Can a defense lawyer condition a settlement on the plaintiff's lawyer promising never to sue the defendant again?
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This page answers the general question as of 2005. Ask about yours and see what the current Oregon Rules of Professional Conduct say for your facts, with citations.
Plain-English summary
A plaintiff's lawyer files a case against a defendant. Through defense counsel, the defendant offers to settle the case on the condition that the plaintiff's lawyer agree never to sue the defendant again. The opinion asks whether defense counsel may make that offer or the plaintiff's lawyer may accept it.
The opinion concludes the answer is no. Oregon RPC 5.6(b) provides that a lawyer shall not participate in offering or making an agreement in which a direct or indirect restriction on the lawyer's right to practice is part of the settlement of a client controversy. A promise by the plaintiff's lawyer never to sue the defendant again is exactly such a restriction, so the proposed settlement would violate RPC 5.6(b).
The opinion adds that because the rule reaches both offering and making such an agreement, it would be unethical either to propose or to accept it. It also notes Oregon RPC 8.4(a)(1), under which it is professional misconduct for a lawyer to knowingly assist or induce another to violate the Rules of Professional Conduct.
In practice
The opinion holds that, under Oregon RPC 5.6(b), a settlement term restricting the plaintiff's lawyer's future right to practice (here, a promise not to sue the defendant again) is prohibited, and that the prohibition falls on both sides: the defense lawyer may not offer it and the plaintiff's lawyer may not accept it. Per the opinion, a lawyer who proposes such a term also implicates RPC 8.4(a)(1) by inducing another lawyer to violate the rules.
Common questions
Q: Can a settlement require my client's lawyer to promise not to bring future suits against the defendant?
A: No. The opinion concludes such a promise restricts the lawyer's right to practice and violates Oregon RPC 5.6(b).
Q: Is it only the lawyer who accepts the term who is at fault, or also the one who offers it?
A: Both. The opinion concludes RPC 5.6(b) bars both offering and making the agreement, so proposing and accepting it are each improper.
Q: Does the rule reach indirect restrictions, not just an outright ban on suing?
A: Yes. The opinion applies RPC 5.6(b), which covers a direct or indirect restriction on the lawyer's right to practice as part of settling a client controversy.
Background and rules framework
The opinion interprets Oregon RPC 5.6(b) (restrictions on the right to practice in settlement of a client controversy) and references RPC 8.4(a)(1) (assisting or inducing another to violate the rules), corresponding to Model Rules 5.6 and 8.4(a). The rule's purpose, reflected in the cited authorities, is to keep settlement terms from limiting a lawyer's availability to represent other clients against the same party.
Citations and references
Rules of Professional Conduct:
- Oregon RPC 5.6(b) / Model Rule 5.6 (restrictions on right to practice)
- Oregon RPC 8.4(a)(1) / Model Rule 8.4(a) (assisting or inducing a violation)
Cases:
- In re Brandt, 331 Or 113, 10 P3d 906 (2000) (settlement-related agreement restricting lawyer's right to practice)
- In re Vanagas, 8 DB Rptr 185 (1994) (offering not to pursue future clients' claims as part of settlement)
See also
- OSB Ethics Op. 2005-29: Covenants Not to Compete
- OSB Ethics Op. 2005-44: A Part-Time Nonlawyer Shared by Adverse Firms
Source
- Landing page: https://www.osbar.org/ethics/toc.html
- Original PDF: https://www.osbar.org/_docs/ethics/2005-47.pdf
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