The Continuing Legal Education Society of Nova Scotia. Communicating with Clients regarding Damage Awards

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1 The Continuing Legal Education Society of Nova Scotia Communicating with Clients regarding Damage Awards Donald L. Presse Presse & Mason Suite Hollis Street, Halifax, Nova Scotia, CANADA B3J IV Tel or Fax

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3 COMMUNICATING WITH CLIENTS REGARDING DAMAGE AWARDS Introduction Good communication between lawyer and client is the basis of a proper lawyer client relationship. The client is entitled to a clear and honest opinion as to the merits of his claim and the likely results. A lawyer is entitled to clear instructions on how the client wishes to proceed. This is equally true regarding communications with clients with respect to damage awards, be it between plaintiff or defendant and their respective counsel. Nova Scotia Legal Ethics The lawyers duties are codified in Chapter 4 of the Nova Scotia Legal Ethics and Professional Conduct. This chapter entitled Honesty and Candour When Advising Clients sets out the Rule and Guiding Principles as follows: Rule A lawyer has a duty to be both honest and candid when advising a client. Guiding Principles A lawyer has a duty to a client who seeks legal advice to give the client a competent opinion that is (a) open and undisguised, clearly disclosing what the lawyer honestly thinks about the merits and probable results; and

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5 - 2 - (b) based on sufficient knowledge of the relevant facts, an adequate consideration of the applicable law and the lawyer's own experience and expertise. The Commentary set out in 4.1, 4.2, 4.3, 4.4, 4.6 and 4.1 I, 4.12 and 4.13 all have particular application to the lawyer advising his client on personal injury damage awards. These are as follows: Client's understanding of true positions 4.1 Whenever it becomes apparent that the client has misunderstood or misconceived what is really involved in the matter brought to the lawyer, the lawyer has a duty to explain as well as advise, so that the client is informed of the true position and fairly advised about the real issues or questions involved. Basis of opinion 4.2 A lawyer has a duty to clearly indicate the facts, circumstances and assumptions upon which the lawyer's opinion is based. 4.3 Unless the client instructs otherwise, the lawyer has a duty to investigate the matter in sufficient detail to be able to express an opinion rather then merely make conjectural comments with many qualifications.

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7 - 3 - Bold and over-confident assurances 4.4 A lawyer has a duty not to make bold or over-confident assurances to a client, especially when the lawyer's engagement may depend upon the way in which the lawyer advises the client. Compromise and settlement 4.6 A lawyer has a duty to (a) advise and encourage the client to compromise or settle a dispute whenever possible on a reasonable basis; and (b) discourage the client from commencing or continuing useless legal proceedings. Advice on non-legal matters 4.11 In addition to opinions on legal questions, the lawyer may be asked for or expected to give advice on non-legal matters such as the business, policy or social implications involved in a question or in the course the client should choose In many instances the lawyer's experience will be such that the lawyer's views on non-legal matters will be of real benefit to the client However, the lawyer who advises on such matters has a duty, where and to the extent necessary, to point out the lawyer's lack of experience or other qualification in the particular field and to clearly distinguish legal advice

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9 - 4 - from such other advice. As our Code of Ethics makes clear, we have a duty to investigate the evidence sufficiently, consider the applicable law and provide our client with an honest opinion ofthe likely outcome. However, we are engaged in negotiations in an adversarial setting and the situation is rife for misinterpretation of what the lawyer believes the claim is worth and what may be a matter of settlement strategy. Good communication skills and a proper paper trail can ensure that the lawyer performs his duty as required by the Code of Conduct and can protect himself from potential negligence claims should the outcome or resolution of the matter not satisfy the client's expectations. Identify Causes of Losses and Claims Against Lawyers The NSB Liability Claims Fund has identified several known causes ofloss in claims directly related to injured clients who have subsequently taken action against their former lawyers. A book entitled Managing Client Expectations and Professional Risk written by Ronwyn North and Peter North for the Australian legal profession was found to be equally applicable to the Nova Scotia experience. What follows is drawn from their hook. ill} Professional Attitudes to Engagement Management (i) Setting up the Engagement The lawyer client relationships that have gone sour usually start wrong from the outset. Many

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11 - 5 - lawyers ask the wrong question when they decide whether or not to take on a client. The question shouldn't be, "Am I qualified to do this type of work?" Most lawyers have no problem telling a potential client that they don't deal with a particular area of law. However, they do have a problem saying "I can't take a client on because I am too busy" or" I don't have the resources" or "I don't want to act for you". The latter reasons are all equally valid and can avoid a problem in the future. If you decide to take on a client, be sure you spend sufficient time to unearth all the relevant facts in order to select the appropriate strategy and codify the engagement by providing written confirmation of the agreement. In the case of contingency fee agreements, there of course should be discussion with the client of the risks of litigation and the cost consequences ifthe suit is lost or an award granted by the court lower than what was offered by the Defendant. At this stage, the lawyer must be wary of making bold or over confident assurances with respect to the potential damage award the client might expect to receive given, at this early stage, it is unlikely there are sufficient facts to base an opinion on what the client might expect to receive as a damage award. Where the lawyer decides to take on a potential client even knowing he may likely cause problems in the future, be sure to run that file "defensively". Your opinions and

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13 - 6 - recommendations should be in writing as well as confirmation of the instructions you have received on how to proceed. (i0 Managing Client Expectations This is the single most important cause for professional negligent claims. It can appear at the beginning ofthe relationship, as it progresses or after the file has closed. This arises because there is not a shared understanding of what the lawyer and the legal system can do for the client. There is a requirement that the lawyer take the time and effort to develop a clear understanding of the client's expectations. If these are unreal, the lawyer must take action to move them towards more realistic objectives and outcomes. (iii) Varying the Terms o/the Engagement Matters do not always proceed as expected. It is important that the lawyer manage the transition effectively by advising his client of the impact of the change. For instance, if a mediation or settlement conference fails to resolve a matter, it is important that the lawyer once again advise the client of the possible outcomes at trial nd the cost consequences that may follow those different outcomes. The lawyer's opinion and recommendation should be put in writing and instructions once again confirmed in writing.

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15 - 7 - (iv) Writing to the Client Lawyers who are involved in professional negligence claims tend to be those who avoid writing to the client either to confirm or manage the initial terms of an engagement or to provide further information or advice in writing. Given that Courts are reluctant to accept a lawyer's recollection of his advice or instructions over that of the client's recollection where nothing was reduced to writing, the lawyer fails to do so at his own peril. (v) Closing the Engagement The lawyer should clarify in writing both when the solicitor client relationship has ended or when a particular issue has been finalized. For instance, if a client is stating that a certain problem he has experienced is accident related. Don't leave it open for the client to advise you of the name of the doctor that will provide an opinion that the problem is accident related. Advise the client in writing that the problem will not be put in the claim as there is no medical evidence to document that it is accident related. That way there is clarity and it protects the lawyer from a potential complaint in the future that the problem was not dealt with in the settlement. flu Failures in Managing the Legal Issues (i) Accepting a Transferred Matter These matters are potential minefields. The client has already left one lawyer and it is dangerous for the receiving lawyer to take the legal issues and facts at face value or assume that the matter

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17 - 8 - as presented deals with all relevant issues and facts. It is incumbent upon the receiving lawyer to make adequate inquiry to ensure he has a full appreciation of the matter before taking on or providing advice to the client. (iij Giving Non Legal Advice This is governed by the commentary in Chapter 4. It is inevitable that lawyers will become or be asked to become involved indirectly in the business and personal affairs of their clients in the course of providing legal advice. Essentially, the lawyer must be careful when they step outside the legal role and attempt to help the client identify and weigh the impact oflegal advice on the options and risks, and taking the extra step on non-legal issues of expressing an opinion about what is best for the client on these issues. For instance, whether or not a client should accept a low offer based on the client's personal circumstances is something the lawyer should leave to the client to decide. Whether a client needs financial advice on what to do with the settlement funds, the lawyer should refer him to an appropriate financial advisor, making it clear that he is not an expert in this field. Failures in Listening. Asking and Explaining This simply involves a lawyers basic interpersonal skills with their client. Because of pressure of legal practice and impatience, lawyers can fail to take or devote sufficient time to ensure they understand their client's concerns, listen to these concerns and explain their advice and

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19 - 9 - recommendations. This is especially important when discussing with a client whether or not to accept a settlement offer for a personal injury claim. The client will often be living with this injury for the remainder of their life and will hear anecdotal stories from mends and relatives of what they received or mends of theirs received for less serious injuries. It is important that the client's concerns have been voiced and full explanations given before the client makes the decision whether or not to accept the offer. Lack of a Useable Trail As noted earlier, the Courts will seldom accept a lawyer's recollection of advice, information or instructions exchanged between lawyer and client that has not been reduced to writing. A lawyer may do everything right and say all the right things but it is possible for a client to mishear or misinterpret or recollect differently the advice and information exchanged after the matter has been concluded. A lack of written material makes it difficult to support the lawyer's position particularly where the client acts against the (undocumented) advice given. Of course, it is impossible to know in all cases when you will require a "useable trail". It is necessary to establish the routine oftaking the time to document the important steps taken in providing advice and recommendations to your client and confirming instructions received with respect to negotiation of their settlement awards.

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21 - 10- Conclusion The role of the lawyer involved in personal injury litigation is to obtain for his client just and fair compensation for the injuries and their effects resulting from the negligence ofthe at-fault party. In doing so, the Code of Conduct requires that we communicate effectively and clearly with our client to ensure they understand the merits of their claim, the risks oflitigation and our recommendation with respect to any settlement offer. We clearly have an obligation to devote the time necessary to eliminate any misunderstandings in an attempt to answer their concerns. Taking the time to provide advice and recommendations in writing and to confirm instructions in writing can only help to reduce and eliminate misunderstandings that can arise during face-toface meetings and/or telephone conversations. In addition, it provides the lawyer with a paper trail supporting the fact that he has provided legal advice openly and honestly in a timely fashion. Complaints that arise during or after the conclusion of settlement negotiations can be professionally embarrassing and emotionally draining for the lawyer involved. This is so even where the lawyer has done nothing wrong. A voiding client misunderstandings and potential claims or complaints before and after the file has been closed is time well spent.

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23 DONALD L. PRESSE Donald Presse graduated from Dalhousie Law School in He articled and practiced with Landry, McGillivray until 1989, he joined the Public Prosecution Service as a Crown Attorney in Halifax, he reentered private practice in 1996 and formed a partnership with Barry Mason in Bedford and has practiced with Presse & Mason Law Office since then. His practice is mostly restricted to personal injury litigation and criminal defence litigation.

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