Ramirez

This appeal presents an issue which appears to be of first impression in California: the conflict of interest, or potential conflict of interest, occurring between a client and an attorney negotiating attorney fees as part of a settlement of the client’s case. We hold that where, as here, there is evidence that a conflict of interest arose between attorney and client which may have affected the ultimate settlement of the case, the settlement negotiations and settlement should be examined by an impartial tribunal to determine if the client’s interests have been forcefully represented. In conducting that review we place the burden of proof on the attorney to demonstrate that the attorney’s own pecuniary interest did not interfere with the duty to promote the best interests of the client. Finding that neither the settlement court nor the trial court specifically conducted such a review, we remand the matter to the superior court for further proceedings.

Facts

Ramirez was fired by her employer, Del Monte Corporation. She hired Attorney James C. Sturdevant et al. (Sturdevant) to represent her before the labor commission. Sturdevant, working on an hourly fees and costs basis,…