Why are US lawyers allowed to lie while negotiating?

Posted on 12/07/2021 by Robert Angyal SC

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Robert Angyal SC and Nicholas Saady

The late William Rehnquist, when Chief Justice of the US Supreme Court, gave many speeches at law schools. For a while, to lighten the tone, he started each speech with a ‘lawyer joke’.

Example: What is the difference between a bad lawyer and a good lawyer? Answer: A bad lawyer makes a case drag on for years. A good lawyer makes it last even longer. Example: What looks good on a lawyer? Answer: A Doberman.

But Rehnquist abandoned his practice when he discovered two things: First, the lawyers in the audience did not think the jokes were funny. Second, the non-lawyers in the audience did not realise they were jokes.[1]

Rehnquist’s discoveries illustrate a problem for the U.S. legal profession: Public distrust. A 2020 Gallup poll found that only 3% of people surveyed found lawyers’ honesty and ethics to be “very high”, and only 18% found them to be “high”.[2] This public distrust is a perennial source of concern to the national legal body, the American Bar Association. Its journal regularly features articles such as “What can lawyers do to combat their bad PR?”, which suggests that “carefully executed social media presences” can “build trust, erasing one lawyer joke at a time”.[3]

Rather than carefully curating lawyers’ social media profiles, we suggest that a better approach to building public trust in lawyers would be revocation of the American Bar Association rule that allows lawyers to lie when negotiating. Yes, astonishingly, a disciplinary rule promulgated by the ABA (Model Rule 4.1(a)) allows lawyers to lie about non-material facts when negotiating on behalf of a client.

The very existence of that rule seems problematic. When you look at its legal meaning (or lack of), it becomes even more problematic. Despite several attempts to define and limit the circumstances in which the rule allows US lawyers to lie, its meaning remains unclear.

One such attempt was a formal ABA ethics opinion, five single-spaced pages long, with 22 footnotes.[4] (The irony inherent in issuing an “ethics” opinion defining when lawyers can legally tell lies apparently was lost on the ABA.) The perceived need for such a detailed guide to interpreting a one-sentence rule was itself an acknowledgment of the difficulty of interpreting it. We analyse the ABA’s opinion in a just-published law review article and conclude that it contains no coherent statement of principle and leaves the reader no wiser about what the rule means. Other attempts have been similarly futile — even failing to clarify the meaning of the most basic concept on which the rule is predicated: The distinction between material and non-material facts.

The justification for allowing US lawyers to lie about non-material facts seems to be that the recipients of the lies will not be harmed by them — because they will not rely on them, or not regard them as communicating facts. But if legally permissible false statements are trivialised to this extent, why bother making them? Better to tell the truth all the time and gain a reputation for trustworthiness. On the other hand, if more substantive false statements are allowed by the rule, how can it possibly be justified?

This, we conclude, is an inescapable dilemma generated by a rule permitting lawyers to tell lies. The dilemma explains why all attempts to date to explain the meaning of the rule have failed. It also explains why any further attempts would be equally futile.

Allowing lawyers to lie affects the image of the profession detrimentally and intensifies public distrust of it. It does enormous damage to the credibility and the moral authority of lawyers. It is damaging in another way also. If you know that the lawyer for your opponent is allowed to legally lie to you during a mediation in some, undefined, circumstances, the only prudent thing to do is to assume they are lying all the time and to disbelieve everything they tell you. So the rule not only generates public mistrust of lawyers, but also makes negotiations highly inefficient, because the parties cannot take anything they are told at face value.

The good news is that there is a straightforward solution to the problems raised in this post: Require lawyers to tell the truth, all the time (which is the position in Australia). Rather than advocating PR to improve the public image of lawyers, the ABA should heal this self-inflicted wound by revoking Model Rule 4.1(a).

Robert Angyal SC is an Australian barrister and mediator and was admitted in the District of Columbia for 40 years. Nicholas Saady is a New York and Australian lawyer and mediator. Their law review article “Legal Lying? Comparatively Analyzing US and Australian Lawyers’ Obligations of Truthfulness in Mediation” has just been published in [2021] 21 Pepperdine Dispute Resolution Law Journal 355 (Issue 2).

[1] Marc Galanter, Lowering the Bar: Lawyer Jokes & Legal Culture (The University of Wisconsin Press 2006) at p. 3.

[2] Gallup, “Honesty/Ethics in Professions | Gallup Historical Trends” (2020) https://news.gallup.com/poll/1654/honesty-ethics-professions.aspx.

[3] Danielle Braff, “What can lawyers to combat their bad PR?”, ABA Journal (February 1, 2020) https://www.abajournal.com/magazine/article/many-people-ignore-their-legal-needs-because-they-dont-trust-attorneys-what-can-lawyers-do-to-combat-their-bad-pr.

[4] ABA Committee on Ethics and Professional Responsibility, “Obligation of Truthfulness in Negotiation and Mediation”, Formal Opinion 06-439 (2006).

Striking the Right Balance between Maintaining Confidentiality and Educating the Community about Discrimination

Posted on 24/06/2020 by Dr Benjamin Hayward

By Dominique Allen

“ADR represents a symbolic harking back to a lost age when caring for others within a communal setting was of pre-eminent importance; it constitutes a reaction against the alienating and competitive style of dispute resolution fostered by an adversarial system.”

– Margaret Thornton, The Liberal Promise (Oxford University Press, 1990, 147)

This year marks 30 years since Emerita Professor Margaret Thornton published The Liberal Promise, a critique of anti-discrimination law in which she argued that liberalism, in the form of anti-discrimination law, will be unable to achieve equality because it can do little to disrupt the power structures that maintain inequalities in society.

As Thornton writes, anti-discrimination law does not give people a right to be free from discrimination; it gives them a right to complain about their treatment. Now – as then – a person who has been discriminated against is required to lodge a complaint at their local equality agency or at the Australian Human Rights Commission. The agency must attempt to conciliate the claim before the complainant can proceed to a civil tribunal or to the Federal Court (other than in Victoria). Courts and tribunals usually attempt to resolve claims via mediation also.

In the chapter she devotes to conciliation, Thornton says that she is ‘equivocal’ about it. Her primary concern was that as the process is confidential, it can have little impact on discrimination in society; its effect is limited to the parties. She didn’t suggest that courts are the ideal forum for discrimination claims though. She writes that complainants find courts “hostile and alienating”, litigation is not well suited to dealing with the types of issues that arise in a discrimination claims, it is costly, and courts are not well equipped to deal with power imbalances, which are common in these disputes. Thus conciliation serves a valid purpose.

In this post, I consider whether Thornton’s concerns about conciliation still apply, drawing on interviews I conducted with barristers and solicitors in Melbourne and conciliators at the Victorian Equal Opportunity and Human Rights Commission in 2017-2019.

One of Thornton’s primary concerns was that although discriminatory acts take place “in the public arena”, the dispute resolution process does not allow public scrutiny of these acts. They must be dealt with confidentially and in a “non-threatening privatised environment”. A public hearing is a last resort.

I share her concern, particularly because in the three decades that have passed, the problem has been compounded by an increased use of confidentiality clauses (often termed Non-Disclosure Agreements).

My research revealed that confidentiality clauses are regularly included in settlement agreements. They prevent the complainant from discussing the nature of the complaint and the terms of settlement. Some are worded so tightly that they prevent the complainant from discussing the claim with anyone, even with a close family member. It is difficult for the law to have an educative effect when claims are privatised and hidden in this way.

However, the process may well educate on an individual level. Conciliators said that just by participating in the dispute resolution process and listening to the complainant talk about their experience, respondents can be educated about their legal obligations and may well introduce changes to their business or workplace as a result. In this way, the process itself becomes part of the solution and a way of addressing harm.

An advantage of conciliation, Thornton writes, is that it creates a space where complainants can achieve small victories which would be “unlikely, if not impossible” within the formal legal system. My interviewees confirmed this. They said that through conciliation, complainants negotiate changes to working arrangements, access to goods and services, modifications to the delivery of education, and compensation payments far in excess of what the tribunal is likely to award. The tribunal, by contrast, orders compensation, often at low amounts which may not be enough to cover the complainant’s legal fees.

So am I equivocal about conciliation? In my view it is an effective way for the parties to resolve the underlying issues that caused the dispute and potentially reach a shared understanding of what happened. They may even be able to maintain a relationship going forward, which is very important in the employment and education contexts.

Being heard and knowing that their complaint has been taken seriously is often very important to complainants. Litigation will not give them that opportunity. Nor are courts likely to make the systemic orders which are needed to tackle discrimination, whereas respondents do agree to wider outcomes at conciliation.

I’m in favour of conciliation with the qualifier that we must be aware of its limitations. Confidentiality precludes the law’s development, it may allow ‘repeat offenders’ to continue undetected and it hides the prevalence of discrimination in the community. We need to find ways to alleviate its limitations.

The balance has yet to be struck between the parties’ desire to contain the complaint and the community’s interest in knowing about the types of discrimination that still exist and how discrimination is being addressed.

Hybrids have arrived – hosted by the beautiful city of Vienna

Posted on 03/07/2017 by Dr Rosemary Howell

Hybrid processes are not new to those of us who teach and write in the ADR space. We have all heard of arb-med and med-arb. Some of us have even heard of Baseball Arbitration, Night Baseball Arbitration and Medaloa.

Step into the practitioner’s world and the view is different.

Here the processes of mediation and arbitration remain distant strangers, practised and accredited separately. Few practitioners have dual qualifications and even those who do are rarely comfortable with the concept of offering a hybrid process.

The next generation of practitioners is being given the opportunity of seeing things differently via a new student mooting program.

The starting point is the Willem C. Vis International Commercial Arbitration Moot (Vis Moot) which has just reached its 24^th anniversary.

This moot tests the oral and written prowess of students in dealing with a complex international commercial conflict. This long established arbitration competition now has a sibling.

View of the historic Town Hall in Vienna – site of the competition cocktail party. Photo Copyright Rosemary Howell

Established three years ago, the IBA-VIAC Consensual Dispute Resolution Competition (CDRC) commences in Vienna on July 10^th at the beautiful University of Economics and Business (Wu Wien). Students participate either as negotiators or as mediators with separate scoring and evaluation for both roles.

The competition follows the Vis Moot and draws on the same case study (amended to remove all the procedural challenges of the arbitration). The competition opens with the news that the arbitration has been adjourned for a little over a week to give the parties the opportunity to see if they can resolve the conflict by mediation.

The competition gives an important signal that extends far beyond the students who are participating. The working committee drafting the problems has required consultation between arbitrators and mediators and encouraged a collaboration that is not often seen. Expert assessors too are being given experience in both the arbitration and mediation arenas.

The significant outcome is that not only is the next generation of practitioners being given the chance to consider hybrids up close, but practitioners are also joining the dots to draw together practices that once were very separate.

A great outcome.

Collaborative Practice – unique skillset or traditional lawyering?

Posted on 27/11/2016 by Associate Professor Becky Batagol

Student Guest Post by Ben Zocco

This post is the first in a series of posts on this blog written by students studying Non-Adversarial Justice at the Faculty of Law at Monash University. Students were invited to write blog posts explaining various complex areas of law relating to dispute resolution to ordinary readers. The very best posts are published here.

The advent of collaborative practice as a means of resolving family law disputes has provided couples with a means of completing a divorce or separation in a conciliatory and cost effective manner. With more than 200 practitioners currently registered with the Law Institute of Victoria’s Collaborative Law Section, a significant number of lawyers have undergone training that allows them to practice collaboratively.

The Law Council of Australia’s Basic Training Requirements

In response to its increasing popularity of collaborative practice, the Law Council of Australia has published the Australian Collaborative Practice Guidelines for Lawyers. This document encompasses a series of “Basic Training” requirements in order to be recognised as being collaboratively trained. This set of overarching training requirements forms a best practice guide for ensuring practitioners engaging in collaborative law are appropriately prepared for acting in this unique practice area.

army-recruit-is-in-training-at-the-army-physical-training-school-brisbane-1942 Image: Courtesy State Library of Queensland

The Basic Training requirements provide for the teaching of a range of skills that are unique to the practice of collaborative law. This is particularly so with the requirement that practitioners are provided with relevant training of the “collaborative model”.

What is Collaborative Practice?

Collaborative practice, as the name suggests, is a non-adversarial process used to resolve disputes. It requires the parties and their legal representatives to enter into a formal contract that puts the focus of the process settling a matter rather than resorting to litigation. Terms in the agreement generally refer to a commitment for each party to engage in the collaborative process in good faith and to share all available relevant information pertaining to the dispute with the other party. If the dispute is not resolved and parties seek to formally commence legal proceedings, the lawyers engaged in the collaborative process are contractually required to cease representing their clients. This requires the parties to engage new lawyers, generally at a significant cost, and serves as a major incentive to the parties to find common ground and work collaboratively to resolve their dispute.

Collaborative practice is conducted in the presence of each party and their legal adviser in what is described as a “four way meeting”. Several four way meetings take place over the course of a number of months, with each run according to agenda devised by the parties in consultation with their lawyers prior to the meeting. The conclusion of the four way meetings seeks to culminate in the drafting and execution of an agreement that resolves the dispute in a manner that is mutually acceptable to both parties.

The Unique Nature of Collaborative Practice

The collaborative model, as describe above, is an entirely unique approach to the resolution of disputes. While traditional mediation is also seen as an alternative to litigating matters, it differs from collaborative practice in many respects. The absence of a mediator in collaborative practice requires the legal representatives to facilitate the discussion rather than simply representing their client. Additionally, the capabilities necessary to operate collaboratively in the absence of a court-mandated framework for discovery and good faith negotiation is at odds with that of conventional alternative dispute resolution approaches. Accordingly, this skillset is unique to collaborative law practitioners.

The skills required of collaborative practitioners are also unique insofar as the model makes use of independent experts to facilitate the settlement of disputes. It is standard practice in a matter being resolved collaboratively to utilise the expertise of third party professionals, especially those who are trained as child specialists or financial advisors. These experts assist the parties and the lawyers in exploring interests (rather than positions) and potential options to satisfy the needs of the parties. Additionally, their experience assists the couple in being able to understand the impact of their separation on their children, as well as its effect on the financial position of each person once the dispute has finalised.

While the interaction of legal practitioners and independent experts is extremely common, the manner in which they work together in a collaborative setting compared with that of general legal practice is significantly different. In many jurisdictions, the relationship between independent expert is governed by a formal practice note, issued by the court. Lawyers typically engage independent experts by way of a formal retainer, setting out the advice necessary for the purposes of the matter. The expert will then write a formal report, setting out their findings. In many cases, an expert will be required to “hot tub” with an expert appointed by the opposing party in order to reach consensus conclusions and to narrow the issues in dispute. Additionally, experts retained in a litigation matter are subject to rigorous cross examination from other parties, adding an adversarial flavour to their contribution made for the purposes of resolving the matter.

In contrast, a collaborative approach requires each party to jointly appoint an expert, often by way of a shared recommendation by the practitioners representing them. The expert will work with each party in the room together and will rarely engage in separate discussions with parties individually. Rather than the lawyers approaching the assistance of an expert’s contribution as potentially suspect or misconstrued as may be the case in litigated disputes, they are able to respect and value their support in a truly collaborative fashion. Accordingly, the interdisciplinary approach to collaborative practice means a collaborative practitioner is required to have a unique skillset when involving experts in a matter being managed collaboratively.

Negotiation for All, Not Just the Collaborative

While there are many aspects of the “Basic Training” requirements that are unique to collaborative practitioners, it is clear that are not all exclusively within the domain of collaborative law.

A crucial example of this is the necessity that collaborative practitioners must be aware of and trained in negotiation theory; specifically, that of the differences between interest and positional-based bargaining.

A key tool in the arsenal of a collaborative practitioner is assisting the parties to consider the distinction between positions and interests. Unlike traditional positional bargaining, focusing on interests allows the parties to concentrate on the key issues that require resolution, rather than the parties becoming distracted on minor matters, falling into positional impasses or creating acrimony in the process. This prioritisation of interests, rather than positions, also assists the parties in being able to develop creative solutions that are mutually amenable, rather than being focused on finding a middle ground between two respective positions, neither of which may be the best holistic outcome.

But similar strategies are used in some forms of mediation generally, rather than solely within a collaborative setting. Facilitative mediation, for instance, also focuses on steering the parties toward concentrating on positions rather than interests. This occurs in a traditional mediation setting, involving the parties, their legal representatives and a trained mediator. Additionally, several popular negotiation courses offered by institutions such as MIT and Harvard University train legal practitioners and business executives to be aware of the distinction when being involved in a negotiation.

Accordingly, negotiation theory should not be considered solely a skill that is relevant to collaborative practitioners, but to the legal profession generally. Despite the differences in approach to alternative dispute resolution, ensuring that the legal profession is adequately trained to delineate between a client’s needs and wants should be recognised in considering the skills that are desirable for all practitioners to hold.

It is clear that collaborative practitioners are required to be appropriately trained in their interaction with fellow lawyers in a collaborative setting, the collaborative model in general and the manner in which the interdisciplinary focus of the practice differs from the general use of experts in a dispute. These are skillsets that, currently, are largely unique and confined to the practice of collaborative law. It is essential for the continued success of collaborative practice within Australia for the distinction between these attributes to other forms of alternative dispute resolution to be clear.

However, it can also be said that collaborative law requires skills that are not solely used within its discipline. A knowledge of negotiation theory is highly desirable for legal practitioners to possess for everyday dispute resolution, not just that involving collaborative practice. To that extent, it is clear that the collaborative practice “Basic Training” requirements of the Law Council of Australia encompass training that is both unique to collaborative practitioners and also relevant to the legal profession generally.

Mr Ben Zocco has recently completed Bachelor of Arts and Bachelor of Laws degrees from Monash University and will be commencing as a graduate lawyer with a national law firm in 2017. He has spent the later years of his legal education studying various forms of alternative dispute resolution and looks forward to the opportunity to put this knowledge into practice as a lawyer.

Lessons about Negotiation from the US Shutdown

Posted on 18/10/2013 by Associate Professor Becky Batagol

Now that we have seen the resolution (or postponement) of the impasse over the US budget and debt ceiling that shutdown the US government, what does it tell those of us who are interested in the dynamics of negotiation? Could we have predicted the outcome? Would principled negotiation have worked better in the long term?

In this piece in the Conversation, the fantastic website that helps bring academic work to a broader audience, I argue that the messiness of the negotiations and the one-sidedness of the eventual outcome were probably not predictable through any of our existing models of negotiation.

I value the work of many of our well-known negotiation theorists such as Fisher, Ury and Patton, Monookin and Kornhauser and Cass Sunstein, because they help us to analyse the many variables at play in negotiation. They sharpen our focus on the specific dynamics of the bargaining process and help us to better understand what does and does not work. But my view is also that these approaches can’t adequately capture everything that occurs in negotiation. People don’t always negotiate as we would predict they should. Power is remarkably fluid, elusive and impossible to fit into any ‘model’ of negotiating behaviour.

Heretical views, and I know. I am going out on a limb here. But the more I work in the field of dispute resolution, the stronger my views grow.

What do you think?