Do Prospective Waivers of Malpractice Actually Work?

As I often like to do, let me share two brief stories. The first involves a criminal defense lawyer. This lawyer represented a client who refused to allow the lawyer to call his girlfriend to testify at trial. There may have been other witness who the lawyer could have called as well. Unfortunately, the client adamantly refused to ever discuss the matter. Here’s the problem. Up until now, this client had always managed to find his way out of trouble; but this time it was going to be different and the lawyer knew it. This time the client was likely to spend a serious amount of time behind bars unless she could find a way to convince her client to work with her.

Making matters worse, this client has always had a complete inability to see his own role in all the bad things that have happened in his life and the lawyer could see it coming. In the end her client was going to point the finger of blame at her for the fallout of the client’s decision to not cooperate and she simply wasn’t okay with that. Given this anticipated outcome, the lawyer drafted a malpractice waiver and had her client sign it. It stated the client acknowledged his refusal to provide the names of witnesses who may have evidence pertinent to his defense and that he waived any and all claims he might have against the lawyer as a result of the failure of such witnesses to be interviewed or presented as witnesses in any proceeding pertaining to his case, including trial.

My second story concerns a lawyer with a client who wanted to file a chapter 7 bankruptcy. This client was given the initial filing packet which included a questionnaire, a detailed fee agreement, and a list of supporting documents that would be needed for the filing. The fee agreement was one of those lengthy drawn out ones full of legalese that included language whereby the lawyer sought to avoid any liability if the client lied or came in too late for the lawyer to do anything.

Here’s the short version of how this bankruptcy matter played. The client turned out to be an extremely difficult man to work with. He failed to provide full and complete income information up front, repeatedly failed to timely provide requested documentation, and failed to notice and correct mistakes and inconsistencies on the schedules he swore were accurate when he initially signed them. Throughout it all, the lawyer did little to try and remedy any of this. Eventually a judgement creditor filed an objection to the chapter 7 discharge, which led to the client retaining new counsel. New counsel made a motion to convert to a chapter 13 bankruptcy in order to prevent a probable dismissal of the bankruptcy. This action resulted in client having to pay on $135,000 of debt he would not have been responsible for under the chapter 7 bankruptcy and, of course, a malpractice claim followed shortly thereafter.

Here’s the connection between these two stories. While each came at it from a different set of circumstances, in the end, both lawyers were trying to use a malpractice waiver in order to prevent a client from successfully suing for malpractice if it was the client who did something stupid in spite of being advised to the contrary. One lawyer drafted a formal waiver specific to a situation at hand and the other placed general waiver language in the engagement document that every new client signed. The interesting question is does a prospective waiver of malpractice work in either setting?

The answer is no because neither client received any independent legal advice prior to signing their respective waivers. While the specific language varies among the States, remember that ABA Model Rule 1.8(h) of the Rules of Professional conduct tells us that a lawyer shall not make an agreement prospectively limiting the lawyer’s liability to a client for malpractice unless the client is independently represented in making the agreement. And note that the rule doesn’t say the client should be advised to seek independent counsel, it states the client is to be represented by independent counsel.

Why have such a rule? Part of the concern is the presence of a prospective waiver is likely to undermine competent and diligent representation. Let’s explore this idea further by using the second story as our context.

A lawyer who does nothing more than simply process information and papers provided by a client violates ABA Model Rule 1.1 Competence, which states “A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.” Therefore, an attempt by a lawyer to have a client acknowledge in an engagement agreement that the client, and not the lawyer, will be responsible for any bad outcomes based upon something like the client’s lack of truthfulness, tardiness in presenting information to the lawyer, or presenting incomplete information to the lawyer would be an attempt to do an end run around this rule. Stated another way, it is unethical for a lawyer to abandon his responsibility to assess the quality of information provided by a client for use in the representation and/or tolerate a client’s unwillingness to timely provide what is needed for effective representation.

Hopefully it is now becoming clear that the malpractice waiver idea falls flat on its face. In no small part because we all know what any independent lawyer who ends up advising a client on the pros and cons of signing a prospective waiver of malpractice is almost assuredly going to say. Given this reality, what options does a lawyer have when a client refuses to accept the advice being given and, for all practical purposes, is preventing you from doing your job? The best option would be to withdraw and move on. Sometimes the reality is you can’t help someone who doesn’t want to be helped. That said, if withdrawing isn’t an option, you must then make sure the client is fully advised of the potential legal consequences of any and all unwise or even foolish decisions being made, or actions being taken. Most importantly, thoroughly document all such advice given, to include the reasons why the advice was necessary.

Finally, and just to be clear, I’m not suggesting that every time a client refuses to follow your advice, you should think about withdrawing. A lawyer can accommodate a client’s decision to pursue a lawful objective which is ill-advised provided the client does so after having been advised of the potential ramifications of the desired course of action. This is so because the objectives of representation rightfully belong to the client. It’s their legal matter after all. So, for example, once fully advised, a client may still choose to accept a settlement for less than you think it’s worth or offer more in settlement than you think is necessary.

Here’s the take-away. Lawyers can’t surrender to their clients control over the means by which their client’s objectives are to be pursued and then try to protect themselves from any legal fallout by way of a prospective waiver of malpractice. That’s simply not allowed.