With respect to compromise or settlement of a claim, final decision-maMng authority rests with the client. Kentucky Rules of Professional Conduct provide that “[a] lawyer shall abide by a client’s decision whether to accept an offer of settlement of a matter” (SCR 3.130-1.2(a)) and the rules require a lawyer to “explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation” (SCR 3.130-1.4(b)). Without authority from the client, a lawyer has no right to settle a case. 7 Am.Jur.2d Attorneys at Law § 154 (1980).
However, an attorney is an agent for the client with broad power to act for and on the client’s behalf. This principle was articulated in Daugherty v. Runner, Ky.App., 581 S.W.2d 12 (1978), as follows:
The relationship is generally that of principal and agent; however, the attorney is vested with powers superior to those of any ordinary agent because of the attorney’s quasi-judicial status as an officer of the court; thus the attorney is responsible for the administration of justice in the public interest, a higher duty than any ordinary agent owes his principal. Since the relationship of attorney-client is one fiduciary in nature, the attorney has the duty to exercise in all his relationships with this client-principal the most scrupulous honor, good faith and fidelity to his client’s interest.
Id. at 16.
In view of the “superior” agency status of an attorney, and with due regard for the doctrine of apparent authority as explained in Estell v. Barrickman, Ky.App. 571 S.W.2d 650, 652 (1978), we must determine, notwithstanding the client’s ultimate right to decide, whether an attorney may nevertheless bind a client to the settlement of a case. If we answer in the affirmative, the client’s remedy, if a wrong has been committed, will be a civil action for damages against the attorney, and an attorney engaging in such unauthorized conduct might be subject to disciplinary action. If we answer in the negative, the power of an attorney to act on behalf of the client will be circumscribed and those with whom the attorney must deal may legitimately question whether the attorney possesses the necessary authority.
Appellant brought this action for personal injury damages. While litigation was pending, appellant’s counsel1 submitted a written settlement offer to counsel for appellees offering to accept the sum of $26,000. Appel-lees submitted a counteroffer of $23,000 and it was accepted by counsel for appellant. A short while later, final settlement documents and the agreed-upon sum of money were forwarded to appellant’s counsel. Thereafter, the settlement documents were returned unexecuted and appellant’s counsel informed appellees that the settlement was off. Appellees then moved to enforce the settlement agreement. See General Motors Corp. v. Herald, Ky., 833 S.W.2d 804 (1992).
The trial court held a hearing to determine whether a binding settlement agreement had come into existence. After hearing the parties’ evidence and making findings of fact and conclusions of law, the trial court held that a settlement had been achieved. The trial court deemed it unnecessary to make particularized findings as to the actual authority counsel had from the client. It reasoned that the doctrine of apparent authority gave ap*576pellant’s counsel power to bind her so that an enforceable agreement came into existence. The Court of Appeals affirmed the trial court, also relying upon apparent authority.
Although we agree that an attorney must have authority from his client to settle his client’s claim, [appellant’s counsel] was cloaked, in his dealings with third parties, with apparent authority to settle Ms. Clark’s personal injury claim.
Slip op. at 2-3.
As we analyze the case, the proper inquiry is whether the peculiar agency relationship between attorney and client is sufficiently comprehensive with respect to third parties to overcome the fundamental right of the client to ultimately decide upon the settlement. An important consideration is the extent to which those dealing with an attorney in such circumstances may be harmed by unauthorized offers or acceptances of settlement. If it should be determined that third parties who may be dealing with such attorneys would be substantially and adversely affected by unauthorized attorney settlements, then the client employing the attorney should be bound. On the other hand, if it is determined that no substantial harm will befall third parties, then ultimate control should remain with the client, notwithstanding purported settlements by an attorney. The foregoing is consistent with the general law of agency which allocates loss to the party who invested the agent with authority to initiate the transaction.
The technical distinctions between implied, apparent and ostensible authority are immaterial where an innocent third party dealt with the agent as such and would suffer loss were the principal allowed to escape from the consequences of agency or of the situation which he caused or permitted.
The law of estoppel steps in to prevent the escape from liability, for by his action or conduct — affirmative or negative — he induced or permitted the third person to put his trust in the agent’s representations.
American Nat. Red Cross v. Brandeis Mach. & Supply Co., 286 Ky. 665, 151 S.W.2d 445, 451 (1941) (citation omitted).
While attorneys have been held to be superior agents (Daugherty v. Runner, Ky.App., 581 S.W.2d 12, 16 (1978)), a firm line of authority holds that with respect to settlement, attorneys are without power to bind their clients. DeLong v. Owsley’s Ex’x, 308 Ky. 128, 213 S.W.2d 806 (1948); Fillhardt v. Schmidt, 291 Ky. 668, 165 S.W.2d 155 (1942); Shropshire v. Shropshire, 282 Ky. 211, 138 S.W.2d 340 (1940); Jenkins v. City of Bowling Green, 261 Ky. 679, 88 S.W.2d 692 (1935); Brown v. Bunger, Ky., 43 S.W. 714 (1897). See also 7 Am.Jur.2d Attorneys at Law § 156 (1980), (which discloses that Kentucky case law is consistent with the general rule). These eases contain little reasoning to justify the rule stated, suggesting that the rendering courts regarded the rule as so manifest to be without any need for exposition. While the reasons for the rule are not persuasively expounded and fail to take account of the potential effect upon third parties, and while it would be possible to distinguish these cases from the case at bar, the fact remains that the rule is broad and unambiguous. As succinctly stated in Fillhardt:
The rule is almost universal that an attorney, clothed with no other authority than that arising from his relationship, has no implied power to compromise and settle a client’s claim or cause of action except, perhaps, when he is confronted with an emergency and prompt action is necessary to protect the interest of his client without an opportunity for consultation with him.
165 S.W.2d at 160. When this rule is considered alongside disciplinary rules SCR 3.130-1.2(a) and SCR 3.130-1.4(b), we are bound to conclude that in ordinary circumstances, express client authority is required. Without such authority, no enforceable settlement agreement may come into existence. Our recent decision in Farmers Deposit Bank v. Ripato, Ky., 760 S.W.2d 396 (1988), is not to the contrary for it was premised on the active participation by the represented parties in the negotiations. We noted that the attorney was not discharged until after the compromise had been reached and that the settlement took place under the clients’ watchful eyes. Active participation in the *577particulars of settlement may be deemed to create implied authority. See also Combs’ Adm’r v. Virginia Iron, Coal & Coke Co., 236 Ky. 524, 33 S.W.2d 649, 651 (1930), (holding that an unauthorized settlement may be ratified by the client, even by the client’s silence; “It is the client’s duty, having knowledge of the settlement, to express his disapproval within a reasonable time”).
Notwithstanding the foregoing, we can conceive of circumstances in which the rights of third parties might be substantially and adversely affected by an attorney possessing apparent authority but who lacked actual authority. If such a contention were made, a court of equity would be empowered to fix responsibility where it belonged to prevent injustice. In most circumstances, however, express authority will be required and in the event of a dispute as to whether the client has given settlement authority, the trial court shall summarily decide the facts. In such a proceeding, the attorney-client privilege would not prevent the attorney from testifying as to the client’s instructions regarding settlement. SCR 3.130-1.6(b).
In this opinion we have gone to considerable lengths to fully preserve the rights of the client to control the settlement or termination of litigation. At some point, however, the client must be charged with responsibility for having employed an attorney who failed to observe the requirements of fidelity to the client’s wishes. That point, we believe, is when the rights of innocent third parties are adversely affected. It will be necessary to remand the case at bar to the trial court for reconsideration of the prior hearing record and for an additional hearing, if needed. The trial court must determine whether appellant gave her attorney express or actual authority to settle the case for $23,000. If the court finds that such authority was given, the settlement should be enforced. Even if the trial court finds that no such authority was given, if it should also find that appellees were substantially and adversely affected by their reliance upon the purported settlement, enforcement would be appropriate. On failure to find one or the other of the circumstances set forth herein-above, the court should determine that no settlement came into existence.
We are not unconcerned with the possibility that this decision will alter an essential component of the administration of justice, the settlement of civil lawsuits. We have considered the argument that lawyers must be able to have complete trust in the representations of other lawyers with respect to settlement. We understand that one who is unscrupulous might attempt to gain a negotiating advantage by making, but later disavowing, a settlement offer or acceptance. We are comforted, however, in the knowledge that the vast majority of all Kentucky lawyers are entirely ethical. Regardless of what we say here, those lawyers would not think of settling a case without express client authority and certainly would not attempt to gain an advantage by unscrupulous negotiating tactics. Practicing lawyers (and judges) soon learn who among their colleagues lack trustworthiness and deal with them accordingly. In all but the rarest of circumstances, the settlement practices which have heretofore prevailed will continue.
The opinion of the Court of Appeals is reversed and this cause is remanded to the Hardin Circuit Court for further consistent proceedings.
STEPHENS, C.J., and GRAVES, STUMBO and WINTERSHEIMER, JJ., concur. KING, J., dissents by separate opinion.. Appellant’s counsel in this Court is her third lawyer in this case. Present counsel did not participate in the negotiations at issue here.