Nichols v. Keller

In Nichols v. Keller (1993) 15 Cal.App.4th 1672, counsel whose retention agreement was explicitly limited to prosecuting a workers' compensation claim were nonetheless held to have a duty to inform their clients of the availability of filing a third-party action. The appellate court stated that "one of an attorney's basic functions is to advise. Liability can exist because the attorney failed to provide advice. Not only should an attorney furnish advice when requested, but he or she should also volunteer opinions when necessary to further the client's objectives. The attorney need not advise and caution of every possible alternative, but only of those that may result in adverse consequences if not considered." (Id. at pp. 1683-1684.) The court clarified that "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." (Id. at p. 1684.) The attorney has the duty to use such skill, prudence and diligence as other members of the profession commonly possess and exercise in informing the client of other courses of action that warrant consideration and, if prudence dictates that a claim beyond the scope of the retention agreement be pursued, the client can then consider whether to expand the retention or pursue the alternative course of action with different counsel. (see Nichols v. Keller, supra, 15 Cal.App.4th at p. 1685.)