In Lerner v. Laufer, 359 N.J. Super. 201 (App. Div.), certif. den. ___ N.J. ___ (2003), the Appellate Division established for the first time in New Jersey’s legal history the appropriate balance between clients’ rights to and interests in (1) self-determination and (2) informed consent. It also determined that a lawyer’s duty of zealous advocacy must yield to a client’s knowing decision to settle a case based on little or no information gathering, analysis, or exchange (hereafter “information”).
Importantly, the Appellate Division ruled that a client may validly waive complete or partial information, as long as the client expressly and in writing confirms that (1) s/he knowingly and voluntarily accepts the known and unknown risks of settling without full information and (2) the lawyer is unable to make a recommendation regarding settlement, based on the client’s decision to abbreviate or eliminate ordinary and customary information processes.
The Appellate Division has thus determined that for public policy reasons, and absent special circumstances, parties to general civil and matrimonial cases may now consent to settle their cases without what lawyers would ordinarily consider informed consent:
The law has never foreclosed the right of competent, informed citizens to resolve their own disputes in whatever way may suit them. . . . The voluntary settlement of disputes is a central policy dictate of the judiciary and is expressly encouraged. Citations omitted. The courts approve hundreds of such settlements in all kinds of cases without once looking into their wisdom or the adequacy of the consideration that supports them. The court daily approves settlements upon the express finding that it does not pass upon the fairness or merits of the agreement, . . . so long as the parties acknowledge that the agreement was reached voluntarily and is for them, at least, fair and equitable.
359 N.J. Super. at 217 (emphasis added).
The “special circumstances” articulated by the Appellate Division, which could yield a different result on different facts, include a party’s mental incapacity, duress, or the existence of domestic violence. 359 N.J. Super. at 219.
Less clearly articulated, but of special concern to practitioners, was the Court’s reference to factors such as a settlement agreement’s violation of any law or public policy, failure to protect the best interests of children, or the agreement’s “fostering” of non-disclosure to appropriate tax authorities. As to the last item listed, in family law cases and often in general civil cases, the decision to mediate is sometimes driven by the parties’ (or their counsels’) reluctance to expose sensitive tax issues to a trial court and consequent referral to the tax authorities. The Appellate Division has left open and unresolved how practitioners are expected to handle these difficult issues, but strongly suggests that such circumstances would modify the standards of expected care.
Some possible conclusions to be drawn from these “special circumstances” are that attorneys have a heightened duty to question clients about their decision to settle in mediation, attend all mediation sessions, and, if the circumstances are extreme enough — e.g., a lawyer’s concern about a client’s mental capacity — to object to settlement and withdraw from the case.
However, absent those “special circumstances”, the deeper meaning of Lerner, for general civil and family law attorneys and mediators, is this:
In the tension between a lawyer’s duty of zealous representation/advocacy, which protects people from their own ignorance, and a person’s stated good faith desire to proceed in partial or full ignorance, which could turn out to be a mistake, advocacy must yield to self-determination. Indeed, self-determination, according to the Court, trumps all other considerations, except for the best interests of children, fraud, duress, or similar supervening policy interests.
Importantly, in footnote 2 at page 220 of the opinion, the Lerner Court “suggested”, for the protection of attorneys and the public, that “any party’s consent to limit the scope of representation . . . should be fully disclosed to the trial court and, if the court requests it, the executed retainer agreement should be offered to the court for review.” (Emphasis added) I believe that in every case involving parties’ settlement, whether mediated or not, where the parties have expressly waived complete or partial information, legal counsel ordinarily and customarily should introduce the written and signed limiting language into evidence, and get the parties’ sworn acknowledgement of same into the record.
In cases involving stipulations of settlement or default proceedings based on submissions without testimony, the parties should be required, as a matter of good attorney practice, to execute certifications stating their voluntary waiver of partial or complete information, including previously signed retainer agreements or, in appropriate cases, revisions to such agreements. While the Appellate Division expressed a strong preference for “a single, specifically tailored form of retainer agreement,” 359 N.J. Super. at 220, the Court did not address the common reality that parties may change their minds midstream, after the initial “full information” retainer agreement has been executed. I do not believe the Court would be offended by, and in fact expect that it would specifically approve, a letter agreement duly signed by the client and the lawyer that modifies an earlier drafted retainer agreement, and operates much like a codicil to a Will.
A final word about “the road not taken”. In its amicus curiae brief, the New Jersey Association of Professional Mediators asked the Court to expressly articulate the expected standards of care by lawyers reviewing an agreement reached in mediation or otherwise, as follows:
- That attorneys have an obligation to understand available dispute resolution options and to inform their clients of them, consistent with R. 1:40-1, as amended.
- That attorneys have an obligation to ask their clients about their subjective satisfaction with the mediation process and the mediator.
- That attorneys have an obligation to inform clients of their inability to recommend a specific course of conduct, given the limited role the clients have asked them to perform.
- That attorneys have an obligation to point out and seek correction of any problems or defects that they could observe on the face of a draft settlement agreement.
- That attorneys have an obligation to support clients’ self-determined choices to negotiate their disputes, whether in mediation or otherwise.
- That attorneys have an obligation not to impose invasive litigation and discovery procedures on adult parties of sound mind who, after receiving advice concerning the possible consequences of their decisions, nevertheless request less intense and less expensive methods of dispute resolution.
While the Court limited its articulated standards of care for lawyers and did not accept the amicus curiae’s request for a fuller set of standards, nevertheless, I believe the foregoing principles are fully supported by the dispute resolution community nationally and in New Jersey. If the Uniform Mediation Act becomes the law in New Jersey (Assembly Bill 3542 is pending in the New Jersey Legislature, and is awaiting action by the General Assembly), it will fill in some of the public policy blanks. Until that time, however, and as a community of judges, lawyers, and mediators, we should consider these principles as “operational”, although not formally adopted by the Supreme Court, Appellate Division, or the Legislature.
WAIVER OF INFORMATION GATHERING, ANALYSIS, AND/OR EXCHANGE
Prepared by Hanan M. Isaacs, M.A., J.D., A.P.M.
YOU HAVE THE RIGHT TO REQUEST A LIMITATION ON THE SCOPE OF THE LAW FIRM’S REPRESENTATION. Specifically, you are permitted by law to direct the Law Firm to engage in either limited or no information gathering, analysis, and/or exchange with the other party (parties) to this dispute. If you choose to limit the Law Firm’s representation in this regard, and unless specifically stated otherwise below or in a later signed writing, the law firm will undertake no information gathering, analysis, and/or exchange. For example, the Law Firm will not prepare written questions for the other party (parties) to answer under oath, which are called “interrogatories”; will not take formal and sworn statements from the other party (parties), which are called “depositions”; will not issue Notices to Produce/Inspect/Copy Documents; will not seek formal appraisals of any assets or liabilities that are the subject of this dispute; will not retain experts to evaluate the issues in controversy and/or make recommendations within the scope of their expertise as to the resolution of those issues; and will not take any other steps, whether formal or informal, to gather, analyze, and/or exchange with the other party (parties) any other and similar types of information.
If you had not directed the Law Firm to limit the scope of representation regarding information gathering, analysis, and/or exchange, as stated above, the Law Firm ordinarily and customarily would have taken some or all of these steps in the course of representing you. By signing this limitation of representation section of the Retainer Agreement, you are confirming your understanding, that your decisions as to whether, when, and how to settle your case, and as to economic and other positions to be taken with respect to issues in the case, will be less than fully informed. You have made the decision to give up information gathering, analysis, and/or exchange with the other party (parties) freely and voluntarily, without coercion, undue pressure, or undue influence having been applied by anyone, including the Law Firm.
You specifically acknowledge to the Law Firm, and, if required, will later acknowledge to a Judge of Superior Court, that without such full information gathering, analysis, and/or exchange with the other party (parties), THE LAW FIRM IS NOT IN A POSITION TO ADVISE YOU WHETHER OR NOT ANY SETTLEMENTS REACHED IN THIS NEGOTIATION PROCESS ARE FAIR TO YOU OR IN YOUR OWN BEST INTERESTS.
You are willing to fully accept the risks of such information non-disclosure, which in fact could produce an agreement that is different from and qualitatively less beneficial to you than a Judge might have ordered in your case after a full hearing based on full information, or what the Law Firm could have negotiated on your behalf based on full information.
You specifically affirm that you have been advised of the risks you are taking, both known and unknown, in proceeding with negotiations upon less than full information. You also specifically affirm that your decision to so proceed was made in good faith and neither with the purpose or with the effect of defrauding a party (or parties) to this negotiation nor of defrauding the state or federal tax authorities.
You also affirm that you are over the age of 18 and of sound mind, and that your waiver of information gathering, analysis, and/or exchange with the other party (parties) will not jeopardize the best interests of your child(ren), and that no other known public policy interests will be adversely affected by such information waiver.
If, at any time, you decide to change your mind about engaging in information gathering, analysis, and/or exchange with the other party (parties), or if your circumstances should change, such that any of the foregoing representations made by you are no longer accurate, then you understand and agree that you are obligated to and will in fact so notify the Law Firm, promptly and in writing. You further understand and agree that the Law Firm is entitled to and does rely upon the accuracy of the foregoing representations, and of any future representations made by you on these important issues.
If there are any exceptions to the waiver of information gathering, analysis, and/or exchange with the other party (parties), as stated above, then all such exceptions as may exist are specifically set forth below, and nowhere else in this document or in any other document:
I SPECIFICALLY DIRECT THAT THE FOLLOWING LIMITED INFORMATION SHALL BE GATHERED, ANALYZED, AND/OR EXCHANGED IN THIS CASE, AS FOLLOWS [IF THIS SECTION IS FILLED OUT AT A DATE LATER THAN THE ORIGINAL DATE OF RETENTION AND EXECUTION, THEN THE MODIFYING DATE SHALL ALSO BE INSERTED AND INITIALLED BY THE CLIENT AND THE LAW FIRM]:
IMPORTANT NOTES: The foregoing information waiver should be specifically modified for use by general civil and family law attorneys for use in those fields and by general civil and family law mediators for use in their practices as well. When used in any retainer agreement, its text should NOT be contradicted by any “standard form” retainer language stating that the Law Firm/Mediator will undertake information gathering, analysis, and/or exchange steps, as such contradictory language will at least cloud if not void the effectiveness of the limited scope of representation/mediation.
If a client starts out declining all information, has a “midstream” change of mind, and then authorizes limited information gathering, analysis, and/or exchange, then the initial waiver form may still be used. However, if a party’s midstream change is in the direction of full information, then a separate letter between the party or parties and the professional will have to be drawn, specifically outlining the changes requested and that the previous document should be deemed superseded in whole or in part, as specified.
The foregoing principles are not to be construed as legal advice by the author.
BRIEF BIOGRAPHY OF HANAN M. ISAACS, M.A., J.D., A.P.M.
Hanan M. Isaacs is a mediator, arbitrator, and trial lawyer with offices in Kingston, New Jersey. An experienced commercial and personal injury arbitrator for the American Arbitration Association’s New Jersey Regional Office, Mr. Isaacs is also an Accredited Professional Mediator (“APM”) in general civil and divorce matters by the New Jersey Association of Professional Mediators (“NJAPM”). He serves as NJAPM’s Immediate Past President for the 2002-03 term. His law practice emphasizes employment litigation, business litigation, personal injury law, family law, and alternative dispute resolution in those fields.
Mr. Isaacs is a Past Chair of the 200-member Dispute Resolution Section of the New Jersey State Bar Association, serving from 1996 to 1998. He received that Section’s “ADR Practitioner of the Year Award” in 1999. He is an approved mediator under the Supreme Court’s statewide mediation program (General Civil, Chancery) and pilot programs on presumptive civil and economic divorce mediation, and served as a member of the Supreme Court’s Complementary Dispute Resolution Committee from 1995 until 1999.
Mr. Isaacs served as an Adjunct Professor in Rider University’s Law and Justice Program in the fall of 2002, taught at Seton Hall University Law School in 1998, and is a periodic guest lecturer at Rutgers – Camden Law School and the New Jersey Judicial College. He also trains mediators at the New Jersey Institute for Continuing Legal Education’s Civil and Divorce Mediation Training Programs.
Mr. Isaacs is a Master of the Marie L. Garibaldi American ADR Inn of Court, the nation’s only Inn of Court dedicated to Alternative Dispute Resolution, and also is a Master of the Mercer County American Inn of Court.
Mr. Isaacs received his J.D. from the University of North Carolina School of Law, with honors, in 1979; an M.A. in American Legal History from Rutgers University, also in 1979; and a B.A. from Rutgers College, with honors, in 1975.
For the past seven years, Mr. Isaacs has served as a consultant to the CPA and general business community as an ADR expert, and has trained CPA’s, human resources professionals, and other business community members in the art and craft of negotiation, mediation, arbitration, conflict resolution, dispute systems design, ethics, and practice building.