Does a Texas lawyer have to tell the client about every settlement offer the opposing party makes?

Plain-English summary

The inquiry asked whether an attorney, in the bargaining process for settlement of a lawsuit, must disclose to the client offers of settlement made by the opposing litigant. The Committee answered that the attorney must disclose all such offers.

The Committee reasoned that DR 6-101 requires competent representation, and that in the offers and counter-offers of realistic settlement bargaining, the lawyer's judgment about when and how much to offer, and about the adequacy of an offer, is itself a measure of competence. The client is entitled to that full measure of competence and to the benefit of the attorney's analysis and recommendation on every settlement offer; once the attorney has made full disclosure and a recommendation, the burden of decision shifts to the client.

The Committee relied on EC 7-7, which provides that it is for the client to decide whether to accept a settlement offer, and EC 7-8, which states that the decision to forego legally obtainable objectives because of non-legal factors is ultimately for the client. It concluded that DR 6-101 and EC 7-7 and EC 7-8 require an attorney to disclose to the client all offers of settlement.

Currency note

This opinion was issued in 1979, under the former Texas Code of Professional Responsibility, which the Texas Disciplinary Rules of Professional Conduct replaced effective January 1, 1990. The Disciplinary Rules have since been amended, and Texas never adopted the ABA's Ethics 2000 framework. The closest current provisions are Texas Rule 1.03 (communication) and Rule 1.02 (scope and objectives, including the client's authority over settlement), with ABA analogs Model Rules 1.4 and 1.2. Subsequent rule changes or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Must a Texas lawyer tell the client about every settlement offer?

A: Per the opinion, yes. The Committee concluded that DR 6-101 and EC 7-7 and EC 7-8 require an attorney to disclose to the client all offers of settlement.

Q: Why did the Committee tie disclosure to competence?

A: Because, in the Committee's reasoning, the lawyer's judgment about offers and counter-offers is itself a measure of competence under DR 6-101, and the client is entitled to that competence and to the lawyer's analysis and recommendation on each offer.

Q: Who decides whether to accept a settlement?

A: The client. The Committee cited EC 7-7 and EC 7-8 for the principle that the decision whether to accept a settlement, or to forego objectives for non-legal reasons, is ultimately for the client.

Background and rules framework

The opinion interprets DR 6-101 (competent representation) together with EC 7-7 and EC 7-8 (the client's authority to decide whether to accept a settlement) of the former Texas Code of Professional Responsibility. The closest current provisions are Texas Rule 1.03 and Rule 1.02, with ABA analogs Model Rules 1.4 and 1.2. The analysis turns on the client's right to decide settlement and the lawyer's duty to give the information and recommendation needed to decide.

Citations and references

Rules of Professional Conduct:

• MR 1.4 (communication with the client); MR 1.2 (scope of representation, including settlement authority), as the modern analogs
• DR 6-101, EC 7-7, EC 7-8 (former Texas Code of Professional Responsibility)

See also

• TX Ethics Op. 412: Erroneous Legal Opinion for an Employee Organization
• TX Ethics Op. 442: Revealing a Client's Fraud Committed Before the Representation
• TX Ethics Op. 411: Retaining Lien on a Client's File for Unpaid Fees

Source

• Landing page: https://www.legalethicstexas.com/resources/opinions/opinion-396/
• Original PDF: https://tcle-web.s3.amazonaws.com/public/documents/Opinion_396.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

QUESTION PRESENTED

Must an attorney, in the bargaining process for settlement of a law suit, disclose to his client offers of settlement made by the opposing litigant?

DISCUSSION

RULE
DR 6-101, EC 7-7

Disciplinary Rule 6-101 requires that a lawyer represent a client competently, and competence is here presumed. However, in the offers and counter-offers that constitute realistic bargaining for settlement, the judgment of the defendant's attorney as to when and how much should be offered, and of the Plaintiff's attorney as to the adequacy of the offer, is itself a measure of competence. The client is entitled to this full measure of competence from his attorney in the bargaining process, and to the benefit of his attorney's analysis and recommendation concerning all offers of settlement. After the full disclosure and recommendation from the attorney, the burden of decision then shifts to the client.

EC 7-7 instructs that "it is for the client to decide whether he will accept a settlement offer," and EC 7-8 states that "the lawyer should always remember that the decision whether to forego legally obtainable objectives or methods because of non-legal factors is ultimately for the client and not himself."

It is the opinion of the Committee that DR 6-101 and EC 7-7 and EC 7-8 require that an attorney disclose to the client all offers of settlement.

CONCLUSION

It is the opinion of the Committee that DR 6-101 and EC 7-7 and EC 7-8 require that an attorney disclose to the client all offers of settlement.

Tex. Comm. On Professional Ethics, Op. 396 (1979)