Former Employees Say Insurer May Have Paid Their Lawyer $5 Million
Did a major insurer make a $5 million payment to a law firm representing former employees against the company?
That is the question that may soon finally be answered after more than five years of litigation between Prudential and some of the 359 employees who filed an earlier suit against the company in the late 1990s, reports the Newark, N.J., Star-Ledger.
The earlier litigation, contending that Prudential had pressured agents not to sell policies to minorities, settled confidentially in 2001 for $10.5 million. But soon afterward, when some former employees heard that Prudential may have paid $5 million to a New York law firm representing them on a contingency basis, new litigation erupted.
Since then, some of the original plaintiffs have been fighting another legal battle against their former law firm, seeking to discover records of any such dealings between the law firm and Prudential, the newspaper recounts. These plaintiffs now claim they were pressured into settling without knowing about the possible $5 million payment, which they describe as a breach of the duty of loyalty that the law firm owed to them, as its clients.
“If your attorney is colluding with the person you are suing, that’s a problem,” says Schubert Jacques, who worked as a Prudential agent from for nearly 13 years between 1988 and 2001. “I hope somebody pays attention to the fact that you can’t have this type of collusion.”
Both Prudential and the law firm have disputed the plaintiffs’ characterization of the way the settlement was handled.
Records of the confidential settlement had earlier been sealed by a court in Essex County, N.J., but a state appeals court reversed that decision in 2006. Since then, both sides have been reviewing the evidence. Today, amidst what is expected to be the first of three days of hearings over discovery to be conducted, attorneys for the law firm declined comment, the Star-Ledger reports.
