Can a client give a lawyer blanket, up-front authority to accept any settlement without checking back?

Plain-English summary

A client wants to hire a lawyer to pursue a lawsuit but travels often and has a demanding job, so the client is concerned about having time to communicate about decisions, including settlement. Trusting the lawyer's judgment, the client and lawyer agree that the client will delegate all authority over settlement decisions to the lawyer, with no parameters on the terms the lawyer may accept, and the lawyer will contact the client only when the case is finally settled. The opinion asks whether the client may delegate all settlement authority to the lawyer, and answers no.

The opinion applies Oregon RPC 1.2(a), which requires a lawyer to abide by a client's decision whether to settle, and Oregon RPC 1.4, which requires keeping the client reasonably informed and explaining matters so the client can make informed decisions. It concludes a lawyer may not obtain an advance blanket authorization over all settlement decisions: the decision to settle must be the client's, not the lawyer's, and a blanket delegation would violate both Oregon RPC 1.2(a) and Oregon RPC 1.4, which obligates the lawyer to inform the client of any settlement offer so the client can decide whether to accept. The opinion notes the lawyer cannot fix this by having the client waive the right, because, unlike the conflict rules in Oregon RPC 1.7, Oregon RPC 1.2(a) has no consent-to-waiver mechanism, and a client could not give informed consent to a blanket delegation at the outset when the facts and settlement terms are not yet developed.

The opinion emphasizes that it addresses only a blanket delegation, meaning the client has placed no restrictions whatsoever on the terms the lawyer may accept. It concludes the same ethical problems are not necessarily present when the lawyer and client discuss settlement beforehand and the client gives the lawyer authority to settle within pre-agreed parameters, even broad parameters conferring significant discretion, as long as the client places some outer limit on the lawyer's discretion and has enough information at the time to make an informed decision under Oregon RPC 1.4. Whether the client can make that informed decision depends on factors such as the range of authority, the case's complexity and procedural posture, the level of investigation or discovery, the client's sophistication, the monetary value of the claims, and the claim's importance to the client.

In practice

This opinion (issued 2019) interprets the current Oregon Rules of Professional Conduct, but it is more than five years old, so readers should verify the current rule text before relying on specifics. The opinion holds that the settlement decision belongs to the client and cannot be handed over wholesale, and that Oregon RPC 1.2(a) offers no waiver mechanism for that right. Per the opinion, the line is between a prohibited blanket delegation and a permissible grant of authority to settle within client-set parameters that have an outer limit and rest on adequate information. The opinion holds that whether a client can give such advance authorization depends on the range of authority and the client's information and sophistication at the time.

Common questions

Q: Can a client just let the lawyer accept any settlement without checking back?

A: No. The opinion concludes a client cannot delegate all settlement authority to the lawyer, because Oregon RPC 1.2(a) reserves the settlement decision to the client and Oregon RPC 1.4 requires informing the client of offers.

Q: Can the client waive the right to decide on settlement?

A: No. The opinion concludes that, unlike the conflict rules, Oregon RPC 1.2(a) has no waiver mechanism, and a client could not give informed consent to a blanket delegation before the facts and terms are developed.

Q: Can a client give the lawyer any advance settlement authority at all?

A: Yes, within limits. The opinion concludes a client may authorize the lawyer to settle within pre-agreed parameters, even broad ones, as long as there is some outer limit and the client has adequate information to decide under Oregon RPC 1.4.

Q: What determines whether the client can give that advance authority?

A: The opinion concludes it depends on factors like the range of authority, the case's complexity and posture, the discovery completed, the client's sophistication, the value of the claims, and the claim's importance to the client.

Background and rules framework

The opinion interprets Oregon RPC 1.2(a) (allocation of authority; the client's decision to settle), Oregon RPC 1.4 (communication), and Oregon RPC 1.0(g) (informed consent), corresponding to Model Rules 1.2 and 1.4. It distinguishes a prohibited blanket delegation from a permissible grant of settlement authority within client-defined parameters.

Citations and references

Rules of Professional Conduct:

• Oregon RPC 1.2(a) / Model Rule 1.2 (allocation of authority; the client's decision to settle)
• Oregon RPC 1.4 / Model Rule 1.4 (communication)
• Oregon RPC 1.0(g) / Model Rule 1.0 (informed consent)

Cases:

• In re Bailey, 25 DB Rptr 19 (2011), sanction for settling without consulting the client

Other opinions cited:

• OSB Formal Ethics Op. No. 2005-54 (settlement and fee arrangements); OSB Formal Ethics Op. No. 2005-33 (settling in the client's absence); Arizona State Bar Ethics Op. No. 06-07

See also

• OSB Ethics Op. 2005-54: Switching From a Contingent to an Hourly Fee After a Rejected Settlement
• OSB Ethics Op. 2005-33: Withdrawal When the Client Cannot Be Found
• OSB Ethics Op. 2011-183: Limiting the Scope of Representation

Source

• Landing page: https://www.osbar.org/ethics/toc.html
• Original PDF: https://www.osbar.org/_docs/ethics/2019-195.pdf