The Dreaded Settle and Sue: Alive and Well in New Jersey

It is no secret that parties more often settle than proceed through trial. While courts roundly applaud this as beneficial to both the system and litigants, it sometimes generates second guessing from the clients. As Larry David put it, "a good compromise is when both parties are dissatisfied." It is therefore no surprise that many legal malpractice claims follow from settlements, despite the general principle that the settlement itself precludes such a suit. In a recent decision from the New Jersey Appellate Division, the court's discussion of when this principle applies does little to pacify concerns of attorneys that their clients will settle and sue. Even well documented settlement agreements, and testimony reflecting a voluntary resolution, still can be undone via a malpractice complaint. 
Continue reading...

Spoliation Examined in LPL Context

It is a risk management necessity that professionals document their files appropriately and confirm conversations in writing. A recent NY decision goes further, and suggests that it may be wise to save original documents to reduce the likelihood of a spoliation argument. In that decision, the Appellate Division, Second Department of New York considered whether a former client was entitled to evaluate an original document to determine whether her fingerprints were on a settlement offer.
Continue reading...

Attorneys Admonished for Settlement Posturing

Attorneys have a duty to act as zealous advocates for their clients. This duty is particularly important during settlement negotiations, where counsel’s strategy and negotiation skills play a significant role in achieving a favorable result. However, settlement statements that are intended to deceive one’s adversary can quickly cross the line from permissible posturing to unethical misrepresentations of fact.
Continue reading...

Malpractice Claim Barred due to Mediation Confidentiality

Many litigants want their day in court; however, the vast majority of cases never make it to trial. Facing heavy dockets, courts are increasingly encouraging parties to resolve claims through ADR methods, like mediation. In order to foster successful mediation, several states have enacted mediation confidentiality statutes, which prevent mediation discussions from being admitted into court if the mediation is unsuccessful. While the purpose of these statutes is to encourage parties to speak openly with the mediator, confidentiality may have unforeseen consequences on the attorney-client relationship.
Continue reading...

Settlement Voided due to Facebook Post

Facebook strikes again! Just ask a settling plaintiff who learned that his negotiated settlement payment was deemed void as a result of his daughter’s Facebook post. According to a recent decision out of Miami, an $80,000 payment was presumptively waived as a result of a post from the plaintiff's daughter broadcasting the “victory” due to a confidentiality clause within the settlement agreement. This is just another example of the serious consequences of inadvertent disclosure of confidential information and the risks of social media.
Continue reading...

Stop; Hammer (Clause) Time

Litigation is big business with big dollar signs. As a result of the large awards that can result from malpractice suits, many professionals, their attorneys, and insurers are interested in early settlement discussions. When considering settlement, the defense team must balance “right and wrong,” pride, defense costs, and other complicated factors that are difficult to quantify. For the professional, the decision may be more about reputation and morals than budgets. As a result, insureds may not always want to follow their insurer’s inclination to settle. Enter the “hammer clause.”
Continue reading...

When a Settlement Unhinges: Failure to Document a Mediated Agreement

Mediation is intended to facilitate the expeditious resolution of disputes. Often, mediation offers the ideal setting to promote productive conversation and settlement discussions. Skilled mediators know the right buttons to press, highlight strengths and weaknesses, and allow the parties an opportunity to “be heard,” all of which can go a long way toward settling a dispute. But, mediation does not always go as intended particularly when the terms of a proposed agreement are not documented.
Continue reading...