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A lawyer represents one of the parties in a commercial lawsuit. Notwithstanding the lawsuit, the parties have continued to do business with one another. His client would like to resolve the lawsuit without either party being represented by counsel at the settlement discussion. The lawyer asks whether he is obligated to inform opposing counsel of his client’s intention to meet with a principal from the other side for the purpose of attempting to resolve the lawsuit?
The lawyer has an obligation to inform opposing counsel of his client’s intention to discuss settlement with adverse party.
DR 7-104(A)(l) provides:
“(A) During the course of his representation of a client, a lawyer shall not:
“(1) Communicate or cause another to communicate on the subject of the representation with a party he knows to be represented by a lawyer in that matter unless he has the prior consent of the lawyer representing such party or is authorized by law to do so.”
See EC 7-18.
Former Canon 9, to the same effect, provided: “A lawyer should not in any way communicate upon the subject of controversey with a party represented by counsel; much less should he undertake to negotiate or compromise the matter with him, but should deal only with his counsel.” Under Former Canon 9, it was held in ABA 73 (1932) that an attorney cannot, without the consent of opposing counsel, sanction an attempt by his client to reach a compromise settlement by direct communication with the adverse party.
The cited opinion stated that:
“Even should the client suggest a personal interview for the purpose of compromise without the consent of the adversary’s attorney, it would be the duty of his attorney to endeavor to dissuade him from so doing, as Canon 16 provides ‘A lawyer should use his best efforts to restrain and prevent his clients from doing those things which the lawyer himself ought not to do. ‘“
Cf. N.Y. County. 405 (1952); see also ABA Inf. 982 (1967), stating that the principle that a lawyer should not negotiate a settlement with an adverse party without the knowledge of the latter’s attorney applies to a lawyer where he is himself a party to the litigation as well as where he is acting as counsel for a party.
In view of the fact that the consent of opposing counsel obviously cannot be obtained unless he has knowledge of the proposed meeting, the lawyer must inform opposing counsel of it.