After committing malpractice, can a Texas lawyer settle the client's malpractice claim with the client when the client has no independent counsel?
Texas Ethics Opinion 593: Settling a Malpractice Claim With an Unrepresented Client
Short answer: Per the Committee, a lawyer may settle a client's malpractice claim with a client who has no independent counsel, but only after ending the representation in the affected matter, disclosing the malpractice, advising the now-former client in writing that independent representation is appropriate, and avoiding any dishonesty in the settlement.
Disclaimer: This is an advisory ethics opinion. Advisory opinions are not binding; they interpret the Texas Disciplinary Rules of Professional Conduct and are persuasive authority. This summary is for research purposes only and is not legal advice. Verify current rules before acting on any specific guidance.
About this page: The plain-English summary and Q&A below were written by Ezel based on the official opinion. The opinion text is reproduced at the bottom; the official source (linked) controls.
Plain-English summary
The opinion addresses a lawyer who let the statute of limitations run on a client's claim, committing malpractice in the only matter the lawyer handled for that client. The lawyer then offered the client a settlement of the malpractice claim, the client accepted and took payment, and the client had no independent counsel.
The Committee first treats the conflict question. Under Rule 1.06(b)(2), a lawyer may not represent a person where the representation is adversely limited by the lawyer's own interests. Where the malpractice cannot be significantly mitigated through continued representation, the Committee concludes the lawyer-client relationship must end as to the matter in which the malpractice arose; Rule 1.06(c) consent does not save it. So the lawyer must terminate the representation as promptly as reasonably possible and tell the client both that the malpractice occurred and that the relationship has ended, drawing on Rule 2.01 (candid advice), Rule 1.15(d) (steps to protect the client on termination, including notice), and Rule 8.04(a)(3) (no dishonesty, fraud, deceit, or misrepresentation).
Only after that disclosure may the lawyer attempt to settle. Rule 1.08(g) provides that a lawyer shall not settle a malpractice liability claim with an unrepresented client or former client without first advising that person in writing that independent representation is appropriate. The Committee concludes a settlement is permitted if the lawyer (1) discloses the malpractice and the termination, (2) gives the now-former client written advice that independent representation is appropriate, and (3) does not engage in dishonesty, fraud, deceit, or misrepresentation in the negotiation and settlement.
In practice
Under this opinion, and under the Texas rules as they stood at the time, a lawyer who commits malpractice in the only matter handled for a client cannot keep representing the client on that matter, and cannot quietly settle the malpractice claim. The Committee requires the lawyer to end the representation, disclose the malpractice and the termination, give written notice that independent representation is appropriate before settling, and conduct the settlement without dishonesty. The opinion ties the conflict conclusion to Rule 1.06 and the written-notice condition to Rule 1.08(g).
Common questions
Q: I missed a filing deadline for a client. Can I just settle the malpractice claim with them directly?
A: Only after the steps in Opinion 593: end the representation in that matter, disclose the malpractice and the termination, and advise the client in writing that independent representation is appropriate, per Rule 1.08(g).
Q: Can I keep representing the client on the same matter after the malpractice?
A: Not where the malpractice cannot be significantly mitigated by continued representation. The Committee concludes Rule 1.06 requires the relationship to end as to that matter, and consent under Rule 1.06(c) does not cure it.
Q: What written notice does Rule 1.08(g) require?
A: The Committee reads it to require advising the unrepresented client or former client, in writing, that independent representation is appropriate in connection with settling the malpractice claim, before the lawyer attempts to settle.
Background and rules framework
The opinion interprets Texas Disciplinary Rule 1.06 (conflict of interest, including 1.06(b)(2) and 1.06(c)), corresponding to ABA Model Rule 1.7; Rule 1.08(g) (settling a malpractice liability claim with an unrepresented client or former client), corresponding to ABA Model Rule 1.8(h); and Rule 1.15(d) (protecting a client's interests on termination), corresponding to ABA Model Rule 1.16. It also relies on Rule 2.01 (candid advice) and Rule 8.04(a)(3) (dishonesty).
Citations and references
Rules of Professional Conduct:
- MR 1.8 (current-client specific rules, including settling malpractice claims at MR 1.8(h))
- MR 1.7 (conflict of interest: current clients)
- MR 1.16 (declining or terminating representation)
- Texas Disciplinary Rule 1.06(b)(2), 1.06(c)
- Texas Disciplinary Rule 1.08(g)
- Texas Disciplinary Rule 1.15(d), Rule 2.01, Rule 8.04(a)(3)
See also
- TX Ethics Op. 601: Withdrawal of a Discharged Assistant City Attorney
- TX Ethics Op. 590: Restrictions on a Departing Lawyer's Practice and Fees
Source
- Landing page: https://www.legalethicstexas.com/resources/opinions/opinion-593/
- Original PDF: https://tcle-web.s3.amazonaws.com/public/documents/Opinion_593.pdf
Original opinion text
Reproduced from the official source for research purposes. The linked source is authoritative.
QUESTION PRESENTED
Is it permissible under the Texas Disciplinary Rules of Professional Conduct for a lawyer to enter into an agreement with a client, who is not represented by independent counsel, for the settlement of the client's malpractice claim against the lawyer?
STATEMENT OF FACTS
A lawyer failed to timely file a lawsuit on behalf of a client, resulting in the client’s claim being barred by the statute of limitations. This was the only matter in which the lawyer was representing the client. The lawyer, recognizing the malpractice, presented to the client an agreement to settle the malpractice claim. The client entered into the settlement agreement and accepted the lawyer's payment. The client was not represented by independent counsel in the settlement of this matter.
DISCUSSION
The occurrence of malpractice in the fact situation presented, namely the failure to file suit before the statute of limitations ran, raises the question of whether the lawyer-client relationship may continue between the lawyer and the client concerned. Rule 1.06(b)(2) of the Texas Disciplinary Rules of Professional Conduct provides that a lawyer shall not represent a person if the representation of that person reasonably appears to be or becomes adversely limited by the lawyer's own interests. Although Rule 1.06(c) provides that, if the client consents, a lawyer may represent a client in certain circumstances where representation would otherwise be prohibited, the Committee is of the opinion that, in the case of malpractice for which the consequences cannot be significantly mitigated through continued legal representation, under Rule 1.06 the lawyer-client relationship must end as to the matter in which the malpractice arose. It should be noted that, in the factual situation considered in this opinion, the lawyer is not representing the client in any other matters.
In these circumstances, as promptly as reasonably possible the lawyer must terminate the lawyer-client relationship and inform the client that the malpractice has occurred and that the lawyer-client relationship has been terminated. These obligations arise from several Rules. Rule 2.01 provides that in representing a client, a lawyer shall render candid advice. Rule 1.15(d) provides that upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect the client's interests including giving reasonable notice to the client of the termination. Rule 8.04(a)(3) provides that a lawyer shall not engage in conduct involving dishonesty, fraud, deceit or misrepresentation.
Once the lawyer has candidly disclosed both the malpractice and the termination of the lawyer-client relationship to the client, Rule 1.08(g) requires that, if the lawyer wants to attempt to settle the client's malpractice claim, the lawyer must first advise in writing the now former client that independent representation of the client is appropriate with respect to settlement of the malpractice claim: “A lawyer shall not . . . settle a claim for . . . liability [for malpractice] with an unrepresented client or former client without first advising that person in writing that independent representation is appropriate in connection therewith.”
CONCLUSION
Under the Texas Disciplinary Rules of Professional Conduct, a lawyer may settle a malpractice claim with a client not represented by independent counsel if the lawyer: (1) discloses the malpractice and the termination of the lawyer-client relationship to the client, (2) advises the now former client in writing that independent representation is appropriate with respect to the client's consideration of the lawyer's offer to settle the malpractice claim, and (3) does not engage in conduct involving dishonesty, fraud, deceit or misrepresentation in connection with the negotiation and settlement of the malpractice claim.
Tex. Comm. On Professional Ethics, Op. 593 (2010)