With all the news and emails that are inundating everyone about COVID-19, I thought I’d share something that has nothing to do with the coronavirus.
A couple of clients recently asked me what the difference is between a lawyer offering to settle a dispute and make it go away “for a price” and extortion. When multiple clients ask me the same question, that strongly suggests that the question is something others may be thinking about, so I thought I’d share the answer.
Extortion is a threat to “[d]isseminate any information tending to subject [another] person to hatred, contempt, or ridicule or to impair his credit or business repute.” That might sound a lot like threatening a lawsuit, but a threat of litigation, by itself, is not unlawful. No court has ever held that a demand to settle a claim before pursuing litigation amounts to extortion.
As a lawyer, I can write to someone and say “If you don’t pay Richard, he will sue you.” That’s not extortion. But if I were to write “If you don’t pay Richard, he will sue you and hold a press conference about how bad you are,” or just “If you don’t pay Richard, he will hold a press conference about how bad you are,” that’s extortion.
There’s nothing wrong with holding a press conference, presuming the statements one were to make at the press conference are true. What crosses the line is threatening to hold the press conference unless the other person does something you’re demanding.
Some people expect their lawyers to engage in extortion on their behalf. Some of those people just haven’t thought about the law, but others think that’s just what lawyers do. Unfortunately, there are some lawyers who do it. This is overstating it a bit, but I once heard someone say that “90% of the lawyers give the other 10% a bad name.”
A lot of the acting like a junkyard dog that some lawyers do is what I call expensive client entertainment. It may make the client feel good, but it often doesn’t serve the client’s interests, it costs the client money, and sometimes — if it crosses a line — it can put the client (and the lawyer) in legal jeopardy.