Professional
Responsibility
Seeking a Delay as Strategic Advantage
Your law firm represents All-Nation Insurance, a wholly owned subsidiary of Rite-Aid Drug Company. You are a member of a five-person management committee that makes policy decisions for the fifteen member firm. The firm has two partners that spend 80-85% of their billable hours representing All-Nation in the settlement and trial of insurance claims involving All-Nation. The two partners who handle the insurance defense work are not members of the management committee.
The partners who handle litigation for All-Nation have asked the management committee to consider the following: The General Counsel in the Cleveland home office of All-Nation has forwarded the litigation partners a memorandum informing them that Rite-Aid has become the target of a recent effort at a leveraged buy-out and is drawing heavily on All-Nation's financial reserves to finance a strategy to block the buy-out. The President of All-Nation (who is himself a lawyer) has requested that local counsel (that is, your law firm) seek delays in all pending cases to avoid the possibility of adverse publicity and adverse cash flow that would result from unfavorable jury awards. The General Counsel's memorandum notes that the new policy is necessitated by substantial adverse cash flow created by increased claims and a rash of million dollars plus plaintiffs' victories.
The partners who represent All-Nation ask for advice of the management committee.
How should the firm respond to the client's request?
The Comment to Rule 3.2 observes that:
Dilatory practices bring the administration of justice into disrepute. Delay should not be indulged merely for the convenience of the advocates, or for purpose of frustrating an opposing party's attempt to obtain rightful redress or repose. It is not a justification that similar conduct is often tolerated by the bench and bar. The question is whether a competent lawyer acting in good faith would regard the course of action as having some substantial purpose other than delay. Realizing financial or other benefit from otherwise improper delay in litigation is not a legitimate interest of the client.
Other provisions of the Model rules provide guidance on the issue. The Preamble to the Model Rules of Professional Conduct, for example, makes reference to improper uses of legal procedures: "A lawyer should use the law's procedures only for legitimate purposes and not to harass or intimidate others." And a Comment to Rule 1.3 notes that:
A lawyer should act with commitment and dedication to the interests of the client and with zeal in advocacy upon the client's behalf. However, a lawyer is not bound to press for every advantage that might be realized for a client. A lawyer has professional discretion in determining the means by which a matter should be pursued.
The Comment to Rule 1.2, amplifies and complicates the point:
The client has ultimate authority to determine the purposes to be served by legal representation, with the limits imposed by law and the lawyer's professional obligations. Within those limits, a client also has a right to consult with the lawyer about the means to be used in pursuing those objectives. At the same time, a lawyer is not required to pursue objectives or employ means simply because a client may wish that the lawyer do so. A clear distinction between objectives and means sometimes cannot be drawn, and in many cases the client-lawyer relationship partakes of a joint undertaking. In questions of means, the lawyer should assume responsibility for technical and legal tactical issues, but should defer to the client regarding such questions as the expense to be incurred and concern for third persons who might be adversely affected.
Finally consider Rule 4.4:
In representing a client, a lawyer shall not use means that have no substantial purpose other than to embarrass, delay, or burden a third person, or use methods of obtaining evidence that violate the legal rights of such a person.
The Comment to Rule 4.4 provides that:
Responsibility to a client requires a lawyer to subordinate the interests of others to those of the client, but the responsibility does not imply that a lawyer may disregard the rights of third persons. It is impractical to catalogue all such rights.
The force of the rule and the sentiments expressed in the comment seem to move in different directions. If the aim of the Rules of Professional Conduct are clarity and bright-line rules for lawyers, guidance on the ethics of the tactics of delay during litigation fails dramatically.
When law students take up this problem, we see moral discourse in action and listen as students of law rehearse the Real World talk of lawyers. When a simulated law firm comprised of law students takes up this issue and begins their deliberations we see how hard it is to say no to a client.
Andy: First, let's define the problem.
Sue: Does it matter what the delays are for?
Andy: That's not the question. For me the question is whether it is an ethical question or just a matter of policy.
Sue: It's an ethical problem.
Elizabeth: I think it's terrible that people have to wait for their money because of what we are going to do. But then what happens if we don't ask for the delay?
Roger: The company is lost, people lose their jobs, no one gets paid.
Andy: It's not a matter of seeking illegitimate delays. Delays work to the advantage of both sides.
Elizabeth: But even if the delays are legal it doesn't make them right.
Andy: If it's legal, we can do it.
Roger: What is the benefit to anyone in speedily getting into court?
Elizabeth: [Gives example of injured parties who need the money.]
Roger: We're not talking about settling claims.
Sue: When anyone pays insurance premiums, they expect to get paid when they file a legitimate claim. Can't you see the harm that this will cause those who have filed claims that are now being contested?
Andy: People may expect, with insurance, that they have taken care of the problem, but in reality you are dealing with a company.
Sue: If you pay flood insurance and lose your house in a flood you are going to be outraged if you have paid all those premiums for 20 years and then don't get paid.
Phillip: My perception is that they are not wanting us to delay settlements in "legitimate" cases. It's a different issue if we are talking about delay in cases where the plaintiffs have legitimate claims.
Andy: If the company doesn't survive this cash flow problem they'll fold.
Elizabeth: How can we help the most people? When people sue they are trying to get more than they would when they settle.
Phillip: No, that's not right. When you settle you get less than you would if you litigated.
[An argument ensues about whether the firm will lose the client if the firm does not do what the client has requested.]
Phillip: Is it up to the firm to decide about delays? Don't judges make these kind of decisions?
Getting for the client what the client wants is, one student observes, "sleazy business." Sue focus on the harm caused by the requested delays, and tries to find a rhetoric that will personalize the harm so her colleagues can understand it as she does. Andy works assiduously to stay in the dark, as best he can, about the purpose of the delay, the interests it serves, and the harm caused by such a course of action. Even when informed by his colleagues what the delay means, he is slow to take account of the consequences of doing what the client wants.
As the conversation continues Phillip, influenced by Andy's adamant stance that there is nothing wrong in seeking the delays, reminds the others, that it may, whether they like it or not, be necessary to do what the client has requested. "We have to do what the insurance company wants. It's our job. We'll lost the client if we don't do it." Necessary in these conversations is always spoken with a capital N. When presented in this stark fashion, some participants in the conversation actually begin to pull back from this strong claim of necessity, the demands of Role, and the amoral stance being presented to them by their colleagues.
Note: See Paul G. Haskell,
Why Lawyers Behave as They Do 5-6, 69 (Boulder, Colorado: Westview
Press, 1998)
