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Law Rules

How we resolve our disputes

Entries in liability (2)


Caveat negotiator

An excellent article in the current issue of the Wisconsin Lawyer, titled “Negotiating in the Red Zone,” discusses the risk of legal malpractice liability for lawyers conducting settlement negotiations for clients.  The “red zone” occurs when an opposing party makes an offer within the client’s stated acceptable range but the attorney believes that they can obtain a better offer by rejecting it and negotiating further.  The risk is that the opposing party will terminate the settlement discussions and a trial will result in a worse outcome.  The author argues that lawyers are more vulnerable to professional liability when a settlement opportunity is lost in red-zone situations than in non-red-zone cases.

The article suggests that attorneys fully advise clients of the risks and benefits of continuing negotiations in such situations, and that they document and not deviate from the client’s agreed-on strategy.  It also mentions that this advice should be followed even in mediation.  It does not discuss how the mediator should address or participate in the decision to accept or reject a red zone offer.  At a minimum, the mediator should be aware of the ethical considerations and risks of liability that the attorney is facing.  While the mediator probably has no obligation to advise the lawyer of the heightened risk, doing so could enhance the prospect of a final settlement.  Without a participant’s consent, a mediator cannot disclose whether an offer is a final bottom line.  But the mediator can help attorneys and their clients to intelligently consider and evaluate the risks and benefits of continuing to negotiate versus accepting an offer.  The mediator might also help to document the attorney’s advice and the client’s decision regarding red zone negotiation strategy.  Thus, a mediator may help to reduce the attorney’s risk of ethical problems or professional liability. 

In other words, the article demonstrates another reason to seek out a mediator to assist in delicate or complex negotiations to resolve litigation or civil disputes.


One small step toward responsibility

Ten years ago, I wrote an article about municipal immunity in Wisconsin.  It was published in the Wisconsin Lawyer magazine under the title “Fighting City Hall.”  I concluded that judicial interpretations of the Wisconsin municipal claims statute were wrong, that the policy of municipal immunity did not work, and that there were better ways to protect public treasuries.

Now, at least one member of the Wisconsin Supreme Court appears to agree with me.  In Pries v. McMillon, Justice Gableman, in dissent, stated “I am not satisfied that our cases faithfully interpret” the Wisconsin municipal immunity statute.  He calls on the court to reexamine its jurisprudence in this area.  Amen!  It is about time.  Are the other six justices listening?

If there is one thing people hate about government, it is laws that apply to everyone except government employees.  Civil law is supposed to promote the exercise of due care for the safety of people who can foreseeably be injured by careless conduct.  When legislators and judges act in their official capacities, people’s rights are affected.  If we don’t like their decisions, we can vote against them in the next election.  But if other unelected government officials cause damage to citizens, we should be able to hold them accountable like anyone else — in a civil lawsuit.  Of course, police and other law enforcement officials should still be privileged to use reasonable force to enforce the law and protect citizens from danger.  But immunity can foster irresponsibility.  That should be the exception, not the rule.