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Ethics: The lawyer as negotiator

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Cite as: (2008) 82(9) LIJ, p. 74

Are ethical principles malleable in the negotiation environment?

In my April 2007 column [“Justice before rules”, page 76] I discussed the role of candour in the context of negotiations on behalf of clients.

This was against the backdrop of the decision of Byrne J, sitting as the Queensland Legal Practice Tribunal, in Legal Services Commissioner v Mullins.1

In the first Australian disciplinary determination dealing with lawyers’ non-disclosure in the negotiation environment, readers may recall that the respondent barrister was found to have committed professional misconduct in electing not to disclose to the opposing client (an insurer), in the course of a mediation, that his client had recently been diagnosed with cancer, which in turn reduced the life expectancy estimate that factored heavily in calculating the value of the claim.

The process of negotiation, whether effected more formally through mediation or otherwise, by definition involves incomplete information.

It is in many ways the nature of the exercise for each protagonist to withhold relevant information from the other(s). Were negotiations conducted with complete candour and full disclosure of all relevant information, there would arguably be limited scope for negotiation in its commonly understood sense.

Yet in view of the thrust of my April 2007 column, it now appears clear that a lawyer’s attitude of incomplete candour within negotiation may, in certain circumstances, be unethical.

The question is to identify those circumstances. In the courtroom environment, the line is drawn at making false or misleading statements,2 which include half-truths that leave a misleading impression.3

Of course, in a court proceeding there is a neutral and independent arbiter (the judge), coupled with a formality within which evidence is elicited. It is likely that each of these characteristics will be absent from the preliminary process of negotiation. Their absence makes identifying false or misleading statements (or omissions) in negotiation more difficult than in the court process, and so it is legitimate to inquire as to whether the line so far as candour is concerned should be drawn in the same place as for court proceedings.

There are compelling reasons why a uniform standard of candour should apply, whether in court or in prior negotiations. If the duty to avoid making false or misleading statements (or creating a false or misleading impression by non-disclosure) is reflective of the ethical standard expected of lawyers, it is difficult to conclude that this standard ought to be diluted (or nullified) simply because the conduct or omission occurs outside the walls of the court.

False or misleading behaviour does not become the less unethical simply because of the environment in which it occurs. To maintain that behaviour that is blatantly unethical when before the court loses its ethical stigma outside it presents the lawyer as one whose ethical compass is easily swayed by ethical (or moral) relativity.

The absence of a neutral and independent arbiter in negotiations also dictates that a greater, not a lesser, level of trust is placed in the lawyer’s word than it is in court proceedings.

In view of the above, can a lawyer defend misleading conduct in negotiations by maintaining that the conduct would not have had a misleading effect had the opponent’s lawyer acted more diligently (or asked the right questions)?

The answer should be clear. Conduct that is unethical does not lose that quality simply because it was otherwise capable of being discovered. This is especially so where the lack of candour is deliberate, and thus pursued for opportunistic reasons, in the hope that it would not be discovered. This was the upshot of the determination of the Western Australian State Administrative Tribunal in Legal Practitioners Complaints Committee v Fleming,4 handed down two weeks after Mullins.

There the respondent lawyer, on his client’s instructions and in the course of negotiations with the client’s siblings, did not disclose the informality of a will in the course of obtaining a covenant from the siblings not to challenge the will. That the respondent fully expected the siblings’ solicitor to request a copy of the will did not, according to the Tribunal, in any way ameliorate the respondent’s unethical behaviour, especially as he was, on instructions, “the moving force . . . in the other side’s misconception”.5

The respondent was found to have engaged in unprofessional conduct, fined $7500, and ordered to pay costs.

There is value in lawyers adopting a uniform approach to false or misleading conduct in this regard. In court proceedings a client who insists that a lawyer present false or misleading evidence will be met with a blanket refusal, and indeed a refusal to act if the client presses the matter.

That all lawyers will (hopefully) respond in precisely the same manner dictates that the client cannot expect to find a more yielding lawyer to pursue the misleading charade. The same should be the case outside the courtroom. Were it otherwise, clients could “shop around” for lawyers willing to push (or indeed undermine) the ethical envelope in order to secure a desired outcome. This in turn hardly presents the profession and its ethics in a positive light.

There are, after all, few things more damaging to a claim to ethical status than widespread evidence of malleable ethical principle.

GINO DAL PONT is Professor, Faculty of Law, University of Tasmania.

1. [2006] LPT 012.

2. Kyle v Legal Practitioners Complaints Committee (1999) 21 WAR 56 at 60 per Ipp J, at 73 per Parker J. See also Professional Conduct and Practice Rules 2005 (Vic) r14.1.

3. Meek v Fleming [1961] 2 QB 366.

4. [2006] WASAT 352.

5. Note 4 above, at [66].


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