Oregon State Bar Bulletin NOVEMBER 2012
Lost and Found:
Ethics Implications of the Missing Client, Part I
By Amber Hollister
At the heart of every attorney client relationship is an agent-principal relationship. The client sets the objectives of the representation, and the attorney determines the means and strategy to obtain the desired outcome. RPC 1.2(a).
But what happens when the client simply disappears or stops communicating with the lawyer? When an attorney has lost contact with a client, moving forward as if nothing is amiss can lead to serious problems. But taking no action may prejudice the client. What’s an ethical lawyer to do?
A Reasonably Diligent Search
Your client seems to have vanished into thin air. What should you do?
Although it may be tempting to just move on to other pressing concerns when a client goes incommunicado, a lawyer must make a reasonably diligent effort to stay in contact with clients. After all, lawyers have an affirmative duty to diligently represent their clients, and to keep their clients reasonably informed about the status of matters. RPC 1.3; 1.4(a). Depending on the circumstances, lawyers may consider the following approaches to find a missing client:
Mailing, e-mailing and telephoning a client at all known addresses and telephone numbers.
Utilizing web search services such as Google and social networking sites to locate additional contact information.
Researching public records such as property, tax, voter, marriage and court records and reviewing the client file for alternate contact information.
Visiting (or sending a staff member to visit) the client’s home or place of employment.
Contacting the client’s family members, co-workers, employer or medical providers.
Hiring a private investigator to search for the client, particularly where stakes are high or large sums of money are involved.
During the search, the lawyer should be careful not to disclose confidential information related to the representation of the client. RPC 1.6(a); RPC 1.0(f).
Assuming that you have made a reasonably diligent search for your client but failed, what comes next? The following scenarios outline some of the ethics issues that arise when a client goes missing.
Responding to Settlement Offers
In your first meeting with a prospective client, you agree to seek damages in a wage and hour action. At your client’s direction, you draft a demand letter to his employer and propose settlement. Opposing counsel refuses to meet your demand, but counters for a slightly lesser amount. The offer is only open for 48 hours. You try to contact your client by phone, mail and email, but hear nothing back. You think the offer is reasonable, and that you are unlikely to do better at trial. May you accept the offer?
No, unless your client has previously authorized you to accept a lesser settlement offer. See OSB Formal Op No 2005-26; OSB Formal Op No 2005-33.
RPC 1.2(a) provides that it must always be the client’s decision whether or not to settle a matter. Because the lawyer is the client’s agent, the lawyer cannot act without authority from the client. OSB Formal Op No 2005-33. Even if an attorney believes that a settlement offer is eminently reasonable, she is not allowed to supplant the decision of the client. Instead, the lawyer must diligently attempt to communicate the settlement offer to the client while it is still open. RPC 1.3; 1.4. If the lawyer is unable to communicate with the client, the lawyer must reply that she is without authority to accept the offer. Alternatively, the lawyer could seek additional time within which to respond to the offer.
On the other hand, if the client gave the lawyer authority to settle the case within a certain range at the outset of the representation, or there are other specific circumstances that leave lawyer with a firm conviction that she has the client’s authorization to act, the lawyer may be able accept the offer, even if the lawyer is not immediately able to communicate with the client. See e.g., California Ethics Op 2002-160 (where a retainer agreement gave lawyer the authority to settle claims for two-thirds of the value of the claim, lawyer could accept settlement offers for two-thirds of the value of the claim or more, after making reasonably diligent efforts to locate client). Before accepting the offer, however, the lawyer should be cautious to evaluate whether there has been a “material change in circumstances” since the client’s authorization, and whether or not the lawyer has made sufficient efforts to communicate the status of the matter with the client pursuant to RPC 1.4. See Comment (3) to ABA Model Rule 1.2.
In In re Bailey, 25 DB Rptr 19 (2011), a lawyer was reprimanded for accepting a settlement offer in a wage and hour action without the client’s permission. During the course of the representation, the lawyer attempted to contact the client by telephone and mail about the case but was unsuccessful. After the lawyer rejected an initial settlement offer because he was lacking the client’s authority, the defendant tendered a second counteroffer which included a 100 percent recovery for the client. The lawyer did not copy the client with the second counteroffer, or speak with him about its terms. Even so, the lawyer accepted the offer. Although the offer included a 100 percent recovery for the client, the lawyer was found to have violated RPC 1.2(a) and RPC 1.4.
Filing a Complaint
After you meet a new personal injury client and agree to representation, the client goes missing. You realize that the statute of limitations will run in two weeks, but you are still unable to reach your client. The client previously gave you information about the accident, the parties involved, the damages sustained and the insurance companies’ contact information. You believe the claim has merit. May you file a complaint to preserve the cause of action?
Yes, assuming you have made reasonably diligent efforts to contact the client and you have sufficient information to support the filing of a complaint. RPC 1.4; RPC 3.1
Although there is no case law or ethics opinion on this issue in Oregon, general fiduciary principles and the lawyer’s duty to diligently represent a client suggest that in truly exigent circumstances, a lawyer may act to protect a client’s claims even if the lawyer has not had a chance to obtain the client’s explicit direction. Terminating the representation of the client without filing a claim when the statute of limitations is about to run may cause irreparable damage to a client’s case. RPC 1.16(d). Under such circumstances, a lawyer may have the client’s implied consent to act depending on the lawyer’s prior communications with the client. See Comment (3) to ABA Model Rule 1.2. Of course, this assumes that the lawyer has a nonfrivolous basis for filing a complaint in the first place. RPC 3.1.
Most other states to consider this issue have held that it is appropriate for a lawyer to file a complaint to preserve a missing client’s claims, assuming the lawyer has sufficient information to determine that the claim has merit. See Alaska Ethics Op 2004-3; Maryland Ethics Op 2006-22; Nebraska Ethics Op 08-03; Pennsylvania Ethics Op 93-21; South Dakota Ethics Op 92-6; Virginia Ethics Op 1088; Cf., North Carolina Ethics Opinion 223 (holding that lawyer may not file a complaint on behalf of a missing client to prevent a statute of limitations bar because the lawyer cannot know whether the client intended to proceed with the suit).
Under such circumstances, it may be prudent for the lawyer to simultaneously file a motion to withdraw with the complaint. RPC 1.16. If this is the chosen approach, the lawyer must still make a reasonably diligent effort to notify the missing client of the pending withdrawal, and take all reasonably practicable steps to protect the client’s interests. RPC 1.16(d).
Informing Opposing Counsel
You are in the middle of settlement negotiations with opposing counsel, and your client disappears. Do you have an obligation to reveal the fact that your client is missing?
It depends. Generally speaking, a lawyer does not have any duty to tell opposing client about the whereabouts of a client. But a lawyer may have an obligation to reveal the fact that a client is missing if, by failing to clarify the client’s status, the lawyer would materially mislead opposing counsel about the client’s status or availability. RPC 8.4(a)(3); see In re Boardman, 312 Or 452, 456-57 (1991) (holding that a lawyer’s knowing failure to correct a false impression made by an unintentional misstatement is also a misrepresentation).
Similarly, the lawyer would likely have an obligation to reveal the fact a client is missing if the lawyer believes that opposing party is or may be relying on his previous incorrect assertions or assertions that are no longer true. See In re Williams, 314 Or 530, 536-37 (1992) (lawyer’s deliberate failure to correct a misimpression that he created is a misrepresentation in violation of former DR 1-102(A)(3)). The original misstatement of fact need not be the lawyer’s own to create a problem. As noted by the commentary to the ABA Model Rules, “[a] misrepresentation can occur if the lawyer incorporates or affirms a statement of another person that the lawyer knows is false.” Comment (1) to ABA Model Rule 4.1.
The obligation to correct misinformation, however, does not trump the lawyer’s duty of confidentiality. If the lawyer concludes that the fact that a client is missing is confidential information that must not be disclosed under RPC 1.6, the lawyer will need to seek to withdraw without disclosing the client’s status as missing, even if that will leave opposing counsel with a misunderstanding of the facts. RPC 1.16(a); see e.g. OSB Ethics Op No 2005-34 (an attorney whose client commits what the attorney knows to be perjury must ask the client to correct the perjury and, if the client refuses, seek leave of the court to withdraw without disclosing the client’s perjury).
Failing to inform opposing counsel that a client is missing or unavailable may lead to discipline. In In re McGraw, 12 DB Rptr 110 (1998), a lawyer was reprimanded after one of his clients died during a personal injury and real property dispute, and the lawyer concealed that fact from opposing counsel in settlement negotiations. During settlement negotiations, the lawyer made representations about what his deceased client would say if he were to testify and told opposing counsel that he would speak with his clients about the settlement discussions. The panel found that the lawyer had violated former DR 1-102(A)(3), now codified as RPC 8.3(a), by knowingly misrepresenting material facts to opposing counsel about his client’s death.
As demonstrated by the above scenarios, losing contact with a client can lead to an ethical dilemma. Before moving forward with the representation of a missing client, lawyers should be careful to consider their ethical obligations to their client and to other parties.
Stay tuned for next month’s bar counsel column for a discussion of what to do when a client disappears mid-representation.
ABOUT THE AUTHOR
Amber Hollister is deputy general counsel for the Oregon State Bar. She can be reached at (503) 620-0222, or toll-free in Oregon at (800) 452-8260, ext. 312, or by email at firstname.lastname@example.org.
© 2012 Amber Hollister