Concept
Prospective Versus After-the-Fact Agreements
Prospective agreements limiting malpractice liability
Prospective Versus After-the-Fact Agreements
Paragraph (h) of Rule 1.8 regulates a lawyer's liability agreements at two different moments, and each moment carries its own protection for the client. Before any claim has arisen, a lawyer may not make "an agreement prospectively limiting the lawyer's liability to a client for malpractice" unless the client is independently represented in making it.1 One published version of paragraph (h) also requires that the law permit the limit. Its next sentence turns to the second moment: a lawyer shall not settle a claim for such liability with an unrepresented client or former client "without first advising that person in writing that independent representation is appropriate in connection therewith."2 The Model Rule's paragraph (h)(2) imposes the same restriction on settlements. The lawyer must first inform the unrepresented client or former client in writing of the desirability of obtaining separate legal representation.3
| Prospective limit | Settlement of an existing claim | |
|---|---|---|
| When the agreement is made | Before any claim has arisen | After a claim for the lawyer's liability exists |
| Governing provision | Rule 1.8(h)(1) | Rule 1.8(h)(2) |
| Safeguard for the client | Independent representation in making the agreement | Written advice to an unrepresented client or former client that separate representation is desirable |
Timing separates the two provisions, and the dollar amount does not. A cap at the amount of the fee and a settlement payment of the same amount fix what the client will recover in exactly the same way. What differs is whether a claim for the lawyer's liability existed when the client signed. A prospective limit made in the engagement letter and one made midway through the work are alike in this respect, because no claim has arisen in either case. A settlement, by contrast, answers a particular error, a particular loss, and a particular offer.
The protections differ in the same direction as the timing. Rule 1.8(h)(1) demands actual independent representation, so a lawyer who merely recommends outside counsel has not satisfied it.4 Rule 1.8(h)(2) demands only the written advice, and an unrepresented client who receives it may then settle without a lawyer.5 The difference makes sense when you ask what each client can see. A client holding an existing claim can set the lawyer's offer against what the claim is likely to be worth, and a written statement that independent counsel is appropriate warns that the other side of the table is the person who caused the loss. A client asked to sign a prospective limit has no concrete harm to measure and nothing to compare. A notice would leave the burden of appreciating what is being surrendered on the party least able to carry it, and only a lawyer actually acting for the client can carry it instead.
Exam writers exploit the temptation to let a surface feature choose the rule. A release inside a retainer, signed before any error, is a prospective limit and requires independent representation. A release inside the settlement of an error already made falls under the lighter provision. The mistake can also run the other way: a student cites the written-advice standard to defend a limit signed at intake, borrowing the settlement rule's protection for an agreement it does not cover. Ask first whether a claim for the lawyer's liability existed when the agreement was made.