1. 1 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.

2. 2 Unassisted Negotiations Process Assistance Outcome Prediction Conciliation Facilitation Mediation Ombuds Early Neutral Evaluation Fact-Finding Non-binding Arbitration Public Litigation Binding Arbitration Summary Trial with Binding Decision Administrative Boards (ASBCA) Judicial Forums (Federal Courts) NEGOTIATION ALTERNATIVE DISPUTE RESOLUTION LITIGATION The Dispute Resolution Spectrum Non-Binding ProcessesBinding Processes Traditional Settlement Negotiations LITIGATION Mini-Trials Settlement Judge 2

3. 3 Overview  The Big Three   Competence   Candor   Conflicts of Interest 3

4. 4 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. 4

5. 5 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? 5

6. 6 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. … 6

7. 7 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. 7

8. 8 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. 8

9. 9 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. 9

10. 10 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? 10

11. 11 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.”

12. 12 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?

13. 13 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?

14. 14 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. … 14

15. 15 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. 15

16. 16 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? 16

17. 17 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. 17

18. 18 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.

19. 19 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.

20. 20 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;… 20

21. 21 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. 21

22. 22 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. 22

23. 23 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. 23

24. 24 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. 24

25. 25 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. 25

26. 26 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. 26

27. 27 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. 27

28. 28 Army ADR Program Contacts Director, Dispute Resolution: Marc Van Nuys, 703- 696-5240 (DSN 426); Email: marc.vannuys.civ@mail.mil marc.vannuys.civ@mail.mil Acquisition: Don Yenovkian, 703-696-5540; Email: donald.m.yenovkian.civ@mail.mildonald.m.yenovkian.civ@mail.mil Workplace/Training: Vacant www.adr.army.mil www.adr.army.mil