Bauer on Secret Settlements

Jon Bauer (Connecticut) has recently posted an important article on SSRN on the ethics of settlements that impede other parties’ access to evidence entitled “Buying Witness Silence: Evidence Suppressing Settlements and Lawyers’ Ethics.”  This issue is relevant to the civil rights context and products liability.  Here is the abstract:

Lawyers frequently draft settlements that impede otherparties’ access to relevant evidence, through clauses that prohibit theplaintiff from making voluntary disclosures to anyone with a claim against thedefendant, or forbid all uncompelled disclosures concerning the factsunderlying the dispute. This Article argues that lawyers who negotiate these”noncooperation” agreements violate Rule 3.4(f) of the Model Rules ofProfessional Conduct, which prohibits requesting someone other than the lawyer’sown client to withhold relevant information from another party, and Model Rule8.4(d), which prohibits “conduct that is prejudicial to the administrationof justice.”

The conventional wisdom among practitioners and legal ethics scholars has beenthat lawyers may ethically negotiate any settlement terms that serve theirclients’ interests and are not criminal or fraudulent. (Some recent critics ofsettlement secrecy have argued that noncooperation settlements violateobstruction of justice statutes or other criminal laws, but the illegalityargument is largely unconvincing.) This Article argues that the conventionalview has looked at the problem through the wrong lens. In the ethos of theethics codes, third party and societal interests generally take a back seat toclient service, but certain types of conduct deemed especially harmful to thejustice system have long been placed off-limits to lawyers because of theirspecial role as “officers of the court.”

This Article traces the history of one such duty, the principle that lawyersmust not ask nonclients to refrain from voluntarily disclosing relevantinformation to other parties or their attorneys, and shows the importantfunction that it plays in safeguarding the integrity of adversary adjudication.After providing a theoretical justification for liberally construing ethicsrules that limit client advocacy for the sake of the adversary system’seffective functioning, this Article explores what the rules mean for settlementpractices. The Article examines how far the duty to allow disclosures ofrelevant information to other parties extends; the scope of the exceptionallowing noncooperation requests to be made to a client’s employees; whether itis permissible to require that certain types of information, such as settlementamounts, discovery materials, privileged information, and trade secrets, not bedisclosed; and what limits may be placed on the manner of disclosure. Theconclusion addresses the critique that prohibiting lawyers from negotiatingagreements that their clients could lawfully enter into on their own is eitherfutile or paternalistic, and shows that it is neither.

ADL