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ETHICS OPINION 242-1926
ETHICS OPINION 242
NUMBER 242 1926
Question. In its answer in Opinion 235, the Committee expressed its disapproval of a lawyer for a defendant communicating to a plaintiff personally an offer of settlement, which the plaintiff’s attorney refused to communicate to the plaintiff; the opinion indicates that this view is in harmony with Canon 9 of the American Bar Association.
There are, however, judicial decisions to the effect that a client may settle his cause of action in good faith without the consent of his attorney (e.g., Fischer-Hansen v. Brooklyn Heights R.R. Co., 173 N.Y., at p. 500; Peri v, N.Y.C. & H.R.R. Co.. 152 N.Y. 521; Coughlin v. N.Y.C. & H.R.R. Co., 71 N.Y. 443); and that a contract between attorney and client that such right of the client may not be exercised without the consent of his attorney is unenforcible and void as against public policy (e.g., Matter of Snyder, 190 N.Y. 66).
Where a defendant desires to negotiate such settlement with a willing plaintiff, and plaintiff’s attorneys being notified of such desire and willingness refuse their consent because of a contingent fee agreement for a share of the recovery, and insist that their client shall refuse settlement and permit them to continue to prosecute the action; and where both parties still desire to settle and defendant is willing to indemnify plaintiff against the claim of his attorneys and plaintiff is willing to accept such indemnity; and where defendant, who has conducted the negotiations for settlement directly with the plaintiff without the aid of his defendant’s attorney, notifies his said attorney that the parties are willing and anxious to settle their dispute accordingly, and that he (defendant) seeks his said attorney’s aid in perfecting the arrangement arrived at between the parties, what then, in the opinion of the Committee, is the professional right and duty of the defendant’s attorney, considering his duty to his client, as well as his relation to the attorney for the plaintiff?
Answer. The Committee does not approve settlements between parties participated in by the defendant’s attorney without the knowledge of the plaintiff’s attorney, and it equally disapproves selfish opposition of the plaintiff’s attorney to a settlement agreeable to the parties. It is of the opinion that if there be no intent to defraud, the defendant’s attorney may properly render services to his own client in consummating the settlement between the parties, but he cannot, with propriety, advise the plaintiff. The usual obligation to deal with the opposing attorney is rendered unnecessary by the facts stated in the question.