When a lawyer represents several clients with related cases, when does settling them together count as an aggregate settlement requiring each client's written consent under Rule 1.8(g)?
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This page answers the general question as of 2020. Ask about yours and see what the current New York Rules of Professional Conduct say for your facts, with citations.
Plain-English summary
The opinion interprets Rule 1.8(g), which bars a lawyer representing two or more clients from participating in an aggregate settlement of their claims absent court approval, unless each client gives informed consent in a writing signed by the client. The rule does not define "aggregate settlement," and the opinion supplies the boundary.
The opinion concludes that grouping separate but related lawsuits for settlement negotiations, where the settlement terms are interdependent, qualifies as an aggregate settlement that triggers Rule 1.8(g)'s written-consent or court-approval requirement. It also concludes that "participate in making" covers both negotiating and entering into the settlement agreement.
The opinion addresses the in-between case: settling one client's lawsuit alone is not itself an aggregate settlement, even if that settlement is likely to affect the future settlement terms for another of the lawyer's clients. But disclosure and client consent are still required in that situation under Rule 1.4 (clients must be apprised of important developments) and Rule 1.7 (a lawyer may not simultaneously represent clients with differing interests without informed consent).
On the court-approval exception, the opinion concludes that the required approval is express permission for the lawyer to participate in an aggregate settlement without informing or obtaining permission from the clients, and that lawyers should use the exception only where client consent is not feasible, such as class or derivative actions.
In practice
Under this opinion, as the New York rule stood at the time, a lawyer handling several related matters should not settle one case that is dependent on, or carries a significant risk of affecting, the settlement terms of another of the lawyer's cases without written informed consent from each affected client, or court approval for certain aggregate settlements. The opinion treats interdependence of terms as the trigger for the full Rule 1.8(g) procedure and treats mere downstream impact as still requiring Rule 1.4 and 1.7 disclosure and consent.
Common questions
Q: What makes a group settlement an "aggregate settlement"?
A: Interdependent terms. The opinion concludes that grouping separate but related lawsuits for settlement where the terms are interdependent is an aggregate settlement under Rule 1.8(g), requiring each client's written informed consent or court approval.
Q: I'm only settling one client's case, but it will affect another's. Do I need consent?
A: Yes. The opinion concludes that even though settling one case alone is not an aggregate settlement, disclosure and consent are still required under Rule 1.4 and Rule 1.7 where the settlement may affect another client's case.
Q: Does "participate in making" include just negotiating?
A: Yes. The opinion concludes that both negotiating and entering into a settlement agreement fall within "participate in making" under Rule 1.8(g).
Q: When can I rely on the court-approval exception instead of client consent?
A: Rarely. The opinion concludes lawyers should use the Rule 1.8(g) court-approval exception only where client consent is not feasible, such as class or derivative actions.
Background and rules framework
The opinion interprets New York Rules of Professional Conduct that track the ABA Model Rules: Rule 1.8(g) (aggregate settlements; written consent or court approval), Rule 1.4 (communication of important developments), and Rule 1.7 (concurrent conflicts among clients with differing interests). The opinion fills gaps the rule text leaves open, defining "aggregate settlement," "participate in making," and the scope of the court-approval exception.
Citations and references
Rules of Professional Conduct:
- MR / NY RPC 1.8(g) (aggregate settlements)
- MR / NY RPC 1.4 (communication)
- MR / NY RPC 1.7 (concurrent conflicts)
See also
- NYC Bar Ethics Op. 2022-2: Advance settlement authority and the duty to communicate
- NYC Bar Ethics Op. 2006-1: Multiple representations and conflict waivers
Source
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