By hiring a lawyer, you place complete trust in them to represent you in your lawsuit and give you honest consultation through every difficult decision. It is their job to act in your best interest throughout the case, no matter what. By these standards, you should be able to expect complete control over your lawsuit. So what happens if they make a big decision without keeping you informed? Can they accept a settlement offer without your informed consent?
To answer the question directly: No, a lawyer cannot accept a settlement offer without your consent. Every practicing lawyer of any area, whether civil, criminal, or corporate, knows that the client has the final say on whether to settle. Even though the issue is black-and-white, some lawyers continue to betray client trust by accepting settlements without informed consent. At Stalwart Law Group, we believe they should be held accountable for their dishonesty.
If youโre asking this question after your attorney took a settlement without asking you, youโre not alone. The practice of settling cases without client approval (or pressuring a client to accept a settlement offer) is an unfortunate but common issue in the legal community. Not only does it betray the high ethics of the legal profession, but it can very easily lead to a legal malpractice lawsuit.
Settlement is Always the Clientโs Decision
In California and across the United States, the attorney-client relationship is built on trust and communication. While your lawyer can advise you, negotiate for you, and recommend a strategy, they can never make important decisions without your consent.
The California State Barโs Rules of Professional Conduct make it clear that accepting or rejecting a settlement is the clientโs decision. In fact, it is one of the first rules in the entire document, and specifically states that โA lawyer shall abide by a clientโs decision whether to settle a matterโ (Rule 1.2).
Sometimes, lawyers attempt to circumvent this rule by obtaining a blanket power of attorney from their client early in a case. Your lawyer could have hidden these permissions in the original contract you signed when you initiated the attorney-client relationship. By doing this, they might try to claim they had the โauthorityโ to settle your case after doing so without receiving your consent.
However, even in these situations, a legal malpractice lawyer could easily make the case that your original lawyer breached the standard of care. Settlement authority can be limited, revoked, and disputed, and ultimately, lawyers must receive specific authorization to settle. Without it, you can revoke the settlement authority that you previously (and unknowingly) gave them.
How Do You Prove Your Lawyer Committed Legal Malpractice?
Settling a case without your consent can have serious consequences for your lawyer, such as suspension by the California State Bar. It also lays the groundwork for a legal malpractice case against them. By taking a settlement without your approval, your attorney is violating the standard of care of the legal profession and committing a breach of fiduciary duty.
To prove legal malpractice and recover financially from your lawyerโs breach, you would have to show that your lawyerโs unauthorized acceptance of your settlement caused you measurable harm. Determining the extent of the harm is how you and your legal malpractice lawyer would know how to calculate the damages sought in your new lawsuit.
This is where legal malpractice cases become intensely complicated: it’s not enough to prove that your lawyer did it. If you want to file a successful lawsuit against them, you also have to prove that you would have been better off in the alternative scenario. This is a specific challenge that should only be handled by an experienced legal malpractice lawyer and involves proving the four elements of professional negligence, which are:
- Your lawyer owed you a duty of care (the attorney-client relationship existed).
- Your lawyer breached this duty (by taking a settlement without your consent).
- Your lawyer caused you harm as a direct result of this breach.
- Your lawyerโs actions ended in you suffering tangible damages.
You can only prove legal malpractice and recover your damages if you can clearly demonstrate the four elements above. This is the job of a specialized legal malpractice lawyer, and no one should try to sue their attorney without legal support. There are intricacies to proving each of the four elements, such as the โcase within a caseโ doctrine, in which your legal malpractice lawyer must essentially prove two cases at once. Successfully doing so would demonstrate that you could have obtained a higher settlement in your previous case if your lawyer hadnโt taken the settlement offerwithout your approval.
What Can You Recover?
When a lawyer takes a settlement without your consent, the amount of financial compensation you can recover through a lawsuit depends on how the unauthorized settlement affected your rights and finances. Below are the main types of compensation you can potentially recover.
Compensatory Damages
These damages are the primary source of compensation from a legal malpractice case. They are the damages you need to โmake you wholeโ after suffering losses from your premature settlement. Compensatory damages can include the monetary difference between the settlement your lawyer accepted and what you reasonably should have recovered, the loss of claims or defenses that you gave up as a result, and the costs (legal fees) incurred to remedy your damages.
Fee Disgorgement or Forfeiture
Fee disgorgement (sometimes called fee forfeiture) is a recovery category that focuses less on how much money you lost as a client and more on whether or not your original lawyer should be allowed to keep the fees they earned while acting unethically. In breach of fiduciary duty cases, courts can order a lawyer to return some or all of the fees they collected from you, even if your damages are difficult to calculate.
Punitive Damages
Punitive damages are rare in legal malpractice cases, but a judge may add them to your settlement if your lawyerโs actions were especially egregious. The goal of these damages is to punish the lawyer and deter other lawyers from committing the same violation. The offending lawyer (or their malpractice insurance) will pay for these damages themselves. Typically, to recover these damages, you must prove that fraud, malice, or oppression played a role in your lawyer’s decision to accept a settlement without your consent, not just negligence.
Did Your Lawyer Force You into a Settlement?
If your lawyer forced you into a settlement by taking an offer without your consent, it’s best to act quickly. There are strict rules relating to deadlines, evidence, and what you must do to prove your case and win compensation.
The best way to move forward is to team up with a legal malpractice lawyer who has experience handling forced settlement cases. Even if you donโt know whether you qualify for damages or not, a consultation with a qualified lawyer can help you understand:
- Whether or not the settlement is enforceable
- How to challenge your settlement and reopen your case
- If you can sue your lawyer for legal malpractice
- What evidence you need to build a strong case
- How much money you can earn from a legal malpractice claim
If your attorney accepted a settlement without your permission, donโt assume youโre stuck with it. Situations involving breaches of legal ethics can move fast, and the best next step depends on the specifics of your case. To speak with a specialized legal malpractice lawyer and learn the right way to move forward after a forced settlement, contact our office today.
