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  • InsideTrack
  • January 20, 2016

    Ethical Dilemmas: When Is a Comprehensive Release of Claims Ethical?

    Timothy J. Pierce

    Jan. 20, 2016 – Is it ethical to ask a client to sign a comprehensive release of claims as a means of “putting it all behind you” after the client has refused to pay fees owed and has accused the lawyer of malpractice?

    Question

    Lawyer represented Client in civil litigation on an hourly fee basis. Trial did not go well, and Client was a contentious and difficult client who did not timely pay invoices and owes Lawyer a substantial sum. Lawyer has sent several reminders of the fees owed, and in response Client has accused Lawyer of malpractice. After some negotiations, Lawyer offers to substantially discount the fees owed conditioned on the Client signing a “comprehensive” release, because Lawyer wants to put the whole matter behind him.

    Is Lawyer’s proposal ethical?

    Answer

    Lawyers are allowed to settle fee and malpractice disputes with former clients even if the former client is unrepresented, and to include limited releases in such settlements. SCR 20:1.8(h) directly addresses the situation and states as follows:

    (h) A lawyer shall not:

    (1) make an agreement prospectively limiting the lawyer's liability to a client for malpractice unless the client is independently represented in making the agreement; or

    (2) settle a claim or potential claim for such liability with an unrepresented client or former client unless that person is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel in connection therewith; or

    (3) make an agreement limiting the client's right to report the lawyer's conduct to disciplinary authorities.

    Tim PierceTim Pierce is ethics counsel with the State Bar of Wisconsin. Reach him by email or through the Ethics Hotline at (608) 229-2017 or (800) 254-9154.

    In this case, Lawyer could ask Client to sign a release of civil liability, provided Lawyer first advises Client in writing to seek the advice of independent counsel and provides Client with the opportunity to do so. Lawyer may not, however seek to contractually prevent Client from filing a grievance with the Office of Lawyer Regulation.

    As an example of the type of language to steer clear of, the following clause in a release violates SCR 20:1.8(h)(3):

    Waiver of Right to Sue. [The client] warrants and represents that he has not filed any complaint, charge, claim or grievance against Locke. [The client] promises never to file such a complaint, charge claim or grievance released by subparagraph (a) of paragraph 5 in the future.

    See OLR Public Reprimand 13-12.


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