Mass Lawsuits and the Aggregate Settlement Rule
48 Pages Posted: 16 Oct 2015
Abstract
This Article, which was prepared for the Wake Forest Law Review's 1997 symposium on "Legal Professionalism," presents the first sustained scholarly analysis of the operation in mass litigation of the "aggregate settlement rule" (e.g., state equivalents of ABA Model Rule 1.8(g)). Our thesis is that clients and their lawyers should be permitted to agree on alternatives to the disclosure and consent requirements set out in the Rule.
Part I describes the basic economic structure of group lawsuits and discusses the incentives parties have to sue in groups. Part II models the allocation conflict that arises whenever lawyers negotiate settlement on behalf of multiple clients, and considers how well the existing Rule constrains these allocation conflicts. Part III briefly describes four problems sometimes caused by the Rule: invasions of client privacy; inability of settling plaintiffs to offer defendants complete freedom from litigation; expense and delay in settlement negotiations; and strategic behavior by group members that frustrates global settlements. Part IV argues that the Rule should be amended to permit alternative private orderings when clients and their lawyers consider them appropriate.
Keywords: mass torts, aggregate settlements, rules of professional responsibility, plaintiffs' lawyers, attorney-client relationship
JEL Classification: K1, K10, K20, K40, K41
Suggested Citation: Suggested Citation