Explainer

Does a settlement mean you’re guilty?

This week, Richard Holbrooke negotiated an agreement where he’ll pay the Justice Department $5,000 to settle civil charges that he broke federal lobbying laws, but will admit no wrongdoing. There is something rather absurd about Holbrooke opening his wallet while refusing to admit that he’s done anything wrong. Is this common?

It is quite common. Many–perhaps half–of the civil disputes in America are resolved without anyone admitting to wrongdoing. No-fault settlements are attractive because they allow both sides to claim victory. The plaintiff wins money, the defendant can say he wasn’t convicted, and both sides save a bundle in legal fees. The right to say he wasn’t convicted is particularly important to Holbrooke since his U.N. ambassador nomination has been delayed in the Senate for eight months pending the resolution of these charges.

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Still, one wonders why the law tolerates these Alice-in-Wonderland agreements? One answer is that most civil suits involve a dispute between two private citizens. If Paula Jones and Bill Clinton–two parties to a rather well-known civil suit–both accept a $750,000 settlement with no admission of guilt, then why should the government raise a stink? The Holbrooke case is different, however, because the plaintiff is the Department of Justice. Why should a federal agency allow someone to, in essence, buy his way out of a court decision on guilt or innocence? The answer is that the government has an interest in encouraging settlements, since continued litigation consumes public and private resources.

Next question?

Explainer thanks Robert Luskin of Comey, Boyd, & Luskin in Washington D.C.

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