ARTICLE: The Enf of Confidential Settlements in Elder Abuse Cases?
By: Shari I. Weintraub, Esq.
Under the provisions of the newly enacted Code of Civil Procedure section 2031.1, settlement of statutory elder abuse claims can no longer be made confidential. This prohibition has existed since January 1, 2004, when the California Legislature proclaimed that as a matter of public policy, settlements of cases brought pursuant to the Elder Abuse and Dependent Adult Civil Protection Action (Welf. & Inst. Code § 15600 et seq., hereafter “EADACPA”) are prohibited from being made confidential.
Although under EADCPA, the actual amount of the settlement of a claim remains a protected fact, as do facts that do not otherwise amount to “abuse,” those protections afford little comfort to an innocent defendant who settles just to cut off the cost of continued protracted litigation. To minimize the potential risks of harm to reputation caused by an innocent defendant’s settlement of a baseless EADACPA abuse claim, steps need to be taken to absolve the settling person or facility from the stigma of the EADACPA claim. One approach to take is as a condition precedent of any settlement, the parties could agree to first dismiss the EADACPA abuse claim, on a “with prejudice” basis, and subsequently agree to settle the non-EADACPA claims for an agreed sum, subject to a confidentiality agreement. This approach would appear to meet the requirements of Section 2031.1, and also protect the otherwise innocent violator from the bad publicity of an otherwise undeserved EADACPA abuse claim.
Section 2031.1 provides that, “… confidential settlement agreements are disfavored in any civil action the factual foundation for which establishes a cause of action for a violation of the…[EADACPA].” Section 2031.1 further requires that where an elder abuse claim is made (e.g., the mere filing of a complaint), a confidential settlement agreement may not be recognized or enforced by the court absent a showing that (1) the information is privileged under existing law; (2) the information is not evidence of “abuse” as defined under the Welfare & Institutions Code sections 15610.30, 15610.57 and 15610.63; or (3) there is a demonstration by the party seeking to uphold the confidentiality agreement that a substantial probability of prejudice will result from disclosure and the party’s interest cannot be adequately protected through redaction. A defendant’s name in any information made available to the public may not be sealed or redacted. Specifically excepted from this rule is the non-disclosure of the amount of money paid in a settlement.
If a client’s otherwise sterling reputation has a chance of being preserved within ethical bounds, that goal should be the defense counsel’s objective. However, once a EADACPA abuse claim has been filed, even though “recklessness” is the minimum level of misconduct needed to impose liability, an innocent violator cannot settle the claim confidentially without violating Section 2031.1, and the fact that the case was settled becomes a matter of public record. As a result, a disgruntled elder with a questionable claim can impugn the reputation of a facility or an individual merely by filing suit. This scenario significantly increases the risks of a facility allowing a meritless claim to proceed to litigation, and unfairly prejudices the innocent operator of an elder care facility. The end result is that an unscrupulous elder abuse claimant now can force an elder care facility or professional to make a choice between (1) risking a sterling reputation or (2) settling an otherwise baseless claims before the matter proceeds to litigation, at which point a confidential settlement is not possible.
Proponents of Section 2031.1 in the legislature had argued that confidentiality agreements were being used to wrongfully protect the guilty facility’s reputation, and to prevent public access to information that shows which facilities abuse elders. Numerous shameful and egregious examples of abuse were cited to support this position. However, a complaint under the EADACPA does not even require verification. Thus, there is little incentive to an “elder abuse” claimant to refrain from filing a lawsuit under the EADACPA, even if the claim is questionable. There also are many reasons, other than fault, for a facility to settle an elder abuse claim, including the high costs of litigation, the risk that available insurance will not cover all the defense costs, and the risk of harm to the facility’s reputation. It would appear, therefore, that the only way to protect the reputation of an “innocent” client is to either take the case to trial and win, or to settle on a confidential basis along the lines set forth above.