ABA-439
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| Parties and their lawyers often make statements in negotiations that are "less than entirely forthcoming," such as: "understate[ing] their willingness to make concessions to resolve the dispute"; "insist[ing] that it will not agree to resolve a dispute for less than $200, when, in reality, it is willing to accept as little as $150 to put an end to the matter"; overstating confidence in obtaining alternative sources of supply, etc. These statements are considered "posturing" or "puffing," and "must be distinguished from false statements of material fact." For instance, the employer in labor negotiation cannot advise the union negotiator that certain benefits will cost $100 per employee when the lawyer knows that the benefits will only cost $20 per employee. Similarly, a litigant cannot state that documentary evidence will be submitted at trial in support of a defense if the lawyer knows that the documents do not exist. Prosecutors and criminal defense lawyers cannot state that they are aware of an eye witness if that is not true. Lawyers must be careful not to convert statements of position into "false factual representations." For instance, a lawyer can state "that the client does not wish to settle for more than $50," but could not state that a corporation's board has "formally disapproved any settlement in excess of $50" if that were not true. The general Model Rule 8.4(c) ban on dishonest conduct cannot be read to prohibit any misrepresentation, "regardless of the lawyer's state of mind or the triviality of the false statement in question" (or else it would render Model Rule 4.1 superfluous). State bars have punished lawyers for engaging in such misrepresentation as lying about insurance coverage limits, or settling a case without disclosing that lawyer's client has died. In contrast, "statements regarding negotiating goals or willingness to compromise, whether in a civil or criminal context, ordinarily are not considered statements of material fact." The same rules apply to caucused mediation as to other forms of negotiation. A lawyer-mediator is subject to ABA Model Rule 8.4's general prohibition on deceptions, but not to ABA Model Rule 4.1 -- which applies to lawyers' conduct "in the course of representing a client." |