March 27, 2014 Articles

Practice Tips: The "Settle and Sue" Legal-Malpractice Case

When clients are feeling classic buyer's remorse.

By Saleel V. Sabnis

Buyer’s remorse has affected the most judicious of us. It’s that gripping sense of regret over having purchased an item that we only later realize we never really wanted or never should have bought in the first place. Of course, no one forced us to make the problematic purchase. It was entirely our own impulsion and belief that the transaction was the best deal at the time. Buyer’s remorse has a deeper psychological explanation, but it manifests itself because it is easier to imagine a better choice retrospectively than to embrace the choice we have already made.

These are the sentiments exhibited by some disgruntled plaintiffs in a recent trend of legal-malpractice cases that some courts and practitioners have termed the “settle and sue” lawsuit. A plaintiff in this type of legal-malpractice action is unhappy with settling a prior lawsuit even after the plaintiff voluntarily agreed to settle the case. In classic buyer’s remorse mode, disgruntled clients regret the decision to settle and focus their litigation crosshairs on their former attorney who advised the “negligent” settlement. The plaintiff’s sentiment is similar to that associated with buyer’s remorse: I made a mistake! In this case, the blame for that mistake is projected toward the former attorney.

The facts of the “settle and sue” case may mirror the following: A client files suit (or is a defendant); the client settles the case with advice from and consultation with his or her counsel and signs a settlement agreement; and the client then sues his or her attorney for legal malpractice, lamenting the deal. The defendant-attorney may be totally blindsided by the lawsuit. After all, was it not the client who executed a settlement indicating he or she was satisfied with resolving the case? The defendant-attorney is now forced to locate and dust off his or her file from storage (think the government warehouse in the last scene of Raiders of the Lost Ark) to defend the decision to settle a case that he or she believed the client had endorsed.

 “Settle and sue” cases can allege different conceptions of attorney malfeasance. Allegations may vary from 1) the settlement was transparently unfair, e.g., the settlement was worth far more or less than the terms accepted; 2) material facts that would have affected settlement were not timely disclosed and the defendant-attorney would have uncovered these facts had he or she rendered competent representation; 3) the terms of settlement were too complicated for the client to understand and the lawyer did not give a proper explanation; and 4) the client was “strong-armed” to settle by his attorneys and therefore true client consent was never provided in agreeing to settle.

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