Following is the first in a series of posts about recent changes to California’s Rules of Professional Conduct. This one falls under the category of “Lawyer-Client Relationship,” focusing on “aggregate settlements.”
For the first time in nearly 30 years, the California Supreme Court has approved a major overhaul of the state’s rules of ethics. On November 1, 2018, nearly six months after the Court issued the order approving the new rules on May 10, 2018, the California Bar Association’s new set of Rules of Professional Conduct (RPC) took effect.
One revision involves aggregate settlements, impacting any attorney who is representing two or more clients in a given case. The Rule of Professional Conduct, as revised, is as follows:
Rule 1.8.7 Aggregate Settlements
(a) A lawyer who represents two or more clients shall not enter into an aggregate settlement of the claims of or against the clients, or in a criminal case an aggregate agreement as to guilty or nolo contendere pleas, unless each client gives informed written consent. The lawyer’s disclosure shall include the existence and nature of all the claims or pleas involved and of the participation of each person in the settlement.
(b) This rule does not apply to class action settlements subject to court approval.
Client Benefit: Generally speaking, a client can be confident that his or her interests are being protected, knowing that any settlements will require their written consent and sufficient disclosures/ information to make an informed decision.
In the previous RPC, Rule 3-310(D) says a lawyer representing “two or more clients shall not enter into an aggregate settlement of the claims of or against the clients without the informed written consent of each client.” As set forth above, the new rule, RPC No. 1.8.7, adds to this by stating that a lawyer’s disclosure “shall include the existence and nature of all the claims or pleas involved and of the participation of each person in the settlement.” CBA’s new rule closely mirrors the language used in the American Bar Association’s rule on the same topic: Rule 1.8(g).
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