Duty to advise clients of collateral claims

In Nichols v. Keller (1993) 15 Cal.App.4th 1672, the court held that a workers’ compensation attorney has a duty to advise a client of any potential remedies that he has,including a potential third party action arising out of his workplace accident. A recent L.A. Superior Court verdict (read here) illustrates the potential consequences that can befall an attorney who neglects that duty. In this case, the jury found that a workers’ comp attorney had committed malpractice by failing to advise his client of a potential third party toxic tort claim against the manufacturer of chemicals to which the claimant was exposed in her workplace. The jury found the lawyer-defendant liable for $2,187,600 (the value of the unfiled toxic tort case).

This verdict underscores the importance for all of us of advising clients, not just as to the claims for which we have been hired, but any other potential claims that might arise from the circumstances that caused their injuries. In the workers’ comp context, this often means referring the client to a lawyer who specializes in the type of third party matter that might be involved. Even if no viable third party claim is apparent on the surface, it is hazardous to make that assumption or even to have the client sign off on her willingness not to pursue the third party claim, without getting an outside opinion. If, after obtaining that opinion, a decision is made not to pursue the third party claim, then the client should certainly be asked to sign a document confirming his agreement with that course of action, so that there can be no confusion later on.

This principle of course applies outside the workers’ comp context as well, whenever a lawyer takes on a matter where there are potential claims that go beyond the lawyer’s area of expertise. Because specialties in law are not always as well-defined as in medicine, lawyers (unlike doctors) don’t always think about the importance of bringing in outside “specialists,” but this practice is no less important in the legal arena. Moreover, even if one has the expertise to evaluate (and reject) a potential collateral claim that the client might have, it is important to advise the client of the existence of that potential claim and obtained his written consent before deciding not to pursue it.