The Restatement-producing American Law Institute has churned out a Tentative Draft of two key chapters in a path-breaking document — Principles of the Law of Aggregate Litigation. ALI members will consider whether to approve the Tentative Draft at the annual meeting in May of this year. Blawgletter has the honor of serving on the members consultative group that gets to, well, consult on the project.
We thought of Principles this morning when reading about progress in Merck’s quest for a global settlement of personal injury claims arising from use of Vioxx, a pain-killer that possibly caused heart attacks, strokes, and other cardiovascular conditions. See Merck’s press release here.
The connection between Principles and In re Vioxx resulted from our memory that Chapter 3 of the Tentative Draft deals with settlements of aggregate litigation, of which the Vioxx cases serve as the principal current example. We thought: Does the pending settlement comply with the principles in Chapter 3?
We doubt it. While aiming to ease the path for aggregate settlements, the Tentative Draft also builds in protections for individual claimants. It bars any across-the-board settlement unless the fee agreements include provisions that permit it upon approval of the settlement by a supermajority of the law firm’s clients. The requirement balances the clients’ interest in receiving fair compensation for their individual injuries with the defendants’ desire to achieve global peace. Firms don’t, in our experience, typically limit themselves in that particular way.
In the Merck deal, each lawyer/law firm could participate in it only if a certain percentage of his/its clients accept the settlement. The agreement also gives the lawyer/law firm incentives to withdraw from representing clients who reject it. Encouraging lawyers as it does to abandon recalcitrant clients, this feature of the arrangement gives some people pause.
We’ll take a closer look at the Tentative Draft to see how it handles the ethical issues that arise when an aggregate resolution provides monetary inducements to lawyers to disengage from their clients. And we’ll let you know what we find.