A pending settlement in a large lawsuit has made the news. The settlement would:
- Give the clients no money, and
- Give the attorneys millions of dollars in attorney's fees, guaranteed as a part of the settlement.
See James B. Stewart, "Common Sense" / Big Payoffs in HP Suit, For Lawyers" p. B1, col. 1 (New York Times Nat'l ed., "Business Day" Section, Saturday, August 23, 2014). You would think that these two things alone should make news. If you think that, you are wrong.
That clients receive little or no money and that their lawyers may receive lots of money for settling large cases is not new. These things have become commonplace in other large-case settlements such as settlements in product liability litigation, settlements in insurance bad faith lawsuits, and in settlements in lender force-placed insurance practices cases. Yet it seems that the settlements in these cases are not often reported and, even when they are reported, they are explained even less.
The one additional feature in the current settlement proposal on behalf of the plaintiff shareholders in their very large case against HP, is:
3. That the attorneys now representing the plaintiff shareholders will, by agreement with HP, become HP's attorneys.
"In return" for the settlement agreement in the shareholder litigation, ...
HP will pay the shareholders' lawyers an $18 million retainer and up to a total of $48 million in fees.
What will the shareholders get? They'll get no money. On the contrary, it's their money HP will be spending on the lawyer's fees. They'll get no personnel or board changes. They won't find out who's to blame or what went wrong. What they will get are some corporate governance reforms, which HP needn't disclose in any detail.
James B. Stewart, New York Times, supra.
On that last point, the secrecy of what the huge corporate defendant agrees to do as a part of the settlement, it is not news either. It is pretty common in large-case settlements to keep a lot of details about the settlement, and about the litigation for that matter, "confidential" by stipulated agreement which is regularly approved by the Courts.
On Monday, August 25, 2014, a Hearing will be held on a motion to intervene for the purpose of objecting to the proposed settlement, the linked newspaper article reports. In most cases, the Courts approve these stipulated settlements without changing them. It is worth following the results of tomorrow's Hearing, but whatever happens is probably not going to be "news".
© 2014 by Dennis J. Wall. All rights reserved. No claim to original U.S. Government works.
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