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Edward M. Spiro and Christopher B. Harwood Edward M. Spiro and Christopher B. Harwood

Must all material representations made during a settlement conference be truthful? Can a lawyer be sanctioned for misrepresenting a material fact during a settlement conference? Southern District Magistrate Judge James L. Cott recently addressed these questions in Otto v. Hearst Communications, 2019 WL 1034116 (S.D.N.Y. Feb. 21, 2019). Although Judge Cott declined to impose sanctions, he characterized plaintiff’s counsel’s conduct as presenting “a close call.” If there had been clear evidence that (1) plaintiff’s counsel had, in fact, knowingly made a materially false statement at the settlement conference and (2) defendant had been prejudiced by the false statement (e.g., defendant had agreed to a settlement in reliance on the false statement), Judge Cott likely would have imposed sanctions.

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