Transcript Out of the In

Ethical Issues in
Negotiation, ADR, and
Litigation
Don Yenovkian*
Director, Acquisition ADR Program
Office of the Army General Counsel
8 November 2012
*With Appreciation to Sarah Stanton (AF OGC) & Karen
White (USAF), whose presentation during the AF NADRC in
2011 served as a baseline for this presentation.
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The Dispute Resolution Spectrum
NEGOTIATION
Unassisted
Negotiations
Traditional
Settlement
Negotiations
ALTERNATIVE DISPUTE RESOLUTION
Process
Assistance
Conciliation
LITIGATION
Public
Litigation
Outcome Prediction
Early Neutral
Evaluation
Binding
Arbitration
Administrative
Boards (ASBCA)
Fact-Finding
Summary Trial
with Binding
Decision
Judicial Forums
(Federal Courts)
Facilitation
Mediation
Ombuds
Mini-Trials
Judge
Non-Binding Processes
Non-binding
Arbitration
Settlement
Binding Processes
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Overview
 The Big Three
 Competence
 Candor
 Conflicts of Interest
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Competence
• Model Rule of Professional Conduct (“Rule”)
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.
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Competence - Scenario 1
You are the attorney advisor. Your contracting
officer (KO) brings you a certified claim from a
contractor named Banner Gamma Rays (BGR).
You know BGR – they usually act pro se – In
your opinion, BGR President Bruce Banner is a
bit volatile, and is a “frequent filer” – but BGR
usually does pretty good work and their
arguments are often correct.
Are you obligated by ethical rules to tell the KO
about ADR methods that are available to handle
this case?
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Competence
• Rule 1.2 Scope Of Representation And Allocation Of
Authority Between Client And Lawyer: (a) … a lawyer
shall abide by a client's decisions concerning the
objectives of representation and, as required by Rule
1.4, shall consult with the client as to the means by
which they are to be pursued. A lawyer may take
such action on behalf of the client as is impliedly
authorized to carry out the representation. A lawyer
shall abide by a client's decision whether to settle a
matter. …
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Competence
• Rule 1.4. Communication: A lawyer shall (a)(2) …
reasonably consult with the client about the means
by which the client's objectives are to be
accomplished; (3) keep the client reasonably informed
about the status of the matter; (4) promptly comply with
reasonable requests for information; … (b) explain a
matter to the extent reasonably necessary to permit the
client to make informed decisions regarding the
representation.
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Competence
• Rule 2.1 Advisor: In representing a client, a
lawyer shall exercise independent professional
judgment and render candid advice. In rendering
advice, a lawyer may refer not only to law but to
other considerations such as moral, economic,
social and political factors, that may be relevant to
the client's situation.
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Candor - to Others
Rule 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.
Rule 4.2. Communication with Person Represented by
Counsel: In representing a client, a lawyer shall not
communicate about the subject of the representation
with a person the lawyer knows to be represented by
another lawyer in the matter, unless the lawyer has
the consent of the other lawyer or is authorized to do
so by law or a court order.
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Candor – Scenario 2
You speaking with Bruce, the BGR President, in
an effort to settle the issues raised in BGR’s
$100K claim. You don’t like Bruce when he
gets angry, so you are using your active listening
skills. Bruce asks whether the Army would pay
$50K to settle the claim. The KO has told you
he would not settle it for more than $51K.
What can you tell Bruce?
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ABA Formal Opinion 06-439.
• A Lawyer’s Obligation of Truthfulness When
Representing a Client in Negotiation (Application to
Caucused Mediation)
• Under Model Rule 4.1, in the context of a negotiation,
including a caucused mediation, a lawyer representing a
client may not make a false statement of material fact to a
third person. However, statements regarding a party’s
negotiating goals or its willingness to compromise, as well
as statements that can fairly be characterized as
negotiation “puffing” , are ordinarily are not considered
‘‘false” statements of material fact.”
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Candor – Scenario 3
• Bruce tells you that he has documents that
will prove his case. The KO lost most of the
documents associated with case during a
trailer flood. During negotiations, can you tell
Bruce that the Government will be
submitting documentary evidence in support
of its defenses if you don’t yet know where
the documents are? What can you say?
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Candor – Scenario 4
• During negotiations, Bruce says he
trusts you, that he feels comfortable
talking with you, and that you are the
only one who listens to him.
• He asks your opinion on what a “fair
settlement” would be. Your goal is to
settle at $25K, but the KO has given
you approval to agree in principle to
settle for $50. What should you tell
him?
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Candor – Unrepresented Person
Rule 4.3. Dealing with Unrepresented Person: In
dealing on behalf of a client with a person who is not
represented by counsel, a lawyer shall not state or
imply that the lawyer is disinterested. When the lawyer
knows or reasonably should know that the
unrepresented person misunderstands the lawyer's role
in the matter, the lawyer shall make reasonable efforts
to correct the misunderstanding. …
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Candor
Rule 4.4. Respect for Rights of Third Persons:
In representing a client, a lawyer shall not use
means that have no substantial purpose other
than to embarrass, delay, or burden a third
person, or use methods of obtaining evidence
that violate the legal rights of such a person.
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Candor to Tribunal – Scenario 5
Bruce got angry, tore the place up, and stormed
out. Later, he apologized for his behavior, hired
a lawyer, and BGR appealed the KO’s final
decision to the ASBCA.
You have been offering $26K to the opposing
lawyer, but the KO has authority to settle for
$55K.
During a pre-trial conference with the attorneys,
the COFC or ASBCA judge asks you what the
limits of your settlement authority are. What
should you say?
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Candor - to the Tribunal as Advocate
Rule 3.3. Candor Toward the Tribunal:
(a) A lawyer shall not knowingly:
(1) make a false statement of fact or law to a tribunal …;
(2) fail to disclose to the tribunal legal authority in the controlling
jurisdiction known to the lawyer to be directly adverse to the
position of the client and not disclosed by opposing counsel; or
(3) offer evidence that the lawyer knows to be false. … A lawyer may
refuse to offer evidence, other than the testimony of a defendant
in a criminal matter, that the lawyer reasonably believes is false.
Rule 1.0(m) (Summary): A Tribunal is a court, arbitrator in binding
arbitration or other body acting in an adjudicative capacity.
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ABA Formal Opinion 93-370
• A lawyer may in some circumstances ethically
decline to answer a judge’s questions
concerning the limits of the lawyer’s
settlement authority in a civil matter; the
lawyer is not justified in lying or engaging in
misrepresentations in response to such an
inquiry.
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ABA Formal Opinion 93-370, Cont’d
• While a certain amount of posturing or puffery in settlement
negotiations may be an acceptable convention between
opposing counsel, a party’s actual bottom line or the
settlement authority given to a lawyer is a material fact. A
deliberate misrepresentation or lie to a judge in pretrial
negotiations would be improper under Rule 4.1.
• Model Rule 8.4(c) also prohibits a lawyer from engaging in
conduct involving dishonesty, fraud, deceit, or
misrepresentation, and Rule 3.3 provides that a lawyer shall
not knowingly make a false statement of material fact or law
to a tribunal. The proper response by a lawyer to improper
questions from a judge is to decline to answer, not to lie or
misrepresent.
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Candor - to the Tribunal as Advocate
Rule 3.4. Fairness to Opposing Party and Counsel: A lawyer
shall not: (a) unlawfully obstruct another party’s access
to evidence or unlawfully alter, destroy or conceal a
document or other material having potential evidentiary
value. A lawyer shall not counsel or assist another
person to do any such act; (b) falsify evidence, counsel or
assist a witness to testify falsely, or offer an inducement
to a witness that is prohibited by law; (c) knowingly
disobey an obligation under the rules of a tribunal,
except for an open refusal based on an assertion that no
valid obligation exists;…
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Candor - to the Tribunal as Advocate
Rule 3.5. Impartiality and Decorum of the Tribunal:
A lawyer shall not:
(a) seek to influence a judge … or other official
by means prohibited by law; (b) communicate ex
parte with such a person during the proceeding
except as permitted by law or court order; or (c)
engage in conduct intended to disrupt a tribunal.
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Candor - to the Tribunal as Advocate
Rule 3.9. Advocate in Nonadjudicative
Proceeding: A lawyer representing a client
before a legislative or administrative tribunal in
a nonadjudicative proceeding shall disclose that
the appearance is in a representative capacity
and shall conform to the provisions of Rule
3.3(a) to (c), Rule 3.4 (a) to (c), and Rule 3.5.
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Candor - to the Mediator
• ABA Formal Opinion 06-439:
• The Model Rules do not require a higher standard of
truthfulness in any particular negotiation contexts.
Except for Rule 3.3, which is applicable only to
statements before a “tribunal,” the ethical prohibitions
against lawyer misrepresentations apply equally in all
environments.
• The same standards that apply to lawyers engaged in
negotiations must apply to them in the context of
caucused mediation.
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Conflicts of Interest
• Rule 1.7 Conflict of Interest: General Rule: (a) Except as provided in
paragraph (b), a lawyer shall not represent a client if the representation
involves a concurrent conflict of interest.
• A concurrent conflict of interest exists if:
(1) the representation of one client will be directly adverse to another
client; or
(2) there is a significant risk that the representation of one or more
clients will be materially limited by the lawyer's responsibilities to
another client, a former client or a third person or by a personal
interest of the lawyer.
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Conflicts of Interest
• Rule 1.7 Conflict of Interest: General Rule: (b) Notwithstanding the
existence of a concurrent conflict of interest under paragraph (a), a
lawyer may represent a client if:
• (1) the lawyer reasonably believes that the lawyer will be able to
provide competent and diligent representation to each affected client;
• (2) the representation is not prohibited by law;
• (3) the representation does not involve the assertion of a claim by one
client against another client represented by the lawyer in the same
litigation or other proceeding before a tribunal; and
• (4) each affected client gives informed consent, confirmed in writing.
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Conflicts of Interest
• Rule 1.9 Duties to Former Clients: (a) A lawyer who has
formerly represented a client in a matter shall not thereafter
represent another person in the same or a substantially related
matter in which that person's interests are materially adverse to
the interests of the former client unless the former client gives
informed consent, confirmed in writing.
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Conflicts of Interest
Rule 1.13: The Army as Client: (a) Except when representing an
individual pursuant to (g) below, an Army lawyer represents the
Department of the Army acting through its authorized officials.
*
*
*
(d) In (e) In dealing with the Army’s officers, employees, or
members, a lawyer shall explain the identity of The Army as the
client when it is apparent that the Army’s interests are adverse
to those of the officers, employees, or members.
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Army ADR Program Contacts
• Director, Dispute Resolution: Marc Van Nuys, 703696-5240 (DSN 426); Email:
[email protected]
• Acquisition: Don Yenovkian, 703-696-5540;
Email: [email protected]
• Workplace/Training: Vacant
• www.adr.army.mil
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