The Advisory: Volume 9, Issue 1, March 2011

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Ethically Speaking

Ethically Speaking: Cap and Fade: The Disappearing Client

By Nancy Carruthers and Ross McLeod, QC, Practice Advisors, Law Society of Alberta

WHAT SHOULD a lawyer do when contact with the client has been lost, in a minor personal injury matter, and limitations are looming? The Practice Advisors are occasionally asked whether a statement of claim should be filed, whether it should be served, whether a settlement offer can be accepted or whether instructions can be given by a third-party.

The purpose of this article is not primarily to discuss risk management in lawyers’ offices concerning how to avoid liability for failing to take steps or stay in touch. Fear of liability or of complaints to the Law Society should not in itself motivate a lawyer to take action without instructions. Best practices demand that a lawyer keep the client fully informed of progress, respond promptly to all client calls and ensure that work is done in a timely manner. Despite diligent efforts by the lawyer, clients do sometimes fail to inform of address changes, phone number changes, marriages and deaths. Some retainer agreements impose an obligation on the client to keep the law office up to date with changes to contact references.

Our objective is to consider the steps a lawyer should take when the client seems to have disappeared despite the lawyer’s efforts to maintain contact. Lawyers are trained and obliged to seek and act upon meaningful instructions from the client. The decision-making process includes reflecting upon whether the lawyer already has express or implied instructions to take steps and what to do if there are none. If a lawyer feels that the loss of contact is the firm’s fault, or that the lawyer may otherwise face some potential liability, then the paranoia principle might govern and a lawyer may pay to file or serve in order to make time to find the client.

The most common scenario is the minor personal injury “Cap” claim, though it is not uncommon in uncomplicated divorce matters. After opening the file, the personal injury lawyer typically undertakes the usual liability and damages inquiries and establishes contact with the opposing adjuster. One way or another, contact with the client is lost and it clearly becomes impossible to get instructions. Still, the limitation date for filing or serving grows nearer and the lawyer’s anxiety escalates proportionately.

When this happens, a lawyer has an ethical duty to make reasonable efforts to locate a client who has lost contact. The extent of those efforts depends on all of the circumstances of the case and the individuals. The client with a complex major injury might have suffered a health reversal and landed in hospital, which would warrant the lawyer employing a locate service or an investigator. For a speculative minor Cap claim, a Canada 411 or Google search might be enough. Follow leads contained in other information in the file, like employment or medical records. Some professional judgment is called for.

Once satisfied that the client truly cannot be found, a lawyer must determine whether the client had given instructions to take further steps. There are lawyers who gratuitously advance the cost of filing a statement of claim in the hope that the client will turn up before the deadline for serving it. The Code of Professional Conduct requires that a lawyer obtain instructions from the client on all matters. It would be somewhat unusual for a client to have said, “File a statement of claim even if you never hear from me”. However, something in the file or the early meetings may suggest that is exactly what the client would have wanted. Maybe the client works overseas or serves in Afghanistan.

On the other hand, there may have been implied instructions to do nothing: “I’m not sure this is going to be worth pursuing!”

If it is concluded that there are no standing express or implied instructions from the client, then the lawyer probably has no authority to file a statement of claim. Similarly, if action was commenced in time, can it reasonably be implied that the lawyer was expected to effect service? There is a sense that lawyers will more readily decide that there is in fact an implied instruction to serve. Probably that is a step for which explicit instructions are not routinely sought. Besides, it may be an inexpensive way to buy more time to find the client. Again, exercise some judgment.

It is always inappropriate to make or accept a settlement offer without instructions. The Code requires that an offer be presented to the client even if it is known to be improbably low or that the client will reject it.

The complete loss of contact with the client severs the retainer agreement. Advise opposing adjusters that you have no instructions, will withdraw from the representation and cease to act. The discomfort that lawyers feel in doing this probably arises from the concern that they possibly could have been more diligent about staying in touch with the client. However, the inability to locate a client and obtain proper instructions does not mean that a lawyer should act without instructions. It’s a good idea to review office procedures and retainer agreements to make sure in future that contact is maintained and that clients understand that communication is a two-way street.

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