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Legal Article - Setting Aside a Settlement

Dimitry Tsimberg, Esq.

How to set aside an unauthorized settlement entered by the lawyer?

(or, how to blame your lawyer for a crappy deal)


If an attorney entered into a settlement, without the client's authorization, it is a serious matter and you should contact the State Bar (calbar.org in CA).

Absent express authority from the client, the attorney has no power to impair the client's "substantive rights." Thus, the attorney has no implied authority merely on the basis of employment, and cannot do the following without the client's consent:

-- settle or compromise the claim;
-- dismiss with prejudice;
-- stipulate to a matter which would eliminate an essential element of the claim or defense;
-- stipulate to entry of default judgment or summary judgment against the client;
-- stipulate that the judge can decide the case based on record made in a previous trial before a different judge;
-- stipulate to binding arbitration.

An attorney's unauthorized actions or stipulations do not affect the client's substantive rights and may be set aside at any time. However, even unauthorized acts may be binding upon a client who has ratified the attorney's acts (e.g. voluntarily participating in arbitration and orally agreeing that award would be "binding").

Was there really a binding settlement? A settlement on the record (in CA per CCP 664 et seq.,) may be binding. Otherwise, a written agreement signed by the plaintiff is usually required.

If there was a binding settlement (and there may not be), it can usually be set aside (in CA under CCP 473) for fraud, mistake and even undue influence and neglect of counsel. You must make this motion to the Judge of the case, but there are usually time limitations as to when this motion can be brought. The chances of success depend on how well you draft this motion and what evidence you can marshall. Consult a lawyer, because doing this yourself is going to be extremely difficult as a practical matter.

Remember, if the motion to set aside the settlement is granted, you are back to square one in the case and a new trial date will be scheduled.


This post is for educational and information purposes only. It is not legal advice on any particular case, and merely a general opinion of one California lawyer. You should not rely on it without consulting a competent attorney in your area about your specific case and facts. It is not intended to, and shall not, create an attorney-client relationship. So, be happy you got some free info and use your grey matter!


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