One thing we do know for sure: the lawyer was rushed. And therein lies much of the problem.
This mind-blowing scenario, that could have easily been an episode on “Boston Legal” or “Ally McBeal,” occurred in California. After a week long trial in a personal injury case where the brain-damaged plaintiff’s lawyer had asked for millions in damages, jurors deliberated only four hours and announced they’d reached a decision. Both lawyers were certain a defense verdict, against the disabled man, was coming. Plaintiffs attorney C. Michael Alder pulled defense counsel into the hallway for last-minute settlement negotiations, hoping that the defense would agree to some damages as insurance against a surprise plaintiff’s verdict. With his developmentally disabled client (who had suffered brain injuries in a fall from an ambulance) and his mother by his side, Alder exchanged figures and rejections with defense lawyer James Siepler, who had an insurance claims adjuster on his cellphone.
Los Angeles County Superior Court Judge Michael Johnson was impatient, for the jury was ready to give its verdict. Literally at the last second, Alder and Siepler agreed to a $350,000 settlement, and returned to the courtroom. “The parties have advised me that they have reached a settlement of the case,” the judge informed the jurors, adding, “They will be happy to talk with you out in the hallway to get your views.”
They got the jurors’ views, all right. The jurors told the attorneys that they were going to award the plaintiff 9 million dollars.
Then, as the judge described it, chaos reined. Alder ran back into the courtroom, yelling that the judge should call the jurors back and take the verdict. Defense attorneys were shouting that the settlement was done, and the case was over. Johnson called a recess, and when court resumed Alder told the judge, “I made a mistake in that I did not have authority to settle this case.” His client said that he hadn’t approved the settlement, that, Alder insisted, made it invalid. He wanted a new trial.
Here’s what we know:
- A lawyer must consult with his client before agreeing to a settlement. (ABA Model Rule 1.2; 3-510 in California’s rules) It is the client’s decision, 100%. For Alder to do what he says he did would be a serious ethics violation.
- With clients who are disabled, however, a lawyer is sometimes justified in deciding that the client is incapable of acting in his own best interest, and substituting his judgment for the client’s, using the standard of trying to do what the client would do if the client was capable of making the decision rationally and competently. It doesn’t help that California is perhaps the least helpful of all the states in giving lawyers guidance regarding their duties to a cognitively disabled client.
- If Alder’s client really did agree to the settlement (or his mother, who also may have been acting as the client’s agent), then Alder is lying to the court–obviously an ethics breach of the highest order.
- If the client really didn’t agree (or if Alder wasn’t properly making the agreement for him), then Alder is placing himself in serious jeopardy by claiming that he made an unethical deal. Not only is he admitting to unethical behavior, he is admitting to malpractice that cost his client over 8 million bucks.
- The judge never officially approved the settlement, which would normally involve his asking the client if he agreed to the amount. If that had been done, none of this would be happening.
If Michael Alder is risking his law license and his personal finances in order to get a brain-injured man the money he believes he needs and deserves, it is an astoundingly brave and self-less act. The best case scenario for him is that the judge grants a new trial, and he receives a rap on the knuckles from the California Bar disciplinary committee because he has an unblemished record and the rushed nature of the negotiations caused him to err. The worst case: the verdict stands, he loses his law license for lying to a judge, and loses a malpractice law suit with an 8 million dollar price tag.
Maybe his motives aren’t so pure, however. If the settlement is $350,000, he’ll get about $125,000 of it, maybe a bit more. A $9 million verdict, though, puts more than $3 million in Alder’s own pocket.
So…was Alder unethical? Zealous? Dishonest? Altruistic? Devious? Courageous?
I have no idea. But as I noted at the beginning, none of this would have happened if decisions weren’t made under time pressure, with a life and millions of dollars at stake. When the screws start tightening, it is difficult for even ethical people to think about ethics. That’s when the ethics alarms become more important than ever.