1. Simple Rule(s) BIG COMPLICATIONS
RULE 1.8(G)
Simple Rule(s)
BIG COMPLICATIONS

2. What Version Do You Have?
OLD DR5-106 Settling Similar Claims of Clients
Consent by “each client” to:
Existence, Nature of All Claims Involved +
Total Amount of the Settlement +
“Participation” of Each Person in the Settlement.

3. WHAT VERSION? Pre – 2002 Rule 1.8(g) “Aggregate Settlement”
Applies to Both Civil or Criminal Cases
“Consent After Disclosure”
Existence and Nature of All the Claims or Pleas +
“Participation” of Each Person in the Settlement.
What’s “Disclosure?” What’s “Participation”
No Comment to help sort all of this out.

4. What Version ? 2002 Rule 1.8(g) Same as previous Rule BUT adds:
“Gives informed consent” in place of “consents after consultation” +
Client consent to be “in signed writing”
Comment [13] notes Rule is “corollary of” provisions in RPC 1.2(a) Client control and Rule 1.7 requirement of knowing client agreement to entry into risky concurrent representation

5. Which Rules Still Leave these Vital Questions
How Broad is the Definition of “Aggregate”?
Just what is the meant by “nature of the claim” of a co-client?
Just how much does counsel have to reveal about “participation” for valid “informed consent” to be given?
Can clients waive receipt of some or most “participation” or “nature of claim” information, specifically names and other identifying information?
Can a Client even Surrender Some Power to Settle?

6. ABA FORMAL OPIN. 06-438 Defines Aggregate Settlement
Applies to Civil or Criminal Matters
“Two or More Clients represented by the same lawyer together resolve their claims or defenses or pleas.”
It’s aggregate even if fewer than all clients with claims against same parties participate in the resolution of the claims of some. Even if claims are in separate cases with the same firm.
“When any two or more clients consent to have their matters resolved together.”

7. ABA FORMAL OPIN
“Disclosure” in CONTEXT OF A SPECIFIC OFFER OR DEMAND of, at a minimum:
Total amount or result of proposed settlement +
Existence + “Nature” of all claims involved in the settlement agreement +
Details of EVERY OTHER CLIENT”S PARTICIPATION in the settlement – receipts, contribution or receipt of anything of value +
Total fees/costs paid to counsel
Best to Obtain Consents at Outset of Representation.

8. ABA FORMAL OPIN. 06-438 Conclusion of the Opinion States
RPC 1.8(g) is a Prophylactic Rule to Protect Clients represented by the same lawyer, firm;
Recognizes that unique and difficult conflicts can arise among clients, lawyers involved;
Compliance provides protection for lawyer + finality and enforceability of the settlement clients approve.

9. Practical Questions Left Undecided
“Majority Vote” settlements? Committee at footnotes 7-9, seems to reject any settlement approval scheme other than EACH CLIENT must give consent.
Is it impossible to have a “settlement” on the courthouse steps?
How broadly can clients agree ahead of time to limit confidential/name disclosures?
How can counsel ethically handle “One Lump Sum” Offers/ Settlements ?

10. The Debate Now -
Do We Treat Clients Invariably as Needing Our / Rules’ Protection Inflexibly?
Paternalistic Approach? – client needs protection.
Sui Juris Approach? – client as adult/ decider/ controller of their own fate.
If somewhere in between, Where Do We Advise Our Attorney Clients to Draw the Line as a Practical Matter?

11. ALI DRAFT PROPOSAL ALI Principles of Aggregate Litigation
Disc. Draft No. 2 (4/6/07)
Defines “aggregate settlement”
Adopts ABA Op re disclosures req’d
Proposes 2 exceptions
Advance waiver + 75% approval after notice
Court approval in compelling circumstances

12. ALI Draft Proposal Sec. 3.16 defines “Agg. Settlement”
Resolution of claims are “interdependent,” i.e.,
Defense acceptance is contingent on acceptance by specified % of claimants; or
Value of each claimant’s claim is not based solely on individual case-by-case facts & negotiations.

13. ALI Draft Proposal Sec. 3.17, Comment on required disclosures
Appears to endorse ABA Op requiring specific disclosures
Does not address whether client identity must be disclosed

14. ALI Draft Proposal Sec. 3.17 exception—advance waivers
Total value of aggregated claims >$5 mil/total # claimants 40 or more
Advance client consent (in writing) after Lawyer communicates adequate information & explanations re material risks & alternatives
Client agrees to be bound by approval of 75% of claimants
If settlement distinguishes among categories, 75% of each category required to approve

15. ALI Draft Proposal Sec. 3.18—limited judicial review
Claimant must challenge w/in 90 days of notice of consummation of settlement
Review limited to
validity of written waiver, including required disclosures
Requirements of 75% vote or 40 person/$5 mil. amount in controversy

16. ALI Draft Proposal Sec. 3.19---court approval
Even when Sec requirements not met
Claimant’s counsel may seek approval for “fairness and adequacy” of Aggregate settlement
Before “court of competent jurisdiction in state where original Atty/Clt. agreement was formed”
Lawyer bears burden of establishing
That efforts to secure direct approval unavailing &
Why 3.17 requirements not met

17. ALI Draft Proposal Rationales for exceptions
Current rule impedes settlements
Unnecessary to protect clients (with 75% approval)
Waivers of important rights are valid in a number of other areas (client autonomy)
Sec court approval---no guidelines/no rationale