The Unintended Client and Non-Engagement Letters
by Thomas P. Sukowicz
(County Bar Update, January 2004, Vol. 24, No. 1)

 

The Unintended Client and Non-Engagement Letters

 

Excerpted from an article by Thomas P. Sukowicz, director of Lawyers’ Risk Management Services at Hinshaw & Culbertson. He works out of the firm’s Ft. Lauderdale, Florida, and Chicago, Illinois offices. The firm’s risk management Web site is located at www.lawyeringlaw.com.

 

Every year malpractice claims are made against lawyers by individuals that the lawyers never considered to be their clients. This occurs when the existence or non-existence of an attorney-client relationship is not explicitly communicated by the lawyer.

 

Generally, courts will recognize an attorney-client relationship when the attorney’s conduct would lead a reasonable person to believe that he or she was being represented by the attorney. The evidence focuses on the conduct and communications of the attorney and putative client.

 

Claims by persons considered by the lawyers to be non-clients usually arise in one of three ways. The first is when a lawyer declines to represent a person in a matter, and it is not clear to the prospective client that the lawyer is declining to represent that person. This could happen with a new matter for a current client as well as for a prospective client.

 

Although a lawyer has the right to decline to represent a client/prospective client in a matter, the lawyer has an obligation to inform the client/prospective client of this decision.

 

Similarly, if a lawyer agrees to review a matter for a prospective or existing client and accepts the client’s papers for review, unless the lawyer specifically informs the client that he or she is not accepting the case, the client may claim reliance on the lawyer’s silence to mean that the lawyer was taking the case.

 

A like situation could occur in a transaction. Prospective or existing clients might want a lawyer to review a residential real estate contract that is subject to review by the parties’ attorneys within a certain number of days after acceptance. If clients deliver or fax the contract to the lawyer without a clear understanding whether the lawyer is accepting the representation, the clients may reasonably believe the lawyer is protecting their interests, and the lawyer may be liable for failing to do so.

 

A non-engagement letter under these circumstances would prevent any misunderstanding about the absence of an attorney-client relationship. It might include the following language:

We have received [your communication][the documents you delivered] regarding [subject matter]. While we appreciate the confidence you have expressed in our firm, for various reasons we are unable to represent you in this matter. We are returning under cover of this letter the materials you provided for our review.

When declining to accept a legal matter, lawyers should be careful in what they communicate to the client. Even if there is no question that the lawyer is not taking the case, the lawyer may still be liable to the prospective client for any legal advice or opinion rendered to the prospective client.

 

Because courts have found a duty to inform the client of the requirement of filing within the statutory period, a non-engagement letter should address that issue, without necessarily giving an opinion about when the time within which to file will expire. The non-engagement letter should include language similar to the following:

Please note that the law limits the time within which individuals may file lawsuits. Allowing too much time to pass may forever bar you from asserting your claim. We are not providing our opinion as to the date by which you must file any lawsuit against [adverse party]. We encourage you, however, to immediately contact another attorney if you wish to pursue your claim.

The non-engagement letter should also include a disclaimer of any legal advice. For example, the letter might include:

In declining to take your case, we are not expressing an opinion about the merits of your position. We encourage you to consult with another attorney regarding your case if you so choose. Our decision not to accept this representation should not be interpreted as an adverse opinion about the merits of your case.

The second way in which these kinds of claims arise is when a lawyer is involved in a transaction involving multiple parties, some of whom are not represented by attorneys, and it is not clear to all involved which parties the lawyer does not represent.

 

When dealing with unrepresented parties, especially when they are related to the client or are partners of the client, it is crucial to have a writing that clarifies who the lawyer represents and who the lawyer does not represent. A letter to the unrepresented parties may contain language similar to the following:

I enjoyed [meeting you] [talking with you] yesterday regarding [legal matter]. As I mentioned, I am only representing [client] in this matter. I am not representing you and cannot advise you regarding your interests in this matter. You should consider consulting with a lawyer of your choice.

The third way in which claims by persons considered by the lawyers to be non-clients usually arise is when a lawyer terminates the representation, and it is not clear to the client that the lawyer’s representation has ended. Generally, an attorney’s liability for malpractice terminates when the relationship ends. In most cases, this occurs when the lawyer completes the client’s objective. Some-times, however, even though the lawyer considers the professional relationship to have ended, it is not clear to the client that the relationship is over.

 

In terms of malpractice avoidance, a “disengagement” letter to the client not only will serve to document the discharge of the lawyer’s duty in the event of a dispute, but it should also signal to the client, in concrete terms, that the attorney-client relationship has ended. Consider sending a disengagement letter at the conclusion of each matter you undertake for a client. The letter might include language similar to the following:

We are pleased to have represented you for the past [time period] in [legal matter]. This will confirm that our engagement to represent you in this matter has concluded. We will take no further action regarding this matter. We are returning to you under cover of this letter [documents] related to your case.

The absence of non-engagement and disengagement letters has contributed to the filing of legal malpractice claims by persons to whom lawyers believed they owed no duty. Sending such letters may prevent the initiation of malpractice claims or even defeat claims by such persons. The time it takes to write these letters may be the most important time you spend on the matter.

 

 

This article is intended to inform the reader of potential liability exposures for attorneys. This article reflects general principles only and does not render legal advice. Readers should consult legal, financial, insurance, and other advisors if they have specific concerns. Neither the Los Angeles County Bar Association nor Aon and its affiliates assumes any responsibility for how the information in this article is applied in practice or for the accuracy and completeness of the information. Reproduction without written permission is prohibited. This article is made available to the County Bar Update by Aon Direct Insurance Administrators and the Aon Attorneys’ Advantage Program, part of the LACBA Sponsored Aon Insurance Solutions Program. Aon Direct Insurance Administrators has been the sponsored broker for LACBA’s professional liability program for over 17 years. For information or to contact a representative, visit www.aonsolutions.com.

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