June 11, 2025 – When your client has a limited representation agreement with you for a specific claim, do you have a duty to tell them about other claims they may have in the case?

Question

A prospective client made an appointment to speak with me about possible representation. The client told me that she had been represented by a lawyer in connection with a worker's compensation claim for injuries sustained when she slipped and fell at her place of work. She grew unhappy with her prior lawyer and discharged them.

When reviewing her case, it was clear to me that she also had a possible tort claim in addition to the workers’ compensation claim, but the prior lawyer did not advise her of this possible claim and it now may be time-barred. I looked at the representation agreement of the prior lawyer and it was limited to representation in the workers’ compensation matter.

Did the prior lawyer have a duty to advise the client about the possible tort claim, and is there now a possible malpractice case?

Answer

Some courts have found that a lawyer may have a common-law duty to advise a client of readily apparent and relevant information, even if it falls outside the scope of a limited representation, and to advise the clients to seek independent advice if appropriate.

In Nichols v. Keller,^[1] a California court found that a lawyer representing a client on a worker's compensation matter had a duty to advise the client of a possible third-party claim even if the lawyer did not agree to represent the client with respect to such a claim.

In so holding, the court noted:

However, even when a retention is expressly limited, the attorney may still have a duty to alert the client to legal problems which are reasonably apparent, even though they fall outside the scope of retention. The rationale is that, as between the lay client and the attorney, the latter is more qualified to recognize and analyze the client's legal needs. The attorney need not represent the client on such matters. Nevertheless, the attorney should inform the client of the limitations of the attorney's representation and of the possible need for other counsel.

Thus, while a lawyer need not provide services beyond the agreed upon scope of the representation, the lawyer should alert the client to relevant issues and matters.^[2]

Until recently, no Wisconsin court had addressed this issue. But in Freude v. Berzowski,^[3] a Wisconsin court held that a lawyer had no duty to advise a client of a potential third-party claim when the express terms of the engagement agreement limited the scope of the representation. The lawyer had represented a client in a worker's compensation matter arising from a slip and fall at the client’s place of employment. The lawyer withdrew and the client settled the claim with new counsel. The client thereafter brought a malpractice action alleging that the lawyer was negligent in failing to advise the client of possible third-party claims. The circuit court granted summary judgment to the defendant.

In upholding the circuit court’s grant of summary judgment, the court of appeals relied heavily on the fact that the engagement agreement limited the representation to the worker's compensation claim and excluding other possible claims, stating:

In that agreement, the parties expressly agreed that the firm's representation was limited “solely” to the worker's compensation claim, specifically excluded “representation as to non-worker's compensation claims,” and acknowledged that any such representation would need to be addressed in a separate retainer agreement. In short, because Di Renzo's representation under the Retention Agreement did not extend to claims against third parties, there is no legal relationship upon which to base a duty to provide Freude with advice regarding such claims.

Had the agreement only identified what Di Renzo's representation did encompass, Freude's argument that a duty to advise as to third-party claims arose nonetheless might be stronger, partly because of the close association of claims against employers and third parties in Wis. Stat. § 102.29. But by expressly carving third-party claims out of the scope of Di Renzo's engagement, the Retention Agreement eliminates the basis for a duty to give advice as to such claims.

This emphasizes the importance of clearly stating the scope of representation and when appropriate, noting what is excluded from the scope of services the lawyer is agreeing to provide.

While this case was a malpractice, rather than disciplinary action, the court did note the importance of the guidance provided by the disciplinary rules:

The Retention Agreement's specification as to what Di Renzo's limited representation did not include is also in keeping with Wisconsin ethics guidance:

When undertaking a limited scope representation, it is particularly important for the lawyer to clearly communicate to the client the limits of the representation. In most circumstances, in a limited scope representation it will be necessary for the lawyer to inform the client what services the lawyer will not provide to the client. This is because the representation often is limited in a manner that varies from what a client might typically expect, and this information must be communicated to the client.^[4]

While this opinion provides ethical guidance and does not directly address the standard of care for a legal malpractice claim, it remains noteworthy that the Retention Agreement followed this guidance by clearly communicating to Freude that Di Renzo's representation was limited to the worker's compensation claim and that the firm was not representing him with respect to any third-party claims arising out of his injury. That the agreement went this extra step takes on added significance because, as Freude argues, workplace injuries frequently give rise to both claims against employers under Wis. Stat. chapter 102 and claims against nonemployer third parties who may bear some responsibility for an employee's injury. Here, the agreement notified Freude of the possibility of such third-party claims, informed him that Di Renzo was not representing him with respect to such claims, and instructed him what additional step would be needed to have Di Renzo undertake such representation (footnote omitted).

SCR 20:1.5(b) requires that lawyers inform clients of the scope of representation at or within a reasonable time of the representation, usually in writing. SCR 20:1.2(c) requires that lawyers obtain a client’s informed consent to a limited scope, and SCR 20:1.0(f) states that informed consent requires a discussion of the “material risks” to the client.^[5]

Again, while this was not a disciplinary case and thus the question as to whether disciplinary rules were violated was not before the court, following the requirements of these rules provide a path to avoiding civil liability in a matter such as this.

There was a dissent, which argued that the matter should have been remanded to the trial court for a determination as to whether the lawyer was actually aware of and withheld information about any third-party claims, but noted that there was no duty on the lawyer to investigate any such claims.

Endnotes

[1] Nichols v. Keller, 15 Cal. App. 4th 1672, 19 Cal.Rptr.2d 601 (1993).

[2] See also Greenwich v. Markhoff, 234 A.D.2d. 112, 650 N.Y. S.2d 704 (1996).

[3] Freude v. Berzowski, 2024 WI App 53, 413 Wis. 2d 644.

[4] State Bar of Wisconsin, Wisconsin Ethics Opinion E-09-03: Communications Concerning Attorneys’ Fees and Expenses, at 3 (2020).

[5] The court noted that the client presented an argument that he did not give informed consent to the limited scope agreement, which the client “did not develop.”