Anatomy of an Aggregate Settlement: The Triumph of Temptation Over Ethics

In an aggregate settlement, usually of a mass tort claim, a defendant agrees to pay a specific dollar amount to be divided up by the lawyer among her multiple clients which may number in the hundreds and even thousands. Each client, therefore, is in competition with all of the lawyer’s other clients suing the same defendant for a share of the fixed sum. Rule 1.8(g) of the ABA Rules of Professional Conduct requires that each client give their informed consent to their allocation. To facilitate the settlement and the often quite substantial contingency fees to be earned, lawyers may mislead clients into believing that the amounts allocated to them were the result of individual bargains between their counsel and the defendant. Indeed, notorious examples of lawyers’ failures to abide by the rule abound in the literature.