Rule Text and Purpose

The Aggregate Settlement Rule

Rule Text and Purpose

Rule 1.8(g) of the Model Rules of Professional Conduct restricts a lawyer who represents two or more clients and is asked to join one deal that resolves their matters together. In a civil matter that deal is an aggregate settlement of the claims of or against the clients. In a criminal case it is an aggregated agreement as to guilty or nolo contendere pleas (a nolo contendere plea is a plea of no contest). The lawyer may not participate in making such a deal unless each client gives informed consent, in a writing signed by the client. The rule's second sentence fixes the content of the disclosure: it must include the existence and nature of all the claims or pleas involved and the participation of each person in the settlement.¹ A court opinion that reproduces the rule under the caption “Settlement of Claims for Multiple Clients” quotes the same words.²

The rule's trigger is participation in making the deal, and that wording marks what the rule leaves alone. The lawyer may negotiate an aggregate settlement or plea bargain, whether by proposing the package or by responding to the other side's offer. What the rule demands is each client's advance consent before the lawyer takes part in concluding it.³ The rule therefore regulates the conditions and timing of the lawyer's participation. It leaves a useful route open, because an opposing party may want to buy peace with every client at once, and a lawyer who refused to hear any global proposal would close off an outcome the clients might prefer. The rule keeps that route open and makes the clients, not the lawyer, decide whether to take it.

The rule exists first to protect the lawyer's duties to the people being represented. A lawyer who represents several clients owes each of them equal loyalty and balanced, candid advice about a proposal. An aggregate offer strains those duties because it ties the clients together: it is a settlement in which all parties must join or the offer is withdrawn.⁴ Each client's decision then depends on the others' decisions, and the package may favor one client over another. A lawyer who must counsel everyone on the same proposal may find balanced advice hard to give. The criminal version has the same structure. A prosecutor may offer jointly charged defendants a deal in which all enter the same plea and receive a designated sentence, and if any one defendant insists on trial, the prosecutor tries them all.⁵

A second purpose protects each client's authority over the outcome. The rule requires each client's own informed consent, so a majority of willing claimants cannot commit a client who objects, and the lawyer cannot accept on everyone's behalf. The signed writing records that the decision was the client's. The two purposes do different work. The loyalty concern explains why the disclosure must be so complete, since each client needs enough information to judge a package whose terms depend on other people. The autonomy concern explains why consent must come from each client individually rather than from the group.⁶

A mass-accident case shows both purposes at work. A bus crash injures several of a lawyer's clients, and the bus company offers to settle with all of them at once for a lump sum that the lawyer is to divide among them. The offer is not forbidden, but the lawyer must obtain each client's informed consent after the disclosure the rule specifies.⁷

The rule works as a sequence of conditions that must all be met before the lawyer may go forward. The steps below name the questions that later sections of this chapter develop.

Steps one and two decide whether the rule applies. Steps three through five decide whether the lawyer may proceed. A lawyer who has satisfied the last three steps for every client has complied, and a lawyer who has missed any one of them for even a single client has not.

The negotiation was never the problem. The lawyer could have countered, asked for more money, or even proposed the lump-sum structure. The lawyer then needed to take the final terms to each passenger, explain the total, the claims involved, and what each person would receive, and obtain each passenger's signature before the deal became binding. That sequence satisfies the rule, because the requirement attaches to the lawyer's participation in concluding the deal, and the consent must therefore exist before the lawyer commits.

The sections that follow take the rule apart in the order of the checklist. They first define when a settlement or plea counts as aggregate, then turn to the signed-writing requirement and the required disclosures. They next ask whether clients may agree in advance to be bound by a majority vote, a question the rule's demand for each client's consent answers in the negative. They close with the allocation of lump-sum offers, the overlap with the general conflict rule, imputation within a firm, and the consequences of a violation.