Might we trust our attorneys? Can a plaintiff be assured that the attorneys are not conspiring with defendants to "carve" up the settlement between them. Our system is based upon trust and loyalty, and a belief in the incentive of success. However…
It need not always be true. as an example, the Second Circuit reversed the dismissal of a major case against Leeds Morelli & Brown, finding "overriding and abiding conflicts of interest for LMB and thoroughly undermined its ability to "deal fairly, honestly, and with undivided loyalty to [appellants]" "The overriding nature of the conflict is underscored by the fact that, when fourteen of the 587 clients failed to agree,Nextel’s final, but pre-consultancy, payment to LMB was reduced from $2 million to $1,720,000, or $20,000 per non-agreeing client. " In Johnson v. Nextel Communications 1892-cv -09 we see:
"Once all the claims were processed, LMB would formally go to work for Nextel as a consultant for two years at $1 million per year. LMB also promised in the DRSA not to accept new clients with claims against Nextel, not to refer any such client to another lawyer or firm, and not to accept compensation for any prior referral.
It cannot be gainsaid that, viewed on its face alone, the DRSA created an enormous conflict of interest between LMB and its clients. Such a conflict is permissible only if waivable by a client through informed consent. See Int’l Bus. Machs, Corp. v. Levin, 579 F.2d 271, 282 (3d Cir. 1978); Filippi v. Elmont Union Free Sch. Dist. Bd. of Educ., 722 F. Supp. 2d 295, 310-11 (E.D.N.Y. 2010). However, there may be circumstances in which a conflict is not consentable. See GSI Commerce Solutions, Inc. v. BabyCenter, L.L.C., 618 F.3d 204, 212 n.2 (2d Cir. 2010); CenTra, Inc. v. Estrin, 538 F.3d 402, 412 (6th Cir. 2008); Cohen v. Strouch, No. 10 Civ. 7828, 2011 WL 1143067, at *2-3 (S.D.N.Y. Mar. 24, 2011). For two reasons, this is such a case."
"Therefore, LMB’s clear duty as counsel to the parties seeking relief from Nextel was to advise each client individually as to what was in his or her best interests taking into account all of the differing circumstances of each particular claim. See Ziegelheim v. Apollo, 128 N.J. 250, 260-61 (1992); Jones Lang Wootton USA v. LeBoeuf, Lamb, Greene & MacRae, 674 N.Y.S.2d 280, 284-85 (N.Y. App. Div., 1st Dep’t. 1998). The DRSA was flatly antagonistic to that duty.
On the face of the DRSA, its inevitable purpose was to create an irresistible incentive—millions of dollars in payments having no relation to services performed for, or recovery by, the claimants—for LMB to engage in an en masse solicitation of agreement to, and performance of, the DRSA’s terms from approximately 587 claimant clients. The effectiveness of the DRSA, and therefore the payments to LMB, depended on Nextel’s conclusion that a sufficient number of clients had agreed to it.3 Any number short of all 587, and Nextel would have no obligation to pay anything, as Amendment 2 demonstrated by reducing the final, pre-consultancy $2 million payment to LMB to $1,720,000, a reduction of $280,000, or $20,000 apiece for the fourteen clients LMB failed to deliver. By entering the DRSA, agreeing to be bound by its terms and accepting the financial incentives available therein, LMB violated its duty to advise and represent each client individually, giving due consideration to differing claims, differing strengths of those claims, and differing interests in one or more proper tribunals in which to assert those claims.4 See Elacqua, 860 N.Y.S.2d at 232-33; accord Matter of Educ. Law Ctr., Inc., 86 N.J. 124, 133 (1981).