When Malpractice Is An Ethics Issue
By
Martin A. Cole, Acting Director
Minnesota Office of Lawyers Professional Responsibility
Reprinted
from Bench & Bar of Minnesota (December
2002)
Many lawyers in Minnesota believe that the Director’s
Office does not discipline lawyers for malpractice, unless the matter involves
neglect. Is this true? If it’s not entirely true, what are the
malpractice-related issues in which the Director’s Office will get involved?
Some possible explanations
for how the above belief may have come into being: although absolutes are impossible to guarantee, a single mistake
by an attorney, even if actionable as malpractice, is highly
unlikely to result in professional discipline of the attorney. For example, the Director’s Office has for
many years routinely dismissed without investigation complaints in which a
client is unhappy about the quality of the lawyer’s representation-- or, as is
more often the case, the results achieved-- but does not specify any conduct
that would violate a Rule of Professional Conduct. In such situations, the director will not even require the
attorney to respond. At the other
extreme, neglecting a matter for several years such that the applicable statute
of limitations expires certainly may constitute malpractice. It can and will just as certainly be
considered a disciplinary matter involving neglect.
The first rule in the Rules
of Professional Conduct (Rule 1.1) is entitled Competence. The rule requires “the legal knowledge,
skill, thoroughness and preparation reasonably necessary for the
representation.” An argument can be
made that almost all incidents of provable legal malpractice would fail to meet
this standard, and thus should be subject to discipline. As indicated, however, this is just not the
case. One stated reason for this
approach has been to guard the limited resources of the lawyer disciplinary
system, a system paid for through attorney registration fees. In 1985, a Supreme Court advisory committee
specifically identified this as a reason for not investigating complaints that allege only possible malpractice.
It would be inefficient for the Director’s Office to retain experts, as
often would be necessary, to prove up minor competence allegations. Further, since the disciplinary system
cannot provide a financial remedy to the complainants, there would be no
judicial economy, because potential civil litigation would not be avoided.
On occasion, attorneys have
been disciplined for violating Rule 1.1, but it generally requires an egregious situation before the Director’s Office seeks substantial
discipline. For example, one attorney
was suspended in part for his failure to know or determine the most basic fact
of whether a doctor-patient relationship existed between his client and a doctor
before initiating a medical malpractice action.Ftn 1
This was not competent representation.
More likely to result in
discipline is the situation where an attorney exhibits gross incompetence on a
recurring basis such that protection of the public demands action. William Kaszynski was disbarred for such a
pattern of incompetence in his representation of immigration clients, an area of law in which Kaszynski in fact had little or no
knowledge or experience, and in which he made no apparent effort to acquire
competence.Ftn 2 Certainly his conduct also could have been
the subject of malpractice actions, at least for those clients who hadn’t been
deported as a result of his conduct.
The Rules of Professional Conduct intertwine with
malpractice law in several areas beyond just competence and neglect. The scope section to the Minnesota Rules of
Professional Conduct states that “[v]iolation of a Rule should not give rise to
a cause of action nor should it create any presumption that a legal duty has
been breached.” Minnesota courts also
have pronounced that proof of a violation of a professional conduct rule is not
sufficient by itself to establish malpractice.Ftn 3
From these principles, some people have assumed that the disciplinary
rules never can play any role in a civil action. This is not true. Courts
have applied various Rules of Professional Conduct to issues such as the legal
requirements for fee-splitting agreements,Ftn 4 conflict of interest standards for
disqualification purposes, or the standard of care in some breach of fiduciary
duty cases, such as when an attorney drafts a will or trust in which the
attorney is a named beneficiary.Ftn 5
Attorneys subject to a complaint are often concerned
whether the fact that they were or were not disciplined is admissible in a
subsequent malpractice case. The
disciplinary system has no power to control or determine the use of a
disciplinary decision by others. First
of all, any gag rule that attempted to prevent complainants (or the attorney)
from disclosing the result of a complaint likely would be unconstitutional.Ftn 6 Thus, Rule 20, the confidentiality provision
of the Rules of Professional Responsibility, does not prevent either
participant from attempting to make such use of a disciplinary decision; only
the Director’s Office and other members of the disciplinary system are
prevented from disclosing non-public matters.
Ironically, it may be the lawyer who wishes to introduce into evidence
the fact that a complaint against the lawyer was dismissed. In either event, such evidence may well be
excluded in court as irrelevant or prejudicial.
Conversely, does the result in a civil case have an
effect in a subsequent disciplinary prosecution? A malpractice verdict or judgment is not per se proof of a
disciplinary violation. Nevertheless,
the Director’s Office certainly can and does make use of findings from related
civil proceedings. For example,
sanctions imposed on attorneys may be reported to the director by a court for
disciplinary investigation. Due to the
likely differences in burdens of persuasion, the findings will not be
conclusive. In some instances, such as
where a complete contested trial record is available, particularly in cases of
fraud or breach of fiduciary duty, the director may offer substantial portions
of the record and argue that this same evidence also meets the higher clear and
convincing evidence standard that applies in lawyer discipline cases.Ftn 7
There are several other areas
in which discipline is regularly imposed that have malpractice aspects to
them. For example, attorneys have been
publicly disciplined for failing to pay, or make good faith effort to pay, a
law-related judgment. This standard
applies equally to the payment of a malpractice judgment.Ftn 8
May an attorney file bankruptcy to discharge a malpractice judgment
obtained against her? Well, yes, if the
attorney is willing to turn her assets over to a bankruptcy trustee and lose
her ability to obtain credit for several years. If an attorney has adequate assets to pay a valid judgment,
however, and simply refuses to do so, discipline may be imposed.
A malpractice-related
standard contained in the Minnesota Rules of Professional Conduct (MRPC) is
Rule 1.8(h), which states:
A
lawyer shall not make an agreement prospectively limiting the lawyer's
liability to a client for malpractice unless permitted by law and the client is
independently represented in making the agreement, or settle a claim for such
liability with an unrepresented client or former client without first advising
that person in writing that independent representation is appropriate in
connection therewith.
This rule makes almost all prospective agreements a
violation of the disciplinary rule.Ftn 9 Once a malpractice claim has actually been
made (even before a formal action has been commenced), however, a lawyer may
resolve it subject to some restrictions if the claimant is unrepresented.
In another area where malpractice and
professional responsibility overlap, the American Bar Association’s Standing
Committee on Client Protection this year requested the ABA to amend its Model
Rules of Professional Conduct to require attorneys to inform all first-time
clients whether the attorney maintains malpractice insurance. The failure to so inform would constitute a
violation of the attorney’s duty to communicate under Rule 1.4 of the Model
Rules. Currently, a small number of
states, including South Dakota, have rules similar to the proposed Model Rule. Oregon goes further and requires all
attorneys to actually have malpractice insurance. Minnesota has neither requirement to date. Although the notification proposal did not
pass the ABA House of Delegates at the ABA convention this year, it likely will
resurface in the future.
Nevertheless, under the current
Minnesota rules, while an attorney need not affirmatively advise a client
concerning their malpractice insurance, if a client directly inquires of an
attorney whether he maintains malpractice insurance, the lawyer cannot
ethically lie in response. A lawyer was
disciplined where the client agreed to remain with the lawyer after having made
specific inquiry about the lawyer’s insurance in connection with a potential
claim. Although the lawyer truthfully
answered at the time that he maintained malpractice insurance, he then failed
to notify the insurer of the potential claim and allowed the insurance to lapse
without informing the client.Ftn 10
CONCLUSION
In the majority of situations
involving potential malpractice actions, the lawyer disciplinary system will
play little or no role, and may not even have any knowledge of the conduct or
the claim. There is an overlap in some
circumstances, however, where actionable conduct also is a disciplinary
offense. Situations on the extreme end
of the spectrum are easy to determine, but in many cases the distinction may be
quite fine.
NOTES
1 In re Geiger, 621 N.W.2d
16 (Minn. 2001).
2 In re Kaszynski, 620
N.W.2d 708 (Minn. 2001).
3 Carlson v. Fredrikson &
Byron, 475 N.W.2d 882 (Minn. App. 1991).
4 Christensen v. Eggen, 577 N.W.2d 221 (Minn. 1998).
6 See e.g. Doe v. Gonzalez, 723
F.Supp. 690 (S.D. Fla. 1988).
7 See In re Vitko, 519
N.W.2d 206 (Minn. 1994); In re Shinnick, 552 N.W.2d 212 (Minn. 1996).
8 In re Ruffenach, 486
N.W.2d 387 (Minn. 1992); In re Brehmer, 642 N.W.2d 431 (Minn. 2002).
10 In re Richard Meshbesher, 487
N.W.2d 230 (Minn. 1992).