Can a Colorado lawyer settle a malpractice claim with their own client, and what protections does the client get?

Plain-English summary

Opinion 85 (adopted May 19, 1990, with addenda in 1995 and 1998) addressed how to reconcile the rule barring a lawyer from limiting liability for the lawyer's own malpractice (then DR 6-102(A)) with the public policy favoring settlement. The Committee concluded that the rule does not bar settling a malpractice claim that has already arisen, provided four conditions protect the client: the lawyer must disclose the facts and circumstances underlying the potential claim and its nature and extent; the lawyer must advise the client, preferably in writing, to retain independent counsel for the settlement; the terms must be fair and reasonable; and the settlement and release can cover only past, not future, conduct.

The Committee concluded that a lawyer may never conceal the facts giving rise to a potential malpractice claim, and may not prospectively require a client to waive or limit malpractice claims in a retainer agreement. It also concluded that a lawyer may include a fee refund or credit as part of resolving a claim, but may not insist on a release as a prerequisite to a refund, to returning the client's property, to completing or continuing the representation, or to the lawyer's withdrawal. A lawyer may not require a client to refrain from filing, or to withdraw, a disciplinary grievance as a condition of settlement.

On timing, the opinion concluded that if the attorney-client relationship still exists and both want the lawyer to continue, the lawyer must carefully consider whether a release can ethically be negotiated without first withdrawing, because continuing the representation increases the risk of undue pressure and may implicate an impermissible release of future claims. The opinion discussed the New York State Bar's Opinion 591 (which required withdrawal) while declining to make withdrawal mandatory in every case, and stressed the value of independent counsel for the client. The 1998 addendum noted that resolving fee and malpractice disputes as part of a grievance mediation under the Colorado rules is permissible.

Currency note

This opinion was issued in 1990, before Colorado's 2008 revisions to the Rules of Professional Conduct. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here. The opinion's 1995 addendum maps the analysis to current Rules 1.8(h), 1.8(a), 1.15(b)-(c), 1.16(a), and 8.4(c).

Common questions

Q: Could a Colorado lawyer settle a malpractice claim with their own client?

A: Yes, with safeguards. The opinion concluded a lawyer may settle a client's malpractice claim only after disclosing the facts and nature of the claim, advising the client (preferably in writing) to retain independent counsel, on fair and reasonable terms, and limited to past conduct.

Q: Could a lawyer have a client waive future malpractice claims in advance?

A: No. The opinion concluded a lawyer may not prospectively exonerate or limit the lawyer's liability for malpractice, whether in a retainer agreement or otherwise; any settlement and release can cover only past conduct.

Q: Could the lawyer hold the client's file or a fee refund hostage for a release?

A: No. The opinion concluded a lawyer may not insist on a release from malpractice liability as a prerequisite to returning the client's property, refunding or crediting fees, completing or continuing the representation, or withdrawing.

Q: Could the lawyer require the client to drop a grievance as part of the settlement?

A: No. The opinion concluded it is improper to require a client to refrain from filing or to withdraw a disciplinary grievance, or to refuse to cooperate with disciplinary proceedings, as a condition of settling a malpractice claim.

Background and rules framework

The opinion interpreted the then-governing Colorado Code of Professional Responsibility, principally DR 6-102(A) (no prospective limitation of malpractice liability), along with DR 1-102(A)(4) (dishonesty), DR 9-102(B)(4) (return of client property), DR 5-104(A) (business transactions with a client), and DR 2-110 (withdrawal). Its 1995 addendum maps these to current Colorado Rules of Professional Conduct, including Rule 1.8(h) (limiting malpractice liability), Rule 1.8(a) (business transactions with a client), Rule 1.15(b)-(c) (delivery and disputed property), Rule 1.16(a) (mandatory withdrawal), and Rule 8.4(c) (dishonesty).

Citations and references

Rules of Professional Conduct:

• Colo. RPC 1.8(h) / Model Rule 1.8 (limiting liability for malpractice; per 1995 addendum)
• Colo. RPC 1.8(a) / Model Rule 1.8 (business transactions with a client)
• Colo. RPC 1.15(b)-(c) / Model Rule 1.15 (delivery and disputed property)
• Colo. RPC 1.16(a) / Model Rule 1.16 (mandatory withdrawal)
• Colo. RPC 8.4(c) / Model Rule 8.4 (dishonesty, fraud, deceit, misrepresentation)
• Colo. Code of Professional Responsibility DR 6-102(A) (governing rule at issuance)

Cases:

• People v. Foster, 716 P.2d 1069 (Colo. 1986), unethical to prospectively limit malpractice liability
• People v. Dwyer, 652 P.2d 1074 (Colo. 1982), release may not be conditioned on withdrawal
• People v. Good, 576 P.2d 1020 (Colo. 1978), return of client property

Other opinions cited:

• CBA Formal Op. 56 (1980): a lawyer may not require a client to withdraw a grievance to settle
• N.Y. State Bar Op. 591 (1988): conditions for settling a malpractice claim with a client

See also

• LACBA Op. 489: Retainer Provisions Limiting Malpractice Liability
• CA Op. 2012-185: Settlement and Suppression of a Bar Complaint
• Maine Op. 100: Threatening a Grievance to Influence a Malpractice Settlement

Source

• Landing page: https://www.cobar.org/ethicsopinions
• Original PDF: https://www.cobar.org/Portals/COBAR/repository/ethicsOpinions/FormalEthicsOpinion_85_2011.pdf