1. DELVACCA Ethics in Settlement Negotiations and Mediation Cathy Codrea Michael Duff Stephen G. Harvey Michael K. Jones Charles S. Marion
August 18, 2010

2. Agenda
Three Scenarios
Each covers a different aspect of ethics in negotiations
Ask you, the audience, for thoughts and comments
Note the applicable rules
Summarize the proper response

3. “Truthiness” Scenario #1
“Truthiness is what you want the facts to be, as opposed to what the facts are. What feels like the right answer as opposed to what reality will support.” – Stephen Colbert

4. Scenario #1 – “Truthiness”
Issues:
Is some grandstanding to be expected?
What facts must be disclosed? Why?
What information may be withheld? Why?
Applicable Rules:
4.1 (Truthfulness in Statements to Others)
8.4(c) (Professional Misconduct)
3.4 (Fairness to Opposing Party and Counsel)?

5. Scenario #1 – “Truthiness”
Rule 4.1
In the course of representing a client a lawyer shall not knowingly:
make a false statement of material fact or law to a third person; or
fail to disclose a material fact to a third person when disclosure is necessary to avoid aiding and abetting a criminal or fraudulent act by a client, unless disclosure is prohibited by Rule 1.6.

6. “Changing The Past”
Scenario #2

7. Scenario #2 – “Changing the Past”
Issues:
Can you change the facts in connection with a settlement of a claim?
What are the risks in doing so?
Does it make any difference if the change will affect only the parties to the agreement?
Are there any ethical rules that are implicated?

8. Scenario #2 – “Changing the Past”
Do you have any ethical obligation to third parties in connection with a settlement you negotiate for a client?
Applicable Rules:
3.3 (Candor to the Tribunal)
4.1(b) (Truthfulness in Statements to Others)
8.4(d) (Misconduct)

9. “If You Can’t Beat ‘Em, Can You Join ‘Em?”
Scenario #3

10. Scenario #3 – If You Can’t Beat ‘Em . . .
Issues:
Can you include this provision in a settlement agreement?
Rather than prohibiting work against the opponent, could you include a provision prohibiting opposing counsel from using any of the information learned during the representation in any future matter against the same opposing party?

11. Scenario #3 – If You Can’t Beat ‘Em . . . .
Can you hire opposing counsel as a consultant?
What happens when the consulting engagement is over?
Can you secure a representation from the lawyer that there isn’t another plaintiff waiting in the wings? Do you want to ask that question?

12. Scenario #3 – If You Can’t Beat ‘Em . . . .
Applicable Rules:
5.6(b) (Restriction on Right to Practice)
1.2 (Scope of Representation and Allocation of Authority)
1.7(a) and (b) (Conflict of Interest: Current Clients)
1.9 (Conflict of Interest: Former Clients)

13. Scenario #3 – If You Can’t Beat ‘Em . . . .
Rule 5.6
A lawyer shall not participate in offering or making:
an agreement in which a restriction on the lawyer’s rights to practice is part of the settlement of a client controversy.

14. Scenario #3 – If You Can’t Beat ‘Em . . .
ABA Formal Opinion
Client’s decision to accept offer is not dispositive
Agreements restrict the public’s access to experienced lawyers
Settlement may reward a desire to “buy off” counsel as opposed to a payment which reflects the merits of the claim
Places attorney in conflict with clients, forcing attorney to give up future representation

15. Scenario #3 – If You Can’t Beat ‘Em . . .
ABA Formal Opinion
Ban on use of information effectively bars lawyer from future representation
Inability to use information may materially limit future representation and adversely affect it
Client consent ineffective in that situation
Is a restriction on lawyer’s right to practice
But nondisclosure provision is acceptable

16. For more information, visit www.pepperlaw.com.