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Tuesday, April 13, 2010

Secrecy in Settlements - Who Wants To Know? (and WHY?)

I recently saw an interesting example of human behaviour and confidential lawsuit settlements, something I’ve been interested in and have recently written about (which caused some interesting reactions at Prawfsfest in T-town last year). Recently, the Royal Canadian Mounted Police settled a lawsuit with the mother of a Polish man who was tasered and died in the Vancouver airport last year. The RCMP apologized and settled for an undisclosed sum. See the CBC article here.

The interesting part about the article are the comments by web commenters – a surprising number of them ‘demand’ that the dollar figure amount of the settlement be disclosed to the public. The most common reason cited for such disclosure is “the public’s right to know what’s going on with the public’s money.”

Now, as many of you on here know, I don’t really buy this argument, for a host of reasons (about which you can read in the upcoming “Keeping Settlements Secret,” (2010) FSU L. Rev. (forthcoming)). But what I’m curious to know is why the visceral reaction by the public about the amount? 

Do they REALLY want to know for reasons of civic accountability (i.e. do they think something is wrong with the settlement or with government lawyers)? Do they REALLY want to know for reasons of public transparency (do they think the public justice system requires transparency for some transcendental reason that they just choose not to articulate on a website blog)? Or do they just plain out want to know because they’re curious about what kind of money this grieving mother got so they can complain about it at the watercooler? Those are three very different reasons for me, and the third one is not one on which I’d base a decision on revealing secrecy.

For what it’s worth, I have difficulty understanding how, in some cases, the need/want of the public to ‘know’ the amount does more good than harm for the litigants. Is ‘the public” in a good position to evaluate a settlement? How does ‘the public’ evaluate settlements? Talk about information asymmetry! And then, what do they do with the information? What’s the ‘value?’ Thankfully, the large proportion of the ‘public’ are not lawyers and thus may not know what an appropriate range of a settlement is. They are not privy to the facts that led to it. Yet there sure is the desire to ‘want to know.’

Or, do people only want to know because they “can’t?” If it was public, would they ever really peer into a court file? What’s the redeeming value for the news consuming public?

There are a multitude of public spending situations about which the ‘public’ has no ability to ask ‘how much.’ That’s why we have some governmental discretion. But here, should the grieving mother be subject to public scrutiny about the ‘value’ of her settlement? If deemed ‘too high’ by the public, she’ll be ridiculed about how the government spent ‘the public’s’ money. Or make some conjecture (perhaps untrue) about the conduct of the police defendants in question. If deemed ‘too low’ by the public, she’ll be ridiculed about how little she received for such a tragedy. It’s lose, lose. So where’s the value?

In short, in private law, civil litigation settlements where parties themselves drive the litigation and determine when and how to settle, just because the dollars come from public coffers, does the public have a right ‘to know’ the amount even if it’s perhaps not helpful information but harmful to the parties if it gets out?

Posted by Erik Knutsen on April 13, 2010 at 01:58 PM in Erik Knutsen | Permalink


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You write as though the confidentiality provision was on the plaintiff's initiative, but in my experience it is the defendant that usually seeks a confidentiality provision. Surely they don't do this out of a desire to spare the plaintiff's feelings.

Posted by: brad | Apr 13, 2010 6:24:01 PM

The argument against disclosing settlements seems to prove too much. The same can be said for any sort of government transparency. 'The public' doesn't have any basis to judge the awarding of highway contracts or administrator salaries or anything else, generally, but they have a right to see the content of highway contracts and administrator salaries. There is an information asymmetry in all government transparency, but I am not sure that proves that government transparency as a whole is bad.

Furthermore, while 'the public' may not be competent to judge the settlement, the public also has intermediaries, such as the press, who has access to experts that may very well be competent to judge the settlement.

In short, I think your argument is against all governmental transparency, not just in settlements.

Posted by: Sean M. | Apr 13, 2010 9:24:02 PM

my thoughts on this are somewhat influenced by Ben Depoorter's work on Law in the Shadow of Bargaining. Knowing what the settlement value is helps create a shadow effect for future cases that might resolve subsequent litigation more quickly. Also, if there's reckless or malicious conduct, then, as you know, there are any number of public values that would be served by being able to hold the wrongdoers accountable before the public rather than simply thinking of this as a strictly private matter to be negotiated between private parties.

Posted by: Dan Markel | Apr 13, 2010 10:47:00 PM

I want to know about such things because it could reflect on the quality of the relevant public officials. I'm fine if my local police department pays a steady trickle of claims, comparable to any similar jurisdiction's pattern, because accidents happen, or bad apples do bad things and get fired, etc.

But if my police department is constantly paying big amounts for beating arrestees, and so on, I want to know. If it reflects bad training, bad hiring, or other bad management issues, I want to urge the mayor to fire the police chief, or vote against the mayor, or vote against the elected county sheriff, etc.

Beyond cops, I want to know if the mayor's or governor's office is paying a string of sex-harassment claimants, because the Governor or his chief of staff can't keep his hands to himself.

It's not just about wasting my tax dollars, it's about policing the behavior that leads to the claims to begin with. Coverups are far too attractive if you can succeed with the secrecy and if someone else pays the bills. If the Catholic Church had public records rules (by canon law or so), could things have happened as they did?

Posted by: taxpayer | Apr 14, 2010 1:40:45 PM

"Or do they just plain out want to know because they’re curious about what kind of money this grieving mother got so they can complain about it at the watercooler?"

However low one's opinion of the "tort reform" movement is (and mine is very low), this sort of specific political disapproval doesn't strike me as a good ground for making a general policy on the spending of public money.

Posted by: weserei | Apr 17, 2010 1:01:08 PM

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