What to Do When a Disgruntled Client Calls? The First Steps of a Legal Malpractice Case By Rick E. Marsh Attorney Jane Smith received a telephone call from a client, John Brown; she knew that Brown was disgruntled and unhappy with the result obtained in his legal matter. Brown had paid a retainer, but the retainer had been long ago used up, and there was an outstanding bill of approximately $6,000 which remained unpaid for several months. John Brown began the telephone conversation by telling Smith that he was not going to pay the current invoice of $6,000, that he was unhappy with the representation provided by Smith and that he was going to obtain other counsel to investigate the matter and look into whether or not a legal malpractice action should be filed against her. Brown further requested that Smith send him a complete copy of his legal file, and that basically concluded the conversation. This is not a happy moment in a lawyer’s professional life, but it is important to recognize the steps that must be taken at this point in time. The first thing that needs to be done is to make sure that the file of Brown, including all electronic transmissions, is kept intact and preserved. All electronic communications should be printed and placed in the file in a chronological fashion. The second thing that needs to be done is to make a copy of the entire file and provide it to Brown. This should be done at the attorney’s expense. Do not refuse to provide a copy of the file because the client does not agree to pay for one. Make sure the attorney’s copy of the file is in the same order as the former client’s copy. Personally, I have had to submit a Request for Production of Documents to plaintiff’s counsel in multiple legal malpractice cases to get copies of client’s files. Jane Smith might not think that she had a claim made against her as a result of the telephone conversation with Brown, but that probably is inaccurate. The next thing that needs to happen is for Smith to call her malpractice carrier and give notice of this potential claim. Smith is aware of the fact that she is insured by XYZ Insurance Company on a claims-made basis. When a claim is made, it must be reported to the carrier during the same time period or policy period so that there will be coverage. If a claim is made near the very end of a policy period, most policies contain a provision that claims with notice given in a reasonable period of time, even within a different policy period, will be covered. While no lawsuit has yet been filed, the carrier will undoubtedly assign counsel to look into the matter or begin its own investigation with the thought that perhaps a pre-suit investigation and handling can stave off a future lawsuit. One of the things that Smith needs to be cognizant of is the fact that she probably has a deductible and in some cases, her deductible may be high enough to warrant concern about paying any judgment or settlement. Furthermore, she needs to be aware of the fact that while her policy may have limits which comply with the Ohio Supreme Court’s insurance requirements, some insurance companies write legal malpractice coverage so that the expenses incurred reduce 8
Winter 2016 Columbus Bar Lawyers Quarterly
the amount of the coverage, such as an eroding, a burning or a wasting policy. This raises the ethical question of whether or not an eroding policy which has the Ohio Supreme Courtrequired limits of $100,000 actually meets the requirements of the Court. As soon as expense is incurred in defending or investigating the claim, the policy limits available are no longer $100,000. Some companies will not write an eroding $100,000 policy because of this very reason, and whether or not writing it complies with the requirements of the Ohio Supreme Court is questionable. Depending upon the value of the potential claim, the same concerns are present even if the limits are higher. In other words, what is going to be left to pay the claim if the attorney’s policy limit is eroded by the defense costs incurred? If Smith provides Brown with the entire file, then the letter or email transmitting the file should reflect the fact that the client called, was unhappy and requested his file. It should also indicate that Smith retained counsel to investigate a potential malpractice claim. If the attorney-client relationship had not been severed prior to that date, that date needs to be “set in stone” so that there is no question that the attorney-client relationship ended on that date when Brown called Smith. If the attorneyclient relationship had been severed and ended well in advance of that telephone call, the letter transmitting the file should document the fact that the attorney-client relationship ended on a specific date, when Smith advised that there was nothing further that she could do on the matter. For purposes of the one-year statute of limitations for legal malpractice, under the facts in this hypothetical situation, we now know that, as a certainty, the attorney-client relationship no longer existed on the date of the telephone call from the disgruntled client to the attorney. There may or may not be a question of fact as to whether the attorney-client relationship ended prior to that date. Under those circumstances, it would be ill-advised for Smith to bring a collection action for her fee against Brown unless more than one year from the date of the telephone call had passed, including any time that Smith was out of the state of Ohio, which would have tolled the statute of limitations for bringing a potential malpractice claim as a counterclaim. If suit is filed by Smith, even after the statute of limitations has run on a legal malpractice claim, Brown could use the malpractice claim as a set off. The important thing for Smith to recognize is that when she receives that telephone call, a claim is being made which requires her to report it to her insurance carrier and to make sure that the file is complete. Many attorneys, when a claim has been made, go into a state of denial and try to pretend that the claim does not exist. This does not help at all in the resolution of the matter. The attorney needs to participate, to assist counsel in understanding the issues and to get the matter resolved, if possible.