St Denis & Davey logo

Legal Malpractice Issues

Legal malpractice: Failure to advise a client of settlement offers

| Jun 12, 2021 | Damages, Duty of Care, Failure to Communicate, Legal Malpractice Law |

It is common for many lawsuits to settle before reaching the courtroom or even during the trial phase. A settlement agreement between parties in litigation is a negotiated contract to resolve the dispute without proceeding to a verdict. A settlement provides finality to the dispute, lessening stress and the time requirements of the trial process.

A settlement often consists of a party’s offer to settle the case for a set sum of money and sometimes contains other commitments. The issue both parties must face is the unpredictability of judges and juries when they decide cases or determine how much in money damages to award a plaintiff – and what they would give up not to have to face that uncertainty. The outcome of the litigation could potentially put them in a worse position than the settlement would have.

A party’s attorney has a major role in the settlement process – but the client directs the outcome.

Professional duty to tell the client about offers for settlement

A preliminary matter is that the attorney has the duty to communicate the substance of any settlement offer received to the client. The decision of whether to settle is the client’s, not the lawyer’s. While the lawyer will give their opinion about the strength of the case and the likely outcome at trial, the client is the final arbiter.

The client cannot analyze the pros and cons of an offer if they have not seen it. Failure to tell the client of any settlement offer is professionally unethical and would violate the Florida Rule of Professional Conduct. From a legal malpractice perspective, the lawyer’s failure to exercise the duty of ordinary care toward the client must have caused the client to suffer loss.

An exception is that a client can give their lawyer instructions concerning settlement. For example, they could tell the lawyer to reject anything below or accept anything above a certain dollar amount or direct the attorney to reject any settlement offer. The client could even give their lawyer the power to decide based on specific factors, but the bottom line is that the client must give permission not to communicate a settlement offer to them.

Seek legal advice

Any Floridian who believes their lawyer’s failure to tell them about the substance of a settlement offer resulted in financial losses because the client did not have the opportunity to consider the offer and the result at trial was more costly (or less lucrative) than the settlement would have been should consult a legal malpractice lawyer. The new attorney can analyze the details of the previous representation and advise the client of potential legal remedies.