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When settling a case constitutes legal malpractice

All attorneys in the state of New Jersey must follow the Rules of Professional Conduct. Failure to do so can be grounds for legal malpractice. One common basis for a legal malpractice claim is that an attorney accepted a settlement offer without the client’s consent.

Under the New Jersey Rule of Professional Conduct 1.4, an attorney must provide you with enough information to allow you to make an informed decision about whether to accept a settlement offer. This is known as informed consent. Informed consent means that you understand all of the circumstances and facts surrounding a settlement, as well as all of the terms of the settlement, before you sign the dotted line.  

Attorneys can achieve informed consent in different ways. Some attorneys put the settlement terms to writing for you to read. Others provide you with a letter that outlines the specific reasoning why the attorney believes you should or should not accept the offer. Regardless of the method, an attorney has an obligation to ensure that you have had sufficient time to consider the settlement offer and that you have answers to all of your questions.

Remember, accepting a settlement offer is ultimately your decision to make. Rule 1.2 specifically states that an attorney must abide by a client’s decision whether to settle a matter. In other words, even if the attorney advises against a settlement, you can still choose to accept it.

As you may expect, there are exceptions to this rule. One exception involves a client’s capacity. If an attorney believes that you have diminished capacity that puts yourself at risk of some substantial harm, the attorney can take reasonable steps to protect you. The attorney can, for example, ask a court to appoint a guardian ad litem, a conservator, or a guardian to represent your interests.

If you are not satisfied with the terms of a settlement, you may have a legal malpractice claim. The likelihood of success on the claim depends on the facts of your particular case. To find out more, consider speaking with an attorney who specializes in legal malpractice cases.

 

Source: NJ.AAML.org, “Settlement: The Client’s Prerogative,” Amanda S. Trigg and Joseph DiPiazza, Oct. 2012

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