Confidential Settlements for Professional Malpractice

Authors

Sande L. Buhai

Document Type

Article

Abstract

(Excerpt)

A lawyer representing a plaintiff in a professional malpractice case advises her client not to file a complaint with the state regulatory body—the state bar, the medical board, or some other pertinent body—until later. The lawyer explains that she can offer to settle the case more favorably, more quickly, and at lower cost if they promise that, as part of the settlement, defendant’s malfeasance will never be reported to the state regulatory body responsible for ensuring professional competence in the area. This tactic may allow the client to negotiate a larger settlement because the defendant should be willing to pay more to avoid having to defend himself in an administrative, criminal, or disciplinary proceeding. Although the lawyer’s present client may benefit, failing to report professional malfeasance may hurt both future clients and the public at large. Professional regulatory agencies exist to protect the public from substandard professional services. Advising a client to withhold relevant information from such agencies for personal gain—both the client’s and the lawyer’s—raises serious public policy issues. The dangers of confidentiality provisions have been explored in other contexts, particularly in products liability and sexual harassment cases. This Article explores similar problems in the context of professional malpractice. Much of the discussion here will focus on legal malpractice; however, similar concerns and arguments apply to other professionals as well.