Proposed rule will require parties in vehicle injury settlements to preserve accident vehicles if destroying them would hurt other cases

The Board of Professional Responsibility of the Tennessee Supreme Court was requested to issue a Formal Ethics Opinion regarding the ethical propriety of a settlement agreement in a products liability case which contains as a material condition of the settlement that the subject vehicle alleged to be defective be destroyed. In response, the Board has issued a new ethics opinion seeking to change the requirements for preserving evidence in product liability lawsuits that result in settlements, making it illegal for the parties thereto to agree to destroy evidence in some instances. The formal ethics opinion reads “[i]t is improper for an attorney to propose or accept a provision in a settlement agreement, in a products liability case, that requires destruction of the subject vehicle alleged to be defective if that action will restrict the attorney’s representation of other clients.”

The Board based its analysis, in part, on the American Bar Association’s interpretation of the Model Rules of Professional Conduct, which have been adopted to govern lawyer ethics in most states.

Lieff Cabraser Nashville Managing Partner Mark Chalos was among the members of the public who presented written comments on both sides of the issue on the rule to the Board, noting that including these kinds of provisions in settlement agreements could significantly reduce the secrecy that some manufacturers have been able to create around defective products, secrecy that then harms future plaintiffs in their attempts to secure justice in new injury cases that relate to the same vehicles.

In his submission, Chalos supports the Board’s new stance, based on his deep familiarity with product liability cases and the importance of physical evidence and related information being shared appropriately, particularly when public safety is at stake. He goes on to explain how “the concern about concealing dangers from the public is not merely speculative..” and that “when settling litigation, defendants – often large corporate manufacturers – or their insurers frequently insist that the settlement and all facts surrounding it remain secret.” Chalos provides numerous examples from recent history of litigation settlements that allowed defendants to conceal dangerous products that continued to pose safety risks to the public, including:

  • Takata’s exploding vehicle airbags – Twenty-four deaths worldwide and hundreds of serious injuries have been linked to exploding airbags that were in tens of millions of vehicles. It appears that Takata and automakers privately settled early wrongful death lawsuits regarding the airbags before the airbags were recalled, despite Takata knowing about the defect in their airbags since 2000. In February 2017, Takata pleaded guilty to fraud for covering up the defects.
  • GM ignition switch defect – Deaths of at least 124 people have been linked to allegedly defective ignition switches in more than 30 million GM vehicles worldwide. GM secretly settled its first wrongful death suit that related to the alleged ignition switch defect in 2005, nine years before a safety recall was finally initiated.
  • Goodyear G159 RV Tires – Deaths of at least 89 people in recreational vehicle (RV) wrecks have been linked to allegedly defective Goodyear tires. Goodyear apparently knew about an alleged defect in its tires since 2002 and privately settled cases many years before the federal regulators launched a safety investigation in 2018.

“These tragedies are, unfortunately, only representative examples of the type of harm that could result from excessive secrecy in litigation settlements.” Chalos notes.

After reviewing all public comment, the Tennessee Board of Professional Responsibility will issue its final opinion on the matter.

About Mark P. Chalos

The managing partner of Lieff Cabraser’s Nashville office, Mark Chalos represents individuals who have suffered catastrophic personal injuries and families whose loved ones died due to the negligence or misconduct of others. Mark represents counties and cities across the U.S. as well as Native American tribes and health organizations in the national opioids litigation. He is serving as part of the national case leadership in these cases, including preparing bellwether cases for trial.

Through jury trials, Chalos has held wrong-doers accountable, including representing 32 school children who were videotaped undressing in their school locker room ($1.28 million jury verdict) and a young woman who suffered a severe brain injury in a car wreck (nearly $4 million jury verdict). He also obtained an $8 million arbitration award on behalf of a business client, and overall has obtained millions of dollars in settlements for families who have been harmed by wrongful conduct.

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