Fw: Unethical Lawyers ~ Wall Street Journal

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From: " ilena rose " <ilena@...>

Sent: Friday, May 18, 2001 4:47 PM

Subject: Unethical Lawyers ~ Wall Street Journal>

> The following are excerpts from The Wall Street Journal on 5/16/01

>

> SOME COMPANIES PAY LAWYERS NOT TO SUE AGAIN

> Ethics Codes Say Agreements Must Be Disclosed to Clients, But Not All

> Lawyers Do So

>

> By Milo Gevelin

>

> Here's a way for businesses to rein in costly lawsuits: pay plaintiffs'

> lawyers not to sue.

>

> That may seem far-fetched. But courts and bar disciplinary groups have

been

> cracking down on deals in which companies privately pay lawyers large sums

> to settle their clients' cases - if the lawyers promise not to sue again.

>

> Sound unethical? Usually it is. Any agreement by lawyers to limit future

> representation of possible clients effectively constrains the public's

> access to the courts. That's why state legal-ethics codes prohibit

offering

> or accepting " practice restriction agreements " as part of any settlement.

>

> But these agreements have become increasingly common, say lawyers and

ethics

> experts, particularly in cases in which lawyers amass a large number of

> claims involving big potential damage awards against a single company. A

> frequent condition of settling, says New York plaintiffs lawyer

> Rheingold, is that the plaintiffs lawyers agree not to bring similar

claims

> on the behalf of other plaintiffs in the future.

>

> For defendant companies, the alternative is to face future lawsuits on

> behalf of new plaintiffs financed by lawyers' fees from prior settlements,

> says Geoffrey Hazard, a legal-ethics professor at the University of

> Pennsylvania. " There is a strong incentive to get that lawyer out of the

> picture. " he says.

>

> One way defendants can ethically do that, says Mr. Hazard, is by signing

> plaintiffs' lawyers up as " consultants, " thereby creating a conflict of

> interest that prohibits them from suing the company again.

>

> " It's a contrivance, " says Mr. Hazard, " but it's significantly within the

> rules. " The only qualification is that the plaintiff's lawyer must

disclose

> the consulting arrangement to the current client beforehand. " There are

> some lawyers who don't do that, " Mr. Hazard adds.

>

> In the biggest case to come to light, DuPont Co. paid a now-defunct Miami

> plaintiffs' firm a $6.4 million side payment five years ago to settle a

> batch of crop-damage suits brought by 48 commercial growers who used its

> Benlate fungicide. Lawyers for both sides reached the side deal during

> settlement negotiations after a state judge in Miami barred DuPont's

defense

> arguments as punishment for withholding evidence, leaving the company

facing

> a potentially huge damage award.

>

> As part of the deal with DuPont, the two lead plaintiffs lawyers returned

> all confidential company documents, agreed to seal the court file -

> including the judge's order sanctioning DuPont for misconduct - and, as

> newly hired DuPont consultants, effectively barred themselves from any

> involvement in future Benlate cases. They got the $6.4 million fee, on

top

> of their contingency fee of roughly 30% of the $59 million settlement they

> negotiated for their clients.

>

> For DuPont, the deal eliminated the threat of future litigation brought by

a

> plaintiffs firm specializing in Benlate. The agreement surfaced in state

> court in Gainsville last July, after the firm's clients became suspicious

> and sued both DuPont and the lawyers for fraud. The growers contend they

> were kept in the dark about their lawyers' stake in the settlement and

> forced to either accept the settlement or find other counsel. The Florida

> Bar Association is investigating.

>

>