One of the triggers of a breakdown in the relationship between a legal practitioner and a client is when the client, justifiably or not, realises that the outcome that they had been promised at the beginning of the relationship by the legal practitioner will not be achieved. The legal practitioner involved in the matter will usually then be blamed for the failure to achieve the desired outcome. This article aims to highlight the risks flowing from heightening a client’s expectation in an unrealistic manner to secure legal work.
The movie Jerry Maguire (1996) has a famous scene where an athlete (the client), in a telephone conversation with his professional advisor (the sports agent), requests that the latter repeat the phrase ‘show me the money’ over and over. The sports agent complies, repeating the phrase louder and with more vigour each time, and the call ends with him retaining the client’s business which was supposedly at risk of going to a competing agent. Have you, similarly, been requested by a potential client to ‘show me the money’ in order for your firm to be appointed or retained rather than another legal practice? I refer here to clients who expect a promise (or even an undertaking) that you will deliver spectacular results, no matter how realistic – or otherwise – those expectations may be. Was the client inducing your firm to ‘outbid’ the competition in respect of the promised result?
In an increasingly competitive legal services market, some legal practitioners fall for the temptation to overpromise the expected results that can be achieved for clients. When such promises are made in the absence of any meaningful information on the underlying legal problem the client is facing, and realistic prospects of an outcome, it borders on egregious conduct. Puffery is common in many industries but, in my view, it has no place in legal practice. Saying that the statements were merely an exaggerated commendation for promotional purposes will not assist a legal practice facing a professional indemnity (PI) claim or called to answer a complaint lodged with the Legal Practice Council (LPC). A disgruntled client may use the exaggerated level of expertise as the basis for the PI claim or the complaint to the LPC.
In Steyn NO v Ronald Bobroff & Partners [2013] 1 All SA 471 (SCA) the appellant alleged ‘that she instructed the respondent on the strength of the fact that it had advertised itself widely, and publicly held itself out to be a firm of specialist personal injury attorneys. The appellant [averred] further that it was an express, alternatively implied, term of the agreements between the parties that the respondent would carry out its mandate with due skill, care, diligence and professionalism expected of a specialist firm of attorneys who held themselves out to be pre-eminent experts and specialists in the field of personal injury claims and third party matters’ (at para 9). The appeal in that matter was dismissed but I think that the quoted passage was an appropriate demonstration of the point.
Pay special attention to paras 7 and 8 of the Code of Conduct for all Legal Practitioners, Candidate Legal Practitioners and Juristic Entities published in terms of s 97(1)(b) of the Legal Practice Act 28 of 2014 (the Code), which respectively relate to publicity and specialisation and expertise. The use of touts is prohibited by the Code (see para 18.22) and touts may have a propensity to make inflated promises, purportedly as agents of your firm, and to also shop a potential instruction around to multiple firms while seeking the best possible financial offer for themselves rather than serving the interests of their supposed client.
Consider the scenario where members of a legal practice are trying to convince a potential client to instruct their firm. At times the practitioners may promise the client that remarkable results will be achieved if their firm is selected. Examples of previous successes in similar matters may be over-emphasised in circumstances where the firm does not have the full details of the matter it seeks to be instructed in and what the real prospects of success are. Offering an enhanced level of service at a reduced fee is not uncommon in such situations. In personal injury matters, for example, this may lead to the client seeing the proverbial dollar signs when enticed with a guarantee of success and a huge damages pay-out at the end of the matter. Some legal practitioners even go so far as promising that the pursuit of the matter will be completed in record time.
Consider what the consequences will be if, despite your best efforts in the matter, the spectacular results you had promised the client as a proverbial carrot to instruct you are not achieved. The client will probably remember the promises (and even the puffery) long after you have forgotten them. Trying to explain the result based on the facts and the applicable law will be too late. The client’s disappointment in the outcome may be the first intimation of a looming PI claim against your legal practice. Even where you have succeeded in obtaining an adequate outcome for the client, the latter may be of the view that the result is insufficient and allegations of under-settlement or some other breach of your mandate may follow. Your views on how ungrateful the client is for the hard work and resources that were put into the matter and that the best possible result was achieved in the circumstances will be of no assistance to your firm.
The assessment of a PI claim against a legal practitioner includes a consideration of whether, but for the alleged breach of mandate or legal duty by the practitioner concerned, the client would have succeeded in their underlying case. It is surprising to note that many of the defendants in the resultant PI claims then contend that the client’s underlying case would not have succeeded in any event. Some go so far as to use expressions such as ‘the case was stillborn’ or ‘had absolutely no prospects of success’ but cannot produce proof that the former client (who is now the plaintiff) was ever informed that the initial case should not be pursued. It is then also difficult for the legal practitioner to explain why, if they believed that the underlying matter had no prospects of success, they nonetheless accepted the mandate and acted on it. The steps taken may have included collating some of the information and documents necessary to pursue the instruction, sending a letter of demand, or even lodging a claim with the Road Accident Fund (if the injuries were sustained in a motor vehicle collision) but then not issuing and serving summons timeously. The result is that the claim prescribes in the practitioner’s hands. Sending a letter of demand or submitting a claim form that includes allegations that you doubt raises several ethical questions.
It is common that the dissatisfied client will not pay the fees due to the legal practice or refund the firm for disbursements. When the firm then institutes action to recover the funds due it is met with a counterclaim by the client for compensation. In other instances, the client brings an action against the firm for a refund of fees paid. Claims for a refund of fees are a trading debt of the firm and are excluded from the Legal Practitioners’ Indemnity Insurance Fund NPC’s (LPIIF) Master Policy (see clause 16 (a)).
Obtain all the necessary information before you give a client any indication of what the prospects of success in a matter are or what the quantum of damages will be. In a personal injury matter, this will include obtaining all the necessary medico-legal reports, updated actuarial calculations, gathering all supporting evidence, and having in-depth consultations with the relevant witnesses. You will then be in an informed position to ‘show the money’ by giving the client a knowledgeable view on the issues in dispute, the prospects of success, the length of time the litigation may take and a well-researched estimate of the lower and upper ranges of expected compensation. A prudent approach is to be conservative in your estimates.
Your reputation and further referrals from the client will be better served by delivering more than you had promised.
There are several risks in any litigation. Very few, if any, cases can be said to be sure winners. If your opponent disputes any part of your client’s case, you and your client have to work to gather the evidence and put up the legal argument, as the case may be, to overcome what has been placed in dispute. When I address legal practitioners on risk management, members of the audience often give me examples of supposedly (in their words) watertight, unsinkable cases that they are dealing with. My response (often mistaken for cynicism, sarcasm, or dry humour) is always a reference to the famous supposedly watertight unsinkable vessel, the Titanic.
Legal practitioners will be well advised to heed the caution espoused in this old proverb.
A lot can happen during a case that will affect its outcome. Clients can become uncooperative, essential witnesses may perform badly on the witness stand or not be available to give evidence, your opponent may raise a legal point that torpedoes your case or have a better prepared case and strategy than yours. These are just examples of circumstances that can jeopardise your achievement of what you presumed and promised the client was an easy win. If your client is faced with a costs order or must pay the amount claimed (if you are acting for the defendant) they may look to you for compensation if you had not explained the risks or given undertakings of a guaranteed favourable result.
I have focussed on litigious matters because most of the claims notified to the LPIIF arise from that area of practice. However, the same caution must be applied to all other areas of practice. There have been claims against practitioners conducting commercial work where the fault is placed on the attorney who, for example, is alleged to have failed in drafting what the client expected to be ‘bullet proof agreement’ where the latter’s interests would have been universally protected and all legal and commercial risks eliminated. Blame is sometimes placed at the door of the attorney for a non-achievement of a financial result that is out of the practitioner’s control. Legal practitioners specialising in criminal law must similarly avoid giving unrealistic undertakings on the expected outcome of proceedings whether it be a bail application, the likelihood of an acquittal at the end of a trial or a lenient sentence if the client is convicted.
Clause 16(j) of the LPIIF policy excludes liability for compensation ‘arising from the [insured legal practice] having given an unqualified undertaking legally binding his or her practice, in matters where the fulfilment of that undertaking is dependent on the act or omission of a third party’. There are many stakeholders who may have significant roles to play in the achievement of the outcome desired by your client in the matter that you are tasked with. Adopt a cautious approach and only give carefully worded written undertakings where necessary and then only if the fulfilment of the undertaking is within your control.
Managing a client’s expectations throughout the execution of the mandate (from inception to finalisation) will go a long way to mitigate this risk. Document all discussions in detailed file notes and follow those up with correspondence confirming the contents of the discussions and what your advice to the client was. These will be essential in your defence of a PI claim or responding to a complaint to the LPC.
It is best to under promise and over-deliver.
Thomas Harban BA LLB (Wits) is the General Manager of the Legal Practitioners’ Indemnity Insurance Fund NPC in Centurion.
This article was first published in De Rebus in 2022 (June) DR 9.
