Must a Connecticut lawyer convey a settlement offer containing confidentiality terms, and may the offer bar discussion of the claim's facts?

Plain-English summary

A consumer lawyer regularly received settlement offers requiring clients not to discuss either the settlement terms or the facts giving rise to their claims. The Committee analyzed those two restrictions separately.

A provision limited to settlement terms is not ethically impermissible under the Rules identified in the opinion. Rules 1.2 and 1.4 require the lawyer to communicate the offer so the client can decide whether to settle and can make an informed decision about the confidentiality term.

A restriction on facts operates differently in pending litigation. Rule 3.4(6) prohibits a lawyer from requesting a person other than a client to refrain from voluntarily giving relevant information to another party, subject to stated relative, employee, or agent conditions. The Committee concluded that defense counsel may not require the plaintiff, as a settlement condition, to withhold relevant facts from other plaintiffs or defendants who are parties to the litigation.

Rule 3.4(6) does not apply in the same way to disclosure to nonparties or to a settlement reached before litigation. The Committee expressly declined to decide whether such restrictions are illegal, against public policy, unenforceable, or violations of Rule 8.4(4).

Rule 8.3(a) requires reporting only when the lawyer knows of a Rules violation that raises a substantial question about another lawyer's honesty, trustworthiness, or fitness. Because the facts were limited, the Committee declined to decide whether the described offer triggered that duty.

In practice

Under this opinion, confidentiality of the settlement terms is separated from suppression of relevant claim facts. The latter violates Rule 3.4(6) when counsel in litigation asks the opposing plaintiff to withhold relevant information from other parties to that litigation.

Common questions

Q: Must the lawyer tell the client about an offer containing terms-only confidentiality?

A: Yes. The offer must be communicated so the client can decide whether to settle.

Q: Is confidentiality of settlement terms ethically prohibited?

A: No under this opinion. The Committee found no rule making that limited provision impermissible.

Q: May defense counsel bar the plaintiff from sharing relevant facts with other parties in the lawsuit?

A: No. The Committee says that settlement condition violates Rule 3.4(6).

Q: Does the same rule decide restrictions involving nonparties or pre-litigation settlements?

A: No. The opinion says Rule 3.4(6) is not applicable in those circumstances and does not decide other legal or ethics theories.

Q: Did the Committee require reporting opposing counsel?

A: It provided the Rule 8.3(a) standard but declined to decide the reporting question on the limited facts.

Background and rules framework

Rules 1.2 and 1.4 govern the client's settlement decision and communication of offers. Rule 3.4(6) addresses requests that a nonclient withhold relevant information from another party. Rule 8.3(a) limits mandatory reporting to known violations raising a substantial fitness question.

Citations and references

Connecticut Rules of Professional Conduct:

• Rules 1.2, 1.4, 3.4(6), and 8.3(a)

Other opinions cited:

• South Carolina Bar Ethics Advisory Committee Opinion 93-20 (1993), settlement condition restricting testimony in pending cases

See also

• CT Informal Op. 19-02: Settlement confidentiality under Rule 5.6
• CT Informal Op. 13-10: Settlement non-disparagement clauses
• Maine Ethics Op. 225: Nondisclosure clauses in settlement agreements

Source

• Landing page: Connecticut Bar Association Informal Ethics Opinions
• Original PDF: Informal Opinion 11-01