The ethical and legal requirements of aggregate settlements apply to attorneys on both sides of the deal. Although plaintiffs’ counsel is tasked with making proper disclosures and obtaining client consent, defense counsel is ethically obligated to ensure an aggregate settlement is valid and enforceable. Both sides of the Bar must educate themselves on the rules related to aggregate settlements. As mass tort litigation has replaced class actions in recent years, the topic of aggregate settlements has generated significant discussion.1 In this article, we do not seek to repeat or critique the work of others, but to provide practical guidance for practitioners who find themselves on either side of aggregate settlement negotiations.

What is an Aggregate Settlement in Texas?

In modern mass tort litigation, plaintiffs’ counsel often gathers an inventory of cases including hundreds or thousands of plaintiffs or claimants. Sometimes the cases are consolidated by state courts or transferred to federal MDL courts. Other times, the cases are filed individually in multiple states and jurisdictions. The parties generally work up a handful of the cases and prepare for a bellwether trial. Then, on the eve of trial or after an initial jury verdict, settlement discussions begin in earnest. These discussions often involve not only the case at hand but an entire inventory of cases. The parties seek to negotiate a “global settlement,” which will compensate the claimants and extinguish all claims against defendants. What happens next controls whether the agreement will be considered an “aggregate settlement” under Texas law.

Read original article


Tags: