The Aggregate Settlement Rule: A Rule in Search of a Definition

WITH THE advent over the past quarter century of global settlements of mass torts, the rule American Bar Association Model Rule of Professional Conduct 1.8(g)--has come to play an increasingly central role in the calculus of counsel for plaintiff's and defendants alike. (1) Oddly, however, the term aggregate settlement has never been defined in the rule, its predecessors or its accompanying comments. The absence of a definition is not merely academic. Because ABA Model Rule 1.8(g) and its state cotinterparts (2) impose very strict disclosure obligations, failure to follow the rule raises the specter that the involved will be unenforceable and creates the risk of a wide variety of other serious consequences to claimants' counsel that may effectively impede their willingness to entertain collective resolutions. (3) Given the severity of the rule's obligations and the attendant consequences if unmet, the absence of a definition creates significant practical uncertainty about when the rule does and does not apply. This definitional uncertainty becomes very real in an era when 'group conferences and multi-case mediations frequently put more than one case on the proverbial negotiating table at the same time. This article will examine three facets of the rule. First, the rule and attempts at an accompanying definition are surveyed. Second, the practical effects of the lack of a definition are discussed. Third, practical solutions from the defense perspective are offered to address the uncertainty arising from the absence of a clear definition. I. The Aggregate Settlement Role and Attempts at a Definition ABA Model Rule 1.8(g) currently reads: A lawyer who represents two or more clients shall not participate in making an of the claims of or against the clients, or in a criminal case an aggregated agreement as to guilty or nolo contendere pleas, unless each client gives informed consent, in a writing signed by the client. The lawyer's disclosure shall include the existence and nature of all the claims or pleas involved and of the participation of each person in the settlement. The rule reached its present form as a part of the general Ethics 2000 amendments to the ABA Model Rules adopted by the ABA House of Delegates in 2002. (4) A comment addressing the rule was added to Model Rule 1.8 at that same time: Aggregate Settlements [13] Differences in willingness to make or accept an offer of are among the risks of common representation of multiple clients by a single lawyer. Under Rule 1.7, this is one of the risks that should be discussed before undertaking the representation, as part of the process of obtaining the clients' informed consent. In addition, Rule 1.2(a) protects each client's right to have the final say in deciding whether to accept or reject an offer of and in deciding whether to enter a guilty or nolo contendere plea in a criminal case. The rule stated in this paragraph is a corollary of both these Rules and provides that, before any offer or plea bargain is made or accepted on behalf of multiple clients, the lawyer must inform each of them about all the material terms of the settlement, including what the other clients will receive or pay if the or plea offer is accepted. See also Rule 1.0(e) (definition of informed consent). Lawyers representing a class of plaintiffs or defendants, or those proceeding derivatively, may not have a full client-lawyer relationship with each member of the class; nevertheless, such lawyers must comply with applicable rules regulating notification of class members and other procedural requirements designed to ensure adequate protection of the entire class. …