Ethics in negotiation and mediation for the Florida attorney.

• Author: Murray, O. Russel

Lawyers face several sets of ethical obligations when engaged in negotiations on behalf of clients (1)--the obligation of competence, (2) the obligation to be truthful, (3) the obligation to be a zealous advocate, (4) the obligation to be fair, (5) and the obligation to keep the client informed, (6) among others. In a litigation setting, the lawyer may also have the obligation to inform the client of economic cost-saving methods of dispute resolution. (7) In mediation, (8) there are numerous potential ethical obligations. For the lawyer-advocate, mediation presents not only obligations to the client, but also to the other side and mediator. (9) The lawyer-mediator must consider the disclosure and confidentiality obligations (10) based on The Florida Bar ethics rules as well as the mediator rules of ethics and conduct.

The lines of ethical conduct for lawyers in negotiation and mediation are not always clear. The Rules Regulating The Florida Bar, Ch. 4: Florida Rules of Professional Conduct (FRPC), effective since 1986, were based upon the ABA Model Rules of Professional Conduct and subsequently amended to reflect much of the ABA's "2000 Rules," approved by the ABA House of Delegates in 2002. (11) In addressing ethical issues in negotiation and mediation, the authors draw not only from Florida's current Rules of Professional Conduct but also look for guidance from the ABA's 2000 Rules.

Ethical Obligations of Lawyers

* The Obligation of Competence

The first ethical obligation of counsel in representing clients, in all contexts, not just in negotiation and mediation, is Rule 4-1.1, which provides an obligation of competence. This rule is unchanged in the 2000 Rules. It reads in both versions:

Rule 4-1.1 Competence

A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.

Rule 4-1.1 is important to ethics in negotiation and mediation because the Florida Rules of Civil Procedure 1.700 provide that the presiding judge may enter an order referring all or any part of a contested civil matter to mediation or arbitration. In such matters, a lawyer cannot adequately represent the client in mediation or arbitration, without "the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation."

What is the level of competence envisioned in Rule 1.700? Is it community standard? If so, the level of lawyer competence in ADR may be quite low. The comment to the rule leaves lawyers to answer these questions for themselves, or to ask advice of other lawyers or nonlegal experts.

* The Obligation to be Truthful

FRPC 4-4.1, Truthfulness in Statements to Others, sets forth a lawyer's ethical obligation of truthfulness in negotiations, including truthfulness in a mediation session:

Rule 4-4.1 Truthfulness in Statements to Others

In the course of representing a client a lawyer shall not knowingly:

(a) make a false statement of material fact or law to a third person; or

(b) fail to disclose a material fact to a third person when disclosure is necessary to avoid assisting a criminal or fraudulent act by a client, unless disclosure is prohibited by Rule 4-1.6.

On its face, the language of FRPC 4-4.1 appears to be quite clear and unambiguous by requiring no lying or shading of the truth in negotiations. Indeed, the lawyer's obligation to be truthful in negotiating with opponents and counsel is on the same level as that applicable in court. The FRPC 4-3.3 reads:

Rule 4-3.3 Candor Toward the Tribunal

(a) A lawyer shall not knowingly:

(1) make a false statement of material fact or law to a tribunal;

(2) fail to disclose a material fact to a tribunal when disclosure is necessary to avoid assisting a criminal or fraudulent act by the client....

Similarity between FRPC 4-4.1 and FRPC 4-3.3 both require that in addressing a court or tribunal, a lawyer shall not lie about material facts, and in negotiations or mediations with an opposing party, the lawyer is held to the same level as if making representations to a court.

But the comment to FRPC 4-4.1 takes away what the rule seems to give. The official comment indicates that Rule 4-4.1 is not as absolute as it appears:

This [r]ule refers to statements of fact. Whether a particular statement should be regarded as one of fact can depend on the circumstances. Under generally accepted conventions in negotiation, certain types of statements ordinarily are not taken as statements of material fact. Estimates of price or value ... and a party's intentions as to an acceptable settlement of a claim are ordinarily in this category, and so is the existence of an undisclosed principal....

Misrepresentations or outright lies about value, your bottom line, and even whom you really represent in the negotiations may be acceptable.

Indeed, anything that falls under the umbrella of "accepted conventions in negotiation" maybe acceptable ethical conduct in negotiations. However, the parameters of accepted negotiation conventions are uncertain. Such conventions may be quite different in rural northwest Florida from those in Miami. They may also be different from one attorney to the next. Thus, the adage, "Caveat emptor, caveat venditor, and caveat negotiator--everyone may be lying and everyone should beware," (12) must be kept in mind throughout the negotiation process.

While Florida's Professional Ethics Committee does not always follow ABA ethics opinions, this conclusion is reflected in the ABA's Standing Committee on Ethics Formal Opinion 06-439, which expressed that a lawyer has greater leeway in misrepresenting a client's position in negotiations or in a mediation session than the lawyer has in addressing a tribunal. "It is not unusual in a negotiation for a party, directly or through counsel, to make a statement in the course of communicating its position that is less than entirely forthcoming." (13) And, "[a] party in negotiation also might exaggerate or emphasize strengths, and minimize or deemphasize weaknesses, of its factual or legal position." (14) But, "[a] deliberate misrepresentation or lie to a judge in pretrial negotiations would be improper...." (15) The opinion also clarifies that Rule 4.1 is applicable in mediation, rather than Rule 3.3, and that the Rule 8.4, Misconduct, standard is not more demanding of attorneys in negotiations than is Rule 4.1. (16)

* The Obligation to be a Zealous Advocate

"Zealous advocacy" is a hallmark of assertive and aggressive conduct by lawyers in advocating for a client in negotiations. Although the phrase, "represent a client zealously within the bounds of the law," (17) is no longer contained in the 2000 Rules, the catch phrase "zealous advocacy," remains in both the preamble and in some comments to both the 2000 Rules and the FRPC:

Preamble: A Lawyer's Responsibilities

As a representative of clients, a lawyer performs various functions. As advisor, a lawyer provides a client with an informed understanding of the client's legal rights and obligations and explains their practical implications. As advocate, a lawyer zealously asserts the client's position under the rules of the adversary system....

A lawyer's responsibilities as a representative of clients, an officer of the legal system and a public citizen are usually harmonious. Thus, when an opposing...