Office of the General Counsel

• Publication year: 2013
• Pages: 0050
• Citation: Vol. 18 No. 6 Pg. 0050

Office of the General Counsel Vol. 18 No. 7 Pg. 50 Georgia Bar Journal April, 2013

MAKE ME AN OFFER

by Paula Frederick

BigCo would love to get this resolved,” you tell opposing counsel, “but the highest we can go is $10,000. It’s a fair offer, and you don’t want to try this one—juries in Tightwad County are notoriously stingy.”

“That’s just because they’ve never seen a plaintiff as sympathetic as my client! She’ll have them eating out of her hand,” opposing counsel predicts. “I tell you what—I’ll talk to her, but you know it’ll take $20,000 to fully compensate her.”

“We’re not prepared to go that high,” you counter as you and your associate pack up and leave the conference room. “Get back to me when you hear from your client.”

Your associate trots to keep up as you head for the car. “Didn’t BigCo authorize us to offer up to 20?” she asks.

“Yep,” you respond.

“So that was all a big lie?” your associate wonders.

“No!” you exclaim, shocked and indignant. “That’s just negotiating! Everybody does it!”

Really? How much creative license may a lawyer take during negotiations?

Obviously Bar Rules prohibit a lawyer from engaging in dishonest conduct. On the other hand, negotiation is a process that involves give and take. It would not work if each party confessed its bottom line and stood firm.

The Rules of Professional Conduct try to strike a balance between the need to recognize the nature of negotiation while not sanctioning less-than-honest conduct. Rule 4.1 distinguishes posturing in negotiation from “false statements of material fact,” which are prohibited under the rule. Comment 2 provides that “under generally accepted conventions in negotiation, certain types of statements ordinarily are not taken as statements of material fact.” It further states “. . . a party’s intentions as to an acceptable settlement of a claim are in this category ....”

So—an estimate of what the client might accept by way of settlement is not a statement of material fact. On the other hand, disciplinary case law makes it clear that a lawyer may not negotiate and settle a case without revealing that her client has died or misrepresent the amount of insurance coverage available. (See cases cited in ABA Formal Opinion 06-439.)

And while the...