Can a Lawyer Settle Without My Consent?

After filing a personal injury claim, many injured accident victims want to know two things, “Can I settle without my lawyer?” and “Can a lawyer settle without my consent?”

Let’s tackle the first question. While you can legally settle any injury claim without a lawyer, it is not in your best interest. Settling without a lawyer is what the insurance company wants. They want you to agree to a low settlement amount so they can protect their own interests. NEVER sign any settlement without speaking to your personal injury attorney. You could lose the money you need to recover. So never settle without your lawyer.

But can your lawyer settle your claim without your consent? Personal injury claimants put a lot of trust in the lawyers that assist them in seeking compensation. They not only provide their legal team access to private medical and financial records, but they give their legal counsel permission to act as their voice when negotiating with insurance adjusters or presenting to judges. The expectation that experience and care will garner a more favorable payout is inherent, though putting blind faith in a legal team is easier said than done.

If you struggle to trust your legal representation to help you get the correct settlement amount, fear not you are always in control. Your attorney cannot settle your case without your consent because doing so would violate their ethical duty.

How the Settlement Process Works

A settlement is a way of resolving a personal injury claim without going to court.

The many advantages to resolving a claim this way include:

• It often results in a quicker resolution than litigation
• It is less expensive and time-consuming for all parties involved
• Each party has some control and say over the provisions of the agreement

While a settlement is an out-of-court resolution, the final agreement is a legally binding contract. Because of this, both the claimant and the defendant must agree to the provisions. Without your consent and signature, such a contract is not valid.

Generally, settlement negotiations begin before filing a lawsuit by submitting a demand package through your attorney to the at-fault party’s insurer. This package details the merits of your claim, provides documentation of expenses, and demands payment on the value of your claim. The insurance provider receives and analyzes the claim before deciding to either accept it as submitted, reject it and provide the claimant with written notifications detailing the reasons for the denial, or offer a settlement.

Offered settlements are almost always below the claim’s value, and early offers are often well below. When your attorney receives an offer, they will review the details with you and help you decide whether to accept it. The decision, however, is always yours to make.

What Happens if a Lawyer Accepts a Settlement Without My Consent?

Lawyers are bound to act in a way that will benefit someone else, particularly financially, in this case, their clients. This is a fiduciary duty. Suppose a lawyer accepts a settlement on behalf of the client without explaining the provisions or obtaining the client’s consent to accept the offer. In that case, the lawyer breached their fiduciary duty.

This scenario could lead to a legal claim against your attorney and would most assuredly harm their professional reputation.

Proving Breach of Fiduciary Duty

If your lawyer accepted a settlement without your consent and you sought compensation for the harm you suffered as a result of their breach of fiduciary duty, you must show:

• An attorney-client relationship existed. The attorney had agreed to provide services to you through a mutually signed contract.
• A breach in fiduciary duty occurred when the attorney accepted a settlement offer without your consent, failing to act in your best interests by allowing you to fully understand and consent to the agreement.
• This breach damaged you. You must prove that the breach financially harmed you, as you would not have agreed to the settlement if you had fully understood it and your lawyer gave you the choice to make a counteroffer or seek the full value of the claim in court.

A personal injury lawyer cannot assist you with a breach of fiduciary duty claim. You would need a contract lawyer in this circumstance.

An Alternative to Legal Action

If your lawyer accepts a settlement without your consent, you can also file a complaint against the attorney with your state’s Bar Association.

Florida, for example, gives clients basic legal rights that include:

• The right to have legal counsel capable of handling their case.
• The right to an attorney who provides zealous representation.
• The right to have their confidences and secrets preserved by their attorney throughout the case.
• The right to make the ultimate decision on the objectives in the case.
• The right to pay a reasonable fee for attorney services and to understand the basis of the fee. Additionally, clients have the right to bargain with their attorney to obtain a lower fee.
• The right to respect at all times from an attorney who exhibits the highest degree of ethical contact.

What a Lawyer May Do After a Settlement Offer

As long as you consent to the services, an experienced personal injury attorney may:

• Review the policy details of the at-fault party’s auto liability insurance policy to determine the maximum amount of compensation available. Additionally, a lawyer can investigate your claim to determine if additional insurance resources could compensate you.
• Establish a value of the claim based on available insurance resources, the severity of your injury, and the expenses and psychological impacts you incurred.
• Send a demand letter on your behalf to the at-fault party’s insurer.
• Communicate with the insurer to facilitate a fair settlement offer and protect you from common insurance tactics used to reduce or deny claims.
• Guide you through the process, including helping you to understand how your claim is valued and what is a fair settlement. You can use this information to determine whether to accept a settlement offer.
• Help you understand all provisions of the offer before you sign the agreement.
• Collect your settlement.

What a Lawyer May Not Do Regarding a Settlement Offer

The American Bar Association’s Rule 1.8 prohibits a lawyer from:

• Entering into a business transaction with a client unless the provisions of the transaction are fair and reasonable to the client and are fully disclosed and provided in writing to the client in a manner they can understand.
• Using information relating to the representation of a client to the disadvantage of the client or the advantage of themselves or a third party unless the client consents after consultation.
• Providing financial assistance to a client in connection with pending litigation except advancing the cost and expenses of litigation based on a contingent agreement that a successful resolution of the claim will repay. In dire circumstances, a lawyer might help you identify appropriate means of financial assistance or speak to creditors about deferring your payments.
• Accepting compensation for representing a client from anyone other than the client without their consent.

How Is a Lawyer Paid After a Settlement?

Personal injury lawyers generally use contingent-fee billing. This means that you can withhold payment for your lawyer’s services until after a successful outcome to your claim. Your attorney provides the provisions that outline how much they receive for their services at the beginning of your attorney/client relationship.

When you decide to hire your personal injury attorney, before the settlement process begins, you must sign a contract. It will outline the services you can expect from your lawyer

Commonly included clauses in these agreements include:

• The lawyer’s agreement to exercise their best efforts on behalf of their client and to keep their client appraised on an ongoing basis of any decisions that need to be made regarding trial or settlement.
• The client’s agreement to cooperate with the lawyer’s requests and assist with information as needed. The client also generally agrees to not participate in a settlement without the lawyer’s participation and consent, not to speak with or consult with others about the case, and not to do any act that impairs the value of the claim.
• The client’s agreement to provide an agreed-upon percentage of the settlement to the attorney. If there is no recovery for the client, the lawyer receives nothing for their services.

The agreement also provides for the receipt of the settlement to the attorney, who deducts their fees and any other expenses they contractually agreed to pay and forwards the remainder of the award to the client.

What Compensation Can You Receive Through a Personal Injury Settlement?

Individuals are permitted to use the state court system to seek compensation for the expenses and impacts of the injuries they sustained due to someone else’s carelessness or recklessness. This is called recovering economic and non-economic damages.

Economic damages involve payment for the expenses you incurred because of your injury, such as:

• Medical expenses
• Wage loss
• Loss of future earning capacity
• Property damage (such as damage to your car in a motor vehicle accident)

Non-economic damages refer to payment for the psychological impacts of your injury, such as:

• Physical pain and suffering
• Emotional distress
• Loss of the enjoyment of life

Do I Have to Pay Taxes on My Settlement?

According to the Internal Revenue Service, settlements received in compensation for personal injury are not considered income and are not subject to income tax. However, if you deduct medical expenses for your injury from your taxes in one year then receive a settlement that includes payment for medical expenses, you must repay that deduction by including it as taxable income.

The Ultimate Decision Is Always Yours

The settlement process is long and arduous. It won’t happen overnight, but with the guidance of a skilled lawyer, you can prepare yourself for the road ahead. Valuing your claim will take time because it not only includes the expenses you have already incurred but those you will likely incur in the future.

You’ll likely find yourself roadblocked by insurance adjuster tactics, low-ball offers, and lengthy follow-ups. While some attorneys may push their clients to accept a settlement offer they aren’t necessarily pleased with to clear their caseload, a good attorney will leave the decision to you.