Lawyer Approval of Settlement
Adopted: January 15, 1993
Opinion rules that a lawyer may not include language in an employment agreement that divests the client of her exclusive authority to settle a civil case.
Inquiry:
I write to request an opinion from the North Carolina State Bar regarding the following language which I contemplate inserting in my employment agreements for contingency fee cases:
No settlement of my claim shall be made without the consent of both me and my attorney.
I have read this contract and understand it, agree, and sign it of my own free will.
Clearly, through this language, the client contracts to waive his exclusive right to settle the case. Would this allow me to refuse to settle the case for a given amount, and, if need be, try the case if I thought an offer the client was willing to accept was less than the settlement value of the case; or would the use of this language violate Canon VII and Rule 7.1 of the Rules of Professional Conduct? What language, if any, do you suggest I insert in an employment agreement that would assist me in resolving a situation where the client and I disagree on the value of a settlement offer?
Opinion:
Rule 7.1(c)(l) provides that a lawyer shall abide by a client's decision whether to accept an offer of settlement of a matter. Therefore, a lawyer cannot divest a client of his exclusive authority to settle his case.
There is no ethical impropriety in having the sentence, "I have read this contract and understand it, agree, and sign it of my own feel will," in the retainer agreement.