Wondering why your lawyer would convey a debtor’s low offer? Doesn’t your debt collection lawyer have your best interests in mind?
There are times when an offer is downright insulting. I hate to relay low-ball offers. In a recent case, I shared an offer with my client that was so low that they asked if I was working for the other side. Knowing the offer was paltry, why did I share it?
The reason is that I’m ethically obligated to do so. I cannot take it upon myself to decide which offers my client should or should not hear.
Rest assured that your lawyer’s conveyance of the defendant’s offer is appropriate, even if the offer is less than desirable.
The New York Rules of Professional Conduct requires attorneys to keep their clients informed of all matters related to their case.
While the rules don’t specifically address the timing and manner of conveying settlement offers, it’s clear that offers should be promptly relayed. Any offer, however modest, could influence the client’s decision to continue the case. This is true for both creditors and debtors.
When a Low Offer Can Be Advantageous
We sued and obtained a default judgment for a client. The judgment was small, less than $5,000. The debtor offered to settle for half. The client declined.
Later, the defendant retained an attorney and gave notice of their intent to file a motion to vacate the default judgment. The defendant’s move to engage counsel and challenge the judgment caused our client to reevaluate the earlier offer. When I advised my client of the debtor’s intent, they agreed to take the initial offer if it was still on the table.
The case should have been resolved at that point, with the defendant’s attorney relaying our client’s willingness to settle. But it didn’t. The attorney may have been more focused on filing the motion than discussing our client’s position. They didn’t relay our client’s position until after incurring several hours of billable time. Only then did the case settle for the same original offer of 50%.
Had the attorney shared our client’s position earlier, the defendant might have saved themselves from additional legal fees.
It’s crucial for parties and their attorneys to keep the lines of communication open. An offer that once seemed unacceptable may become appealing at a later stage.
Have questions about debt collection? Contact Frank, Frank, Goldstein and Nager by email or call +1 (212) 686-0100. We have the experience that pays.
