Document Type

Article

Publication Title

Notre Dame Law Review

Volume

80

Publication Date

2004

Keywords

Aggregate settlement, aggregate settlements, complex litigation, multiparty litigation, class action

Abstract

It is odd, considering how often lawyers engage in aggregate settlements, that no one seems able to explain what "aggregate settlement" means. It is one of the most important yet least defined terms in complex litigation. Lawyers and judges talk about aggregate settlements as though it were obvious what the term signifies and as though it describes a single thing. In fact, group settlements in multiparty litigation vary significantly. And they vary in ways that make it difficult to determine whether certain deals ought to be understood as collective settlements or simply as groups of individual settlements bundled together. This much is clear: large-scale multiparty litigation generally settles in clusters rather than one claim at a time. In this Article, I develop a typology of aggregate settlements. By defining collective settlements in terms of their essential attributes, I hope to offer a more precise way of understanding and describing settlements in multiparty litigation and a sounder approach to applying the special ethical duties that attend aggregate settlements. Part I explains why settlements often come in bunches, focusing on the business imperatives that impel both plaintiffs' counsel and defendants, for different reasons, to favor collective resolutions. Part II shows that despite the frequency of group settlements, and the extent to which the term "aggregate settlement" is invoked, the term is rarely defined with clarity and never defined with adequate attention to its significance in regulating lawyer conduct. Part III offers a definition of the term based on a typology along two axes: allocation and conditionality. By looking at the essential features of group settlements, it is pos- sible to identify those settlements that impose on client autonomy or create client-client or lawyer-client conflicts of interest and to distinguish the types of imposition and conflicts. Part IV uses the typology to delineate a sound application of the aggregate settlement rule, a rule of professional conduct that prohibits aggregate settlements in the absence of disclosure and informed consent. Finally, although the typology primarily addresses multiparty settlements in non-class litigation, Part V explores how some of the same ideas might be applied to improve understanding of the structures of class action settlements.

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