---
title: "Explain the fee consequences before the client decides whether to settle"
url: "https://ailawframework.com/obligations/costs-billing-and-litigation-funding/disclose-the-costs-estimates-before-a-settlement-is-executed/united-states"
type: "task_jurisdiction_version"
site: "AI Law Framework"
id: "A42-PE20261022-23-US"
practice_area: "Costs, billing & litigation funding"
tier: "yellow"
lawyer_review: "required"
jurisdictions: ["US"]
last_reviewed: "2026-10-22"
---

# Explain the fee consequences before the client decides whether to settle

> List the fee and expense figures already communicated, and what the file does not show about the cost of settling or of continuing. Do not draft the settlement.

Canonical page: https://ailawframework.com/obligations/costs-billing-and-litigation-funding/disclose-the-costs-estimates-before-a-settlement-is-executed/united-states  
Last reviewed: 2026-10-22

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

| Fact | Value |
| --- | --- |
| Practice area | [Costs, billing & litigation funding](https://ailawframework.com/obligations/costs-billing-and-litigation-funding.md) |
| Human involvement | Yellow: Lawyer and AI draft together |
| How AI is used | List the fee and expense figures already communicated, and what the file does not show about the cost of settling or of continuing. Do not draft the settlement. |
| What the lawyer must review | You decide what the client must be told before deciding whether to settle. Rule 1.2(a) says a lawyer shall abide by a client's decision whether to settle a matter and, as required by Rule 1.4, shall consult with the client as to the means by which the client's objectives are to be pursued. Rule 1.4(b) requires an explanation to the extent reasonably necessary to permit the client to make informed decisions regarding the representation. Rule 1.4(a)(2) requires the lawyer to reasonably consult with the client about the means. Rule 1.5(b) requires the basis or rate of the fee and expenses to be communicated, and any change in that basis or rate or in the expenses to be communicated as well. These pages do not require two named costs estimates before a settlement is signed. The tool does not recommend whether to settle and does not draft the agreement. An aggregate settlement of the claims of or against two or more clients is a different rule: Rule 1.8(g) requires each client's informed consent in a writing signed by the client, after disclosure of the existence and nature of all the claims or pleas and of the participation of each person. Do not apply Rule 1.8(g) unless that is the matter. |
| Written for | United States |
| Applies to | [Disclose the costs estimates before a settlement is executed](https://ailawframework.com/obligations/costs-billing-and-litigation-funding/disclose-the-costs-estimates-before-a-settlement-is-executed.md) |

## Checking plan

- What the AI does: List the fee and expense figures already communicated, and what the file does not show about the cost of settling or of continuing. Do not draft the settlement.
- Basis: Checked against the linked sources on 22 October 2026. Confirm the current instrument before reliance.

## Notes

- The decision whether to settle is the client's. The tool does not make it.
- Rule 1.8(g) applies to an aggregate settlement of two or more clients. It is not the rule for a single client's settlement.

## Sources

- [ABA Model Rule 1.2, Scope of Representation and Allocation of Authority](https://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_1_2_scope_of_representation_allocation_of_authority_between_client_lawyer/) (checked 2026-10-22)
- [ABA Model Rule 1.4, Communications](https://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_1_4_communications/) (checked 2026-10-22)
- [ABA Model Rule 1.8, Current Clients: Specific Rules](https://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_1_8_current_clients_specific_rules/) (checked 2026-10-22)

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*