The Settlement Problem in Public Interest Law

By Carle, Susan D. | Stanford Law & Policy Review, Winter 2018 | Go to article overview

The Settlement Problem in Public Interest Law


Carle, Susan D., Stanford Law & Policy Review


     Introduction                                                     2 I.   What Lawyers May Not Do                                          8      A. Lawyers May Not Take Away Clients' Rights to Make Settlement      Decisions                                                        8      B. Lawyers May Not Vary the Allocation of Decision-Making      Authority      on Settlement through Contract                                   9      C. Lawyers May Not Contract with Clients for the Right to      Withdraw      Following Rejection of Settlement Advice                        10 II.  What Lawyers May Do                                             13      A. Lawyers May Limit the Scope and Duration of Their      Representation      Obligations                                                     14      B. Lawyers May Recoup Fees for Client Representations           22      1. The Problem of Evans v. Jeff D                               24      2. The Solution in Venegas v. Mitchell                          27      C. Lawyers May Use Representation Arrangements that Transfer      Funding      Risks to Third-Party Payers                                     30      1. Third-Party Payer Arrangements                               31      2. Third-Party Funder Requests for Litigation Risk Assessments      from Public Interest Lawyers                                    34      Conclusion                                                      39      Appendix                                                        41 

INTRODUCTION

More than thirty years ago, in a famous article entitled Against Settlement, Professor Owen Fiss argued against settlement in public interest cases. (1) Fiss's provocation spawned an outpouring of responses over many years. Many commentators criticize Fiss's argument for a host of reasons. (2) Today, no one argues that public interest lawyers should not settle cases. Yet, an ongoing preoccupation with Fiss's article arguably reflects a deep, continuing ambivalence about case settlement in public interest law.

The issues that confront public interest lawyers in settling cases are often basic but thorny ones. (3) For example, what should a lawyer do when a non-fee-paying client decides against accepting a settlement offer the lawyer believes is the best outcome the client is likely to obtain? Sometimes it may be the client who wants to settle and the lawyer who wants to continue pursuing a case in order to establish a certain point of law. (4) Ethics precepts instruct lawyers to follow the client's instructions in both of these situations. Yet, when public interest lawyers are called upon to continue providing legal services to clients with hopeless cases, these lawyers face financial detriment and may soon find themselves out of business if they receive no compensation for their services. (5)

Settlement poses special difficulties for public interest lawyers because, in economic terms, clients who receive free legal services do not have to "internalize" the costs of these services. They do not face the economic considerations that help discipline clients' decisions about how much legal services to consume. Practical and monetary considerations necessarily constrain the ambitions of fee-paying clients. Clients who do not have to pay for legal services do not need to focus on the financial implications of settlement decisions in the same way that fee-paying clients do.

Moreover, political and ideological goals, rather than strictly monetary ones, often motivate clients in public interest cases. The potential complexity of such goals can further complicate client decisions about when and whether to settle. And clients who have decided to sue powerful institutions for breaches of the public interest often may not be the "settling" type. They may have a greater-than-average willingness to confront authority, and they may not be disposed towards accepting their counsel's advice about when and how to end legal confrontations. …

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