The Growing Duty to Effectuate Settlement
| Publication year | 1991 |
| Pages | 453 |
| Citation | Vol. 20 No. 3 Pg. 453 |
1991, March, Pg. 453. The Growing Duty to Effectuate Settlement
Legal commentators are debating whether the growing acceptance of alternative dispute resolution ("ADR") procedures imposes an ethical obligation on attorneys fully to advise their clients of the availability of various methods of dispute resolution.(fn1) However, the issue of advising clients about the existence of ADR processes does not address attorneys' growing duty to effectuate settlement by the use of ADR processes or otherwise, if possible.
The fact that 95 percent of all lawsuits eventually settle means that more than nine out of ten cases filed in the public courts may not belong there at all. Cases settle when the clients are provided information needed to assess accurately the merits of their case versus the litigation risk. In the litigation process, this information often is not provided until the eve of trial.
Two recent court decisions, along with mandated mediation in Colorado district courts, make it more critical than ever that attorneys evaluate thoroughly their clients' cases, diagnose the full impact of litigation on the clients, communicate clearly with the clients the realities of the litigation risk, then work aggressively to effectuate settlement, if appropriate. This article looks at the potential for malpractice suits in failing in the duty to effectuate settlement; discusses diagnosis of dispute resolution in a given case; and examines the proper administration of ADR methods.
In 1990, the Denver District Court joined a growing number of jurisdictions around the country that have imposed a duty on lawyers to use ADR processes.(fn2) Under the Denver District Court Mediation Program, pursuant to legislation enabling courts in Colorado to refer cases to mediation,(fn3) almost all non-foreclosure civil cases are being ordered to mediation or to some other ADR process agreed to by all parties.
The fact that courts are ordering attorneys to participate in mediation raises an issue concerning attorneys' duty to effectuate settlement in the court-ordered ADR process. The Denver order imposes a "good faith" duty on all participants and requires certification of compliance subject to Rule 11 sanctions. Any one of these ADR proceedings could expose attorneys to liability claims.(fn4)
This potential malpractice concern is illustrated by a medical malpractice case in which this author served as the mediator in another state where mediation is legislatively mandated. When the mediation for the first meeting with the parties was convened, it quickly became apparent that the attorney representing the plaintiff knew nothing about mediation. This experienced and competent litigator was prepared to advocate on behalf of his client, and advocate was exactly what he did. He had advised his client that they would show up and get out as quickly as possible so that they could proceed with the litigation.
The attorney refused to permit his client to speak in the mediation, dominated the joint session with legal arguments and bravado, and refused to listen to the interests of his client and the opposing parties. In a caucus, he indicated that he merely wanted to satisfy the court order and leave. Obviously, the mediation was adjourned shortly after it was convened. The attorney seemingly had complied with the court order and had gotten his client out of the mediation with little expense in legal fees.
However, mediation is by design a conciliatory process.(fn5) In this case, the client had truly desired to settle the case and would have been willing to settle for the amount last offered by the defendants. The failed mediation, as it turned out, had cost her the opportunity to settle. She determined that her attorney's conduct had deprived her of an opportunity to settle and that due to his negligence in not representing her properly in the mediation, she had been damaged. She hired new counsel and threatened a malpractice action. Ultimately, she settled with her former attorney without suit being filed.
The California case of Garris v. Severson(fn6) provides an invaluable insight into the growing judicially imposed duty of attorneys properly to diagnose cases and effectuate settlement, when required by the circumstances, whether the client indicates a desire to settle or not. In Garris, the plaintiff was sued for injuries allegedly resulting from defective work on a project. Garris told his lawyer he was not interested in settlement. The lawyer's initial assessment was that Garris's chances were "better than even." This evaluation became less optimistic on the eve of the trial. At that time, counsel felt that the potential liability could reach $1 million.
The jury returned a verdict of $1.1 million...
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