Divorce and other domestic proceedings, like virtually all civil actions, often end through settlements negotiated by the parties’ attorneys. When the clients are present, or when the negotiations occur via written exchanges approved by them, questions rarely arise concerning the attorneys’ authority to bind their clients. Yet, when attorneys negotiate oral terms of settlement outside the presence of the parties, the clients at times will deny their attorneys’ authority to settle the case on the agreed-upon terms and will refuse to proceed with the purported settlement. This article explores the requisites for enforcing oral settlements reached by attorneys on behalf of their clients.
Disputed oral settlements of attorneys typically occur at the courthouse, when the lawyers attend conferences, hearings, or trials. Often, such settlements are made during pretrial conferences in a judge’s chambers, outside the presence of the parties. Frequently as well, attorneys negotiate terms of settlement, without their clients, on the proverbial courthouse steps on the day of trial, or even on breaks during the trial itself. The lawyers then report to their clients the terms they have negotiated, as a fait accompli. In such circumstances, a party may bristle at compromises reached by her attorney without the client’s expressed prior consent. Can the objecting client prevent the other party from enforcing the attorneys’ settlement agreement though?
Under Georgia law, “[a]greements made by an attorney pertaining to his client’s cause of action are binding upon the client, absent fraud, collusion, or express prohibition of such an agreement.”(1) The parties must have vested their attorneys with the power to enter into such an agreement.(2) Additionally, to bind the parties, the terms of the agreement either must be in writing or otherwise established.(3) The attorneys may otherwise establish the oral agreement by subsequently announcing the terms of settlement on the record in open court or by exchanging confirming written communications.(4) Presumably, attorneys also could bind their clients by attesting to the oral agreement and its terms; however, if a party disputes the very existence of the settlement agreement, the agreement will be enforceable only if established by a writing.(5)
To prevent being saddled with an attorney’s unsatisfactory settlement, it seems prudent for a client, at the outset of a case, to discuss her litigation goals with her attorney and to delineate the scope of the attorney’s authority to engage in settlement discussions. The client may even want to forbid the attorney, in writing, from agreeing to any terms of settlement without the client’s expressed prior consent.
(1) White v. Owens, 172 Ga.App. 373, 374, 323 S.E.2d 167 (1984).
(2) Leary v. Julian, 225 Ga.App. 472, 474(1), 484 S.E.2d 75 (1997).
(3) O.C.G.A. § 15-19-5; and Tranakos v. Miller, 220 Ga.App. 829, 833(1), 470 S.E.2d 440 (1996).
(4) White, supra, 172 Ga.App. at 374; Tranakos, supra, 220 Ga.App. at 833(1).
(5) Tranakos, supra, 220 Ga.App. at 833(1).