PA: Duty to Communicate Settlement Offers to Client
Moores v. Greenberg 834 F.2d 1105, 9 Fed.R.Serv.3d 1314 (1987)
PA: Underlying personal injury
Student Contributor: Ryan O'Donnell
Facts: Longshoreman was injured during the course of his employment and was able to collect compensation benefits through his employer. He then retained an attorney to bring a third party liability claim against the ship owners. The ship owners allegedly made two settlement offers of $70,000 and $90,000, which the attorney did not communicate to the client. The third party liability claim was subsequently lost, and the client brought this malpractice claim against the attorney claiming that he would have accepted the settlement offer had he been informed of it. The attorney was found to be liable for $12,000, and he appealed the verdict claiming that the settlement offers were too meager to be relayed.
Issue: Is a lawyer required to communicate all reasonable settlement offers?
Ruling: Yes. A lawyer has a duty to use a degree of skill, diligence, and judgment necessary to the practice of his profession and which others who are similarly situated ordinarily possess. “As part and parcel of this duty, a lawyer must keep his client seasonably appraised of relevant developments, including opportunities for settlement.” The court implies that an attorney might not have a duty to communicate offers only when they are “so divorced from a realistic appraisal of the merits,” and unresponsive to the upside and downside of the litigation.
Lesson: A lawyer has a duty to keep his client informed of relevant developments, including opportunities for settlement. Lawyers are obliged to promptly communicate to the client settlement offers and all matters that may be relevant to the client’s appreciation and understanding of the matter.
Lawyers should have a duty to tell their clients about every settlement offer. The lawyer is only acting on behalf his client and cannot take advantage of his position by declining offers because HE (the lawyer) think the offer is too low. This ruling is fair to all parties and following this disclosure rule will prevent malpractice allegations.
Lawyers should have a duty to tell their clients about every settlement offer. The lawyer is only acting on behalf his client and cannot take advantage of his position by declining offers because HE (the lawyer) thinks the offer is too low. This ruling is fair to all parties and following this disclosure rule will prevent malpractice allegations.
Given that this case was decided in 1987, I'm not sure if this decision was 'revolutionary' in its day. However, this is hardly a surprising decision now. It's pretty clear that clients control the course of their cases when it comes to deciding to settle or not. And, of course, they cannot settle a case, if the reasonable offers made are not communicated to them by their lawyers.
I agree with this case. Ultimately it is up to a client what settlement to accept. It is their case, they have the major interest in the case. Not the lawyer.
I think the court’s decision makes sense since a lawyer has a duty to communicate to his or her client all relevant developments, which would reasonably include settlement offers. I agree with Ms. Neuman’s comment that this ruling is fair to all parties. Hopefully with such a straightforward decision attorneys will avoid malpractice by communicating to their clients any reasonable settlement offers.
I agree with my classmates. While I do believe that an attorney should communicate each and every settlement offer to their client, I also believe the attorney should have discretion to counsel their client on whether or not they believe the offer is reasonable and give their advice on whether or not to take it.
This case reflects a sound notion in legal ethics regarding prompt communication of settlement offers to clients. As such, it should follow that clients may be found liable for malpractice for breach of this duty. As my peers have stated before me, it is absolutely paramount to communicate settlement offers to client, since they are in their benefit, and allow them to decide for themselves whether to accept. Even if a lawyer feels the client may win more money by litigating, this is in no way a guarantee, and as such, these settlement offers need to be communicated to the client.
I also agree with the holding in this case and the lesson that it teaches. Clients are in control of their cases and major decisions regarding their case. Although an attorney may be able to make tactical decisions without the clients consent, settlement offers are surly the types of decisions that are reserved for the client. I also think the client should have recovered more than $12,000 since the settlement offers were significantly higher.