, the client filed a grievance against the lawyer. A few months later, the lawyer agreed with the client to pay her $5,000 in exchange for a full release of her legal malpractice claim against him, and withdrawal of her ethics complaint. The lawyer did not advise the client of the desirability of seeking independent legal counsel before settling her claim against him.
Within three months of the settlement, the disciplinary authorities came knocking. The lawyer was charged with violating his duty of competence and diligence under Tennessee’s versions of Model Rules 1.1 and 1.3. He was also charged with violating the Volunteer State’s version of Model Rule 1.8(h)(2), which bars settling a liability claim or potential liability claim with a client or former client without advising that person — in writing — that it would be desirable for them to get independent legal advice on the advisability of the settlement.
The rule is included as a subsection of the rule on conflicts of interest that mostly arise based on a lawyer’s personal interests, and it’s easy to see why it is positioned there: a lawyer who is in the cross-hairs of a client’s malpractice claim is clearly conflicted when it comes to valuing that claim and arriving at a fair settlement with an otherwise-unrepresented client. The situation clearly calls for the client to get legal advice from someone besides the conflicted lawyer. Failing to so advise his client before settling the potential malpractice claim against him put the Tennessee lawyer on the wrong side of the rule.
The lawyer stipulated to the rule violations, and only disputed the sanction that the disciplinary panel imposed and that the chancery court affirmed: suspension for one year, with only 30 days to be served as an active suspension, and the rest as probation. The state supreme court affirmed as well, calling the penalty “generous,” and noting that it was the least amount of time on active suspension provided for under the state rules.
The court also noted that the lawyer had received seven previous disciplinary sanctions over his 47-year career, four of them involving failing to file matters within the applicable statute of limitations.
If you make an error, the prospect of resolving it quickly with the injured client is very inviting. But if you fail to keep yourself out of a conflict in the process, you can find yourself in a different kind of trouble.