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Posts Tagged ‘settlements’

Does a California Lawyer Have to Convey All Settlement Offers to the Client?

Posted on: July 31st, 2019

By: Greg Fayard

Not necessarily. Under Rule 1.4.1 of the ethics rules for California lawyers, in criminal matters, all terms and conditions of plea bargains or other dispositive offers, whether written or oral, have to be communicated to the client promptly. In non-criminal matters, all WRITTEN offers have to be promptly communicated. But what about a VERBAL offer in a non-criminal case? That’s a judgment call for the lawyer. If the lawyer believes the verbal offer is a “significant development,” then, yes, an oral offer should be promptly conveyed to the client. If, however, only a nuisance value oral offer is made, and the lawyer does not believe such offer is significant, then the lawyer cannot be disciplined for failing to communicate said offer. Of course, in the off chance the State Bar investigated the lawyer’s decision to not convey a verbal offer, the Bar would determine if the oral offer was significant or not.

That said, the best practice is to convey all offers, regardless of form, to the client, and to do so promptly.

If you have any questions or would like more information, please contact Greg Fayard at [email protected], or any other member of our Lawyers Professional Liability Practice Group, a list of which can be found at www.fmglaw.com.

#MeToo Movement Leads to New California Laws

Posted on: October 9th, 2018

By: Gretchen Carner

California Governor Jerry Brown signed into law several work-related bills that will make it easier for workers to speak out about and sue over workplace sexual harassment.  The new laws codify a broader definition of sexual harassment that will make it easier for workers to bring and sustain harassment allegations in California courts, and block businesses from making workers sign nondisclosure agreements when they come on board, ask for raises or settle sex harassment suits, among other things.

California Government Code Section 12940 redefines sexual harassment and amends FEHA to make harassment legally actionable if it makes it harder for workers to do their jobs. The law, which takes effect Jan. 1, 2019, also tells judges to scrutinize employers’ motions for summary judgment on harassment claims. It also blocks businesses from giving workers raises or bonuses in exchange for their waiving FEHA claims or signing NDAs and makes it harder for businesses to win fees when they beat workers’ bias suits. Government Code section 12964.5 blocks businesses from making workers sign NDAs as conditions of sexual harassment settlements.

California lawmakers adopted an expansive definition of sexual harassment as outlined by Justice Ruth Bader Ginsburg in her 1993 concurring opinion in Harris v. Forklift Sys. (1993) 510 U.S. 17, in which she said that harassment is discriminatory conduct that could make a reasonable person who experienced it believe that it made it harder for them to do their job.  Section 12923 states harassment cases are “rarely appropriate for disposition on summary judgment” because a single incident of harassing conduct is sufficient to create a triable issue of fact.  In addition, the new section instructs courts that the legal standard for sexual harassment “should not vary by type of workplace.”

While California law has previously required harassment prevention training of 2 hours for supervisors of employers with 50 or more employees every two years, revisions to the law now require employers with 5 OR MORE EMPLOYEES to provide the harassment training for supervisors and adds that non-supervisorial employees must now be trained.  (Government Code section 12950.1.)

Brown also signed a bill enacting Corporations Code section 301.3 which is aimed at giving women more say in corporate governance by making public, California-based businesses put one woman on their board of directors by the end of 2019 and as many as three by the end of 2021.  This statute will have a significant impact on dozens of public companies that have no women on their boards.  For a review of this new law in more detail, please see Rebecca Smith’s upcoming blog, Women On Board.

We anticipate much litigation over these new laws and will be keeping an eye on how the courts will enforce and interpret these statutes.  If you have any questions, please contact Gretchen Carner at [email protected].

Insuring Against Rule 68 Offers of Settlement

Posted on: June 28th, 2018

By: Matt Grattan

One tool defense lawyers in Georgia frequently use to induce settlements is an offer of settlement under O.C.G.A. 9-11-68.   Rule 68 allows either party to a tort action to serve a written offer to settle the claim, so long as the offer is made within a certain time and satisfies several other elements under the statute.  If a Rule 68 offer is properly made by a defendant and rejected, that code section allows a defendant to recover its post-rejection attorney’s fees and expenses from a plaintiff in the event the plaintiff does not recover at least 75% of the offered amount at trial.

It is easy to see how the fee-shifting provision in Rule 68 can provide defense attorneys with leverage during settlement negotiations.  Simply put, it forces plaintiffs to put some skin in the game.  Because paying the defendant’s attorney’s fees and costs can significantly reduce or even eliminate a plaintiffs’ award at trial (and in turn a plaintiffs’ attorneys’ fees), plaintiffs may be more inclined to settle rather than face such risks at trial.

The fee-shifting benefit from Rule 68, however, could potentially be diminished by companies like LegalFeeGuard.   Established in Florida in 2012 to combat that state’s offer of settlement statute, LegalFeeGuard has recently started offering insurance policies in Georgia that cover attorney’s fees and costs under O.C.G.A. 9-11-68.  LegalFeeGuard offers no-deductible policies with limits as low as $10,000 and as high as $250,000.   Policies are triggered by a judgment in a bench trial or the return of a verdict in a jury trial, and are available to plaintiffs and defendants for a wide array of cases, including personal injury, breach of contract, and intentional torts.

What does the availability of fee-shifting insurance mean for defense lawyers and their clients?  LegalFeeGuard recently launched in Georgia (and the author is unaware of any other similar companies), so it is tough at this point to determine what kind of impact fee-shifting insurance will have on litigation in Georgia.  But this is certainly a development for lawyers to keep an eye on (particularly since LegalFeeGuard claims on its website to have sold over 1,000 policies in Florida) as such insurance may persuade more plaintiffs to roll the dice and take their case to trial knowing the downside risk of paying fees and costs is reduced, if not altogether eliminated.

If you have any questions or would like more information, please contact Matt Grattan at [email protected].

FINRA Increases Penalties For Brokers’ Bad Behavior

Posted on: May 8th, 2018

By:  Ted Peters

In further response to mounting pressure for securities regulators to exert greater control over problem brokers, the Financial Industry Regulatory Authority (“FINRA”) released Regulatory Notice 18-17 on May 2, 2018.  FINRA has long maintained a “rulebook” of sorts to guide adjudicators in disciplinary proceedings when addressing the propriety and scope of sanctions that might issue.  Akin to sentencing guidelines, the Sanction Guidelines “provide both general principles that apply to the overall process of determining sanctions for every case and specific recommendations of a range of sanctions for particular rule violations.”

The stated goal of the guidelines  is “to assist FINRA’s adjudicators in determining the appropriate sanctions in disciplinary proceedings and to provide consistency in the imposition of sanctions.”  Such sanctions can include fines, suspensions or industry bars.

This most recent Notice trumpets FINRA’s revisions to the guidelines to instruct adjudicators “to consider customer-initiated arbitrations that result in adverse arbitration awards or settlements when assessing sanctions.”  More specifically, FINRA adjudicators are now expressly instructed to consider imposing more serious sanctions when there is a discernible “pattern” considering a respondent’s disciplinary history, and history or arbitration awards.

“By enabling adjudicators to consider arbitration settlements and adverse arbitration awards, in addition to the traditionally considered final disciplinary actions, the Sanction Guidelines will allow adjudicators to take such settlements and awards into account in appropriate cases when determining whether a pattern of harm to investors or market integrity, or disregard of regulatory requirements exists.”

The Sanction Guidelines apply only to enforcement actions, not FINRA arbitrations.  The revisions go into effect on June 1, 2018.

If you have questions or would like more information, please contact Ted Peters at [email protected].

FDIC Publicizes Failed Bank Settlements

Posted on: March 28th, 2013

By: Kelly Morrison

In an apparent response to criticism for their lack of transparency, the FDIC has published dozens of settlement agreements arising out of the now 106 lawsuits the agency has filed against failed banks. The FDIC has indicated that it will post additional settlement information by March 31.

These settlement agreements provide valuable insight to both insurance carriers and former directors and officers sued in their individual capacities. For instance, an August 2012 settlement agreement between the FDIC and Heritage Community Bank reflects a payment of $3.15 million—exclusively funded by the Bank’s D&O insurer.  Conversely, an April 2012 settlement arising from the Corn Belt Bank and Trust Company litigation shows that the individual defendants paid $266,000 out of pocket, while the D&O insurer chipped in another $700,000.

Those interested in perusing these settlement agreements for valuable insights on current cases may locate them here.