Were you the plaintiff or defendant in a civil lawsuit without the outcome you had expected or hoped for? You lost the case, or you had to pay money damages or higher damages than expected. On the other side, maybe you anticipated getting more money or relief than you did.
How would you then feel if you learned that your attorney in that litigation kept a settlement offer from you? Do you think you might have accepted it or made a counteroffer? And beyond the monetary issues, would you have preferred to have avoided testimony about personal or embarrassing matters in the courtroom?
Settlement basics
Many lawsuits settle before trial or even during the proceedings. Settling a case means the opposing parties can agree on terms of an agreement to end the legal dispute, usually by the payment of money from one to the other, but sometimes with other compromises.
Attorneys have a duty to communicate settlement offers to clients
Normally, the lawyers of all parties to a legal dispute conduct settlement negotiations on behalf of and in consultation with their clients. A lawyer’s failure to tell a client about a settlement offer, depriving them of their right to make related decisions, is normally a breach of the attorney’s duty of reasonable care as well as a likely violation of ethical rules. These standards vary slightly between different jurisdictions.
Recent example
A Sept. 2022 Tennessee Court of Appeals decision illustrates a scenario where clients filed a legal malpractice lawsuit against their former lawyers, alleging that previous counsel had failed to communicate settlement offers and rejected offers without consulting the clients. In the underlying class-action litigation, plaintiffs had alleged that several funeral homes improperly “abandoned” the remains of plaintiffs’ loved ones at a cemetery.
In the later malpractice suit, the complaint alleged that the former lawyers failed to “entertain and respond to” approximately $15.5 million in settlement offers. However, the trial judge dismissed the malpractice case for failure to state a claim.
The Appeals Court disagreed with the trial court, holding that the legal malpractice plaintiffs had sufficiently articulated valid claims and sending the case back for trial. Specifically, the court noted that plaintiffs alleged that their original lawyers “failed to carry out fundamental obligations owed to represented clients, namely not communicating the fact that settlement offers had been made.”
This post introduces a complex topic about which a legal malpractice lawyer can answer questions considering your circumstances.