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October 2nd, 2015
A Storm on the Horizon - When to Communicate with Clients About Destroyed Files
As hurricane Joaquin barrels towards the Northeast, New York lawyers may be reminded of the damage caused by Superstorm Sandy as well as other recent disasters. When a hurricane, warehouse fire, terrorist attack, or other disaster destroys client files, attorneys face the difficult question of how to communicate the loss to clients. Until recently, most ethics guidance on this topic focused on what lawyers can do ahead of time to reduce the risk of loss. Now, a new ethics opinion by the New York City Bar Association's Committee on Professional Ethics ("NYCBA") offers guidance on what lawyers should do after client files are inadvertently destroyed. Here's a helpful summary.
The Duty to Preserve Client Files.
Lawyers have a fiduciary duty to preserve and safeguard property they hold for clients and former clients. Under New York case law, clients have a property interest in - or, at minimum, free access to - most documents or other materials relating to their matters. The duty to preserve client files may continue for at least some period of time after the representation ends, depending on the circumstances. Accordingly, a lawyer may have a duty to notify clients or former clients when their files are destroyed in a disaster.
The Duty to Notify.
Whether an attorney must notify a client about destroyed files depends on various factors, including what types of documents were destroyed, whether the matter is open or closed, and what types of communications the lawyer previously had with the client concerning disposition of the files.
The opinion sets forth a three-tier framework for categorizing client files. Category 1 consists of documents with "intrinsic value or those that directly affect property rights," such as "wills, deeds and negotiable instruments." Category 2 consists of documents that the lawyer "knows or should know may still be necessary or useful to the client." Category 3 consists of documents with relatively little importance that would "'furnish no useful purpose in serving the client's present needs for legal advice.'"
The new opinion concludes that a lawyer should notify a client or former client if Category 1 documents are destroyed in a disaster. Conversely, a lawyer need not notify the client or former client if Category 3 documents are destroyed. Category 2 documents must be analyzed on a case-by-case basis. If the documents relate to an open matter, the opinion concludes that the lawyer must notify the client of their destruction. If the matter is closed, a more nuanced approach is required to determine whether the "client foreseeably may need" the documents. Other factors that may be relevant to a lawyer's decision to notify include:
- The amount of time that has passed since the matter was closed;
- Whether the firm previously gave the client reasonable notice that the files were available to be collected or delivered and whether the client responded to such notice;
- Whether the firm delivered copies of the files to the client at the conclusion of the matter or the client received copies of the files while the matter was ongoing;
- Whether the firm has previously made unsuccessful attempts to contact the client;
- Whether the contents of the file can be reconstructed from other sources.
As the opinion points out, however, "the most prudent option is to notify the client when any Category 2 documents are inadvertently destroyed."
Though the opinion addresses a lawyer's duties after files are already destroyed, it serves as a helpful reminder that lawyers should take steps to ensure they are adequately prepared in the event of a disaster or other disruption to everyday practice.
If you have any questions about contingency and disaster planning for your practice or law firm or about any other professional responsibility issues, please contact Nicole Hyland at (212) 826 5222 or firstname.lastname@example.org; Ronald Minkoff at (212) 705 4837 or email@example.com; Richard M. Maltz at (212) 705 4804 or firstname.lastname@example.org, John Harris at (212) 705 4823 or email@example.com; or Tyler Maulsby at (212) 705 4893 or firstname.lastname@example.org.
Nicole Hyland, a partner in the Frankfurt Kurnit Legal Ethics and Professional Responsibility group, chairs the New York City Bar Association's Committee on Professional Ethics. Tyler Maulsby, an associate in the Legal Ethics and Professional Responsibility Group, serves as Secretary of the Committee.
Other Legal Ethics and Professional Responsibility Alerts
Third Annual Litigation Ethics Summit
On November 13, 2020, Frankfurt Kurnit held its Third Annual Litigation Ethics Summit, consisting of three hour-long panels, earning the attendees three ethics CLE credits in New York and California. Read more.
November 19 2020
A Primer On New York’s COVID-19 Executive Orders and What They Mean for Your Practice
This past week, New York has taken a number of steps to restrict movement in and around the State in an effort to contain the COVID-19 crisis. Governor Andrew Cuomo has issued executive orders and the chief judges of the state and federal courts have issued administrative orders that have had a sweeping impact on the legal industry as well as the business community at large. Read more.
March 22 2020
ABA Opinion Limits Restrictions on Departing Partners
There’s important news for law firm leaders who have recently revised partnership and shareholder agreements to restrict partner departures. In ABA Formal Opinion 489, the ABA Standing Committee on Ethics and Professional Responsibility spells out new limits on notice periods, on rules governing communications with clients, and on so-called “ownership” of clients. Here’s what firm managers need to know to stay on the right side of the ethics rules. Read more.
February 6 2020