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The Ethical Ramifications of Aggregate Settlements

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The Ethical Ramifications of Aggregate Settlements

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    1. The Ethical Ramifications of Aggregate Settlements Elizabeth A. Alston

    2. Traditional Attorney Client Relationship

    3. Rules 1.7 and 1.8

    4. Rule 1.7 Conflict of Interest: Current Clients

    5. Rule 1.8

    6. Representing More Than One Client

    7. Rule 1.8(g)

    8. Rule 1.8(g) – Breaking Down The Rule When a lawyer represents multiple clients Some or all claims or defenses are to be resolved Under a single proposal in a civil case Or plea agreement in a criminal case Informed consent in writing Lawyer disclosure of clients’ participation

    9. Rule 1.8(g) Definitions An aggregate settlement or aggregated agreement occurs when two or more clients who are represented by the same lawyer together resolve their claims or defenses or pleas. It is not necessary that all clients having claims against the same parties or facing criminal charges participate in the matter’s resolution.

    10. Client Consent Must Be In Writing

    11. Rule 1.8(g) Informed Consent Writing And Timing Requirements Clients’ informed consent to aggregate settlement or aggregated agreement must be in writing. Clients’ informed consent generally cannot be obtained in advance of the offer or demand.

    12. Rule 1.8(g) Lawyer Disclosure Requirements The existence and nature of all of the claims, defenses, or pleas involved in the aggregate settlement or aggregated agreement. The details of every other client’s participation. The total amount of the aggregate settlement or the result of the aggregated agreement. The total fees and costs to be paid to the lawyer. The method by which costs are to be apportioned.

    13. Triggering Rule 1.8(g)

    14. Sample Problems Wrongful death. Three plaintiffs represented by one lawyer. Defense offers to settle with two plaintiffs only. Car wreck. Three plaintiffs represented by one lawyer. 10/20 policy. One hundred plaintiffs represented by attorney against drug manufacturer. Defense offers to settle if ninety-five percent of claimants agree for overall one million dollars cap.

    15. Does Rule 1.8(g) Need To Be Fixed?

    16. American Law Institute Proposed final draft of April 1, 2009 on Principles of the Law of Aggregate Litigation

    17. Non-Class Aggregate Settlement A non-class aggregate settlement is a settlement of the claims of two or more individual claimants in which the resolution of the claims is interdependent.

    18. Interdependent Defined Resolution is interdependent if the defendant’s acceptance of the settlement is contingent upon the acceptance by a number or specified percentage of the claimants or specified dollar amount of claims; or The value of each claimant’s claim is not based solely on individual case-by-case facts and negotiations.

    19. What Circumstances Should Allow For Aggregate Settlements To Be Binding?

    20. ALI Proposes Two Ways Aggregate Settlements Can Be Binding Informed consent in writing which allows each claimant to review the settlements of other affected claimants. Individual claimants may, before receiving a proposed settlement offer, agree to be bound by a substantial majority vote of all claimants concerning an aggregate settlement proposal.

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