By any chance is there a "working" SQL statement before the @@ERROR is checked -

@@ERROR resets with every SQL statement...

so if there was an error in an SQL statement and @@ERROR was not checked immediately after this statement did not execute but rather was checked after another "correct" SQL execution then the value will be reset to 0....

I hope that makes sense....!!!

anyway - in the code just inlcude the following :

Declare @Err_Num Int

<UPDATE STATEMENT>

SET @Err_Num = @@ERROR

Print @Err_Num

This will help check if @@ERROR is being populated....