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Issue 54
Ethical Issues for Counsel Appearing in Mediations Print E-mail

 ethics_intro.jpgThe following paper was presented by Richard Douglas S.C. and Kathryn McMillan S.C. at the recent Janus Club meeting.

Introduction:

The profession frequently canvasses the apt import and content of conduct engaged in by legal practitioner, barrister or solicitor, appearing for a party in mediation. The primary focus of this exercise is the exhortation to be persuasive, succinctly and sensibly, in order to maximise the position of one’s client.

What is canvassed less often are the ethical rules which resonate, so as to set metes and bounds of persuasive mediation advocacy. This paper is directed to that topic.

Misleading one’s opponent:

To set the scene with an early example: it is one thing to say that the barrister should attempt to discourage a client or solicitor instructing him or her to put an offer as “final”; it is another to make and characterise an offer thus, whereas in truth such communication does not represent the client’s true position but is merely a negotiation ploy.

The Barristers Rules 2011 (“the 2011 Rule”) were gazetted just before Christmas 2011. They reflect the national statutory rules for the profession of the bar.

The 2011 Rule, inter alia, re-enacts the longstanding ethical rule proscribing one barrister misleading another, not just in court or outside court, but also upon a mediation. The example given above plainly contravenes that rule.

The relevant 2011 Rule provision is rule 48:

48. A barrister must not knowingly make a false statement to an opponent in relation to the case (including its compromise).

(emphasis added)

And for completeness, rules 49 and 50 provide:

49. A barrister must take all necessary steps to correct any false statement in relation to the case made by the barrister to an opponent as soon as possible after the barrister becomes aware that the statement was false.

50. A barrister will not have made a false statement to an opponent simply by failing to correct an error on any matter stated to the barrister by the opponent.

Notwithstanding, or perhaps in spite of rule 48, our experience is that, on occasions, practitioners, some quite senior, are cavalier in their approach in this sphere.

The rule, in the context of mediation, in a former iteration was exemplified in the decision of Byrne J in Legal Services Commissioner v Mullins [2006] LPT 12.

The facts of that case are well known, concerning a personal injury case mediation, where early in the pre-proceeding process when claim documents were delivered to the defendant insurer, a case was put, by reference to facts, of economic loss calculated for many years into the future. This lay uncorrected by the plaintiff’s lawyers.

Shortly prior to the mediation, counsel and solicitor for the plaintiff who had proffered such material were told by the client that he had a supervening medical condition which was very likely to sharply curtail her life expectancy. Nonetheless the claim, on instructions from the client and despite unsuccessful attempts by the lawyers to arrive at the correct legal position, was maintained at mediation on the basis of the earlier proffered documents.

The importance of the case transcends the character of the claim there being that of personal injury case. It applies to cases of every subject matter.

Byrne J essayed:

... the involvement of lawyers (does not) suggest that negotiations about settling a ... claim are conducted in the shared expectation that legal consequences will not attach to intentional deception of that material fact. ... When this mediation was held, Queensland barristers could not have approached the exercise on the basis that they were entering an honesty free zone.

(our emphasis)

His Honour found professional misconduct practised by the barrister (and, as transpired in a later hearing, the solicitor) engaged for the claimant.

The message is clear: play it straight! Sure, be incisive, intelligent and persuasive, but also be truthful.

Discouraging one’s client: ethics_04.jpg

Discouraging a client engaging, or acquiescing in a client’s refusal to engage in bona fide participation in mediation, while at first blush apparently a moral or philosophical issue, harbours potential ethical transgression.

The 2011 Rule, as with the 2007 Rule, requires counsel to advise the client of the benefits of alternative dispute resolution. Rules 37 and 38 provide:

37. A barrister must promote and protect fearlessly and by all proper and lawful means the client’s best interests to the best of the barrister’s skill and diligence, and do so without regard to his or her own interest or to any consequences to the barrister or to any other person.

38. A barrister must inform the client or the instructing solicitor about the alternatives to fully contested adjudication of the case which are reasonably available to the client, unless the barrister believes on reasonable grounds that the client already has such an understanding of those alternatives as to permit the client to make decisions about the client’s best interests in relation to the litigation.

(emphasis added)

Surely it would be inconsistent with those rules, if not the earlier mentioned rule 48, for a barrister to advise, or accept instructions from a client, or briefing solicitors, that alternative dispute resolution agreed to ought be treated such that:

  • no reasonable endeavour ought be made to resolve the litigation on the competing merits and risks, but merely to undertake the exercise as part of the passage towards a hearing;
  • (worse still) the mediation is engaged in solely for the purpose of testing your side’s legal propositions with the opponent, or as an evidence gathering exercise in the “without prejudice” exchange.

While not suggesting for one moment that either of us have frequently encountered such conduct on behalf of counsel, it does occur regularly enough to be of concern.

Proper preparation for mediation:

A not infrequent circumstance is where counsel is briefed to appear at a mediation but has not and is not asked to advise on prospects, and there does not exist any prior updated advice from either counsel or an experienced solicitor.

Again, some of you may be thinking: what does this have to do with ethics?

Suffice it to say, in our opinion, there is an ethical component involved.

The 2011 Rule, in rule 37, unsurprisingly, perpetuate the core obligation of counsel to approach the task at hand fearlessly in the interest of the clients. Again rule 37 provides:

37. A barrister must promote and protect fearlessly and by all proper and lawful means the client’s best interests to the best of the barrister’s skill and diligence, and do so without regard to his or her own interest or to any consequences to the barrister or to any other person.

(emphasis added)

Further rule 99(g) provides:

99. A barrister may refuse or return a brief to appear before a court:

(g) if the barrister’s advice as to the preparation or conduct of the case, not

including its compromise, has been rejected or ignored by the instructing solicitor or the client, as the case may be;

...

(emphasis added)

It is difficult to believe the ethical obligation owed by a barrister otherwise at law (the 2011 Rule not being exhaustive in prediction of proper conduct) would not apply to appearance on a mediation, as opposed to in court.

How can one discharge the above core obligation, in preparation for a mediation, without forming a considered view as to prospects?

Inexorably a client will ask how he, she or the company will fare if the matter goes to a trial, and counsel will be expected to answer. But even if, unusually, this does not occur, surely to put the client’s case fairly and reasonably, meet the case by way of response and advise in respect of appropriate offers and responses to offers, someone (preferably the advocate) must have formed a considered view about prospects?

Worse still, when the issue is raised by counsel upon briefing, the response occasionally comes from the solicitor that counsel was not asked to advise, but only to appear. Implicit in this stance is the notion that the client is not prepared to pay for the additional time and effort involved in forming a view about prospects, either by way of separate fee or in the preparation fee.

Absent a proper considered written advice already having been furnished by another counsel or solicitor, we see no middle ground here. Either must insist, successfully, in securing the appropriate instructions to form a view, and be paid for it, or the brief ought be rejected.

In the absence of rejecting the brief in such circumstance, counsel would be compelled to approach the mediation overtly on the footing of preparing for and putting competing arguments, but saying to the client that he or she cannot advise on offers because no view has been formed as to ultimate prospects.

One only has to state the proposition to appreciate its folly.

Arguments bereft of adequate legal or factual merit:

Rules 41 and 42 of the 2011 Rule:

41. A barrister must not act as the mere mouthpiece of the client or of the instructing solicitor and must exercise the forensic judgments called for during the case independently, after the appropriate consideration of the client’s and the instructing solicitor’s wishes where practicable.

42. A barrister will not have breached the barrister’s duty to the client, and will not have failed to give appropriate consideration to the client’s or the instructing solicitor’s wishes, simply by choosing, contrary to those wishes, to exercise the forensic judgments called for during the case so as to:

(a) confine any hearing to those issues which the barrister believes to be the real issues;

(b) present the client’s case as quickly and simply as may be consistent with its robust advancement; or

(c) inform the court of any persuasive authority against the client’s case.

(emphasis added)

Solicitors often forget we are not bound to argue in accordance with our instructions. That stated, counsel must warn the solicitor in advance of any constraint which such rules may inure in the particular case.

What these rules underscore, in truth, is the most effective means of discharge of the above core obligation, either in court or at mediation.

Persuasive advocacy entails brevity, knowledge of the case and fair treatment of (but hopefully destruction of or damage to) the opposing argument.

ethics_01.jpgFor a counsel to peddle poor or hopeless argument, or obfuscate, can lead to a poor ultimate outcome for the client, and damage to that counsel’s reputation.

Misleading the mediator:

This is even more reprehensible than misleading an opponent, by dint of difficulty in detection.

We say that because what a barrister says to a mediator privately (in the sense of in confidence in private session with one side) will not be expressly imparted by the mediator, but inexorably will inform the mediator as he or she goes about the mediator’s task.

The mediator must be able to rely upon the integrity of counsel and solicitor acting for parties, particularly when private information is being imparted (eg, factual evidence garnered, motivation to settle, financial pressure, view and desires of the parties).

As with the opponent, the mantra must be “play it straight” with the mediator, to the point of not even being close to crossing the rubicon of misrepresentation (or half truth or other misleading conduct).

Nobbling the mediator:

A mediator may be misled not just at the mediation but in discussions with counsel prior to the mediation hearing.

In our view there is nothing unethical in counsel for a party discussing the case with the mediator prior to such hearing. This contrasts with the position which obtained with judicial hearings. But care need be exercised in what is said.

It is plain enough that, prior to the hearing, counsel ought not mislead the mediator about the issues. That we have covered in the last section of this paper. A greater risk is that extensive private discussions between the mediator and counsel for one party may result in the well being poisoned.

What we mean in this regard is that, prior to the mediator reading the material, he or she may garner a jaundiced view of the case by extensive subjective views being expressed by counsel for one of the parties. Most experienced mediators are unlikely to be “nobbled” in this regard but our point is that it is unprofessional conduct for counsel for a party to engage in any conduct which may be so characterised.

Protecting yourself:

Remember counsel at mediation does not have the benefit furnished by the court transcript.

In complex cases, or sometimes in simple cases but with difficult clients, the issues entailed are such that, in the brevity and expedition of mediation exchange, information is being conveyed, whether in writing or orally, with such economy, that there is a heightened risk of a later allegation misrepresentation or misstatement.

It is incumbent upon the barrister involved to carefully identify such circumstances, and to ensure that clarity is the touchstone.

In this regard the written word will always trump the oral word. Greater care and consideration is ordinarily entailed in written communication at mediation, usually in the form of a written outline or submission.

Certainly the written word has the virtue of being able to be pointed to at a later time, hopefully for the purpose of vindicating counsel in the event of an allegation of misrepresentation being preferred against him or her.

To be clear, in our view a written outline, albeit spoken to at the mediation, can be, for counsel, a prophylactic against the prospect of later ethical complaint. In this regard it performs much the same role as a detailed memorandum following the discharge of any instructions, whether in court, mediation or otherwise.

If counsel are driven to heavy reliance on the oral word, particularly in the course of a mediation, apart from perhaps confirming the same in any subsequent memorandum to the client as a record, he or she should always be careful to speak with absolute clarity, not going anywhere near crossing the rubicon of mis-statement.

Terrifying the client:

Again, some may think we betray undue conservatism in this regard, but it does have an ethical foundation.

The 2011 Rule, again, persist with the long established core obligation that counsel retained to conduct a case is obliged to conduct such case fearlessly and without personal interest: see rule 37 above.

Vis-a-vis one’s client, it is quite unfair, on the one hand, to scare the wits out of them as to the prospect of losing (or not doing as well as he, she or it might) but not on the other hand expounding or reiterating the merits of their case.

Only with such a balanced approach can the obligation of counsel be properly discharged.

Our view is that one of the reasons that mediation has been so successful in Queensland, in the last decade or so, is that counsel engaged for parties (and occasionally mediators, although their obligation is not as high in this regard), on occasions, have been far too assiduous in pointing up to the client a pessimistic view as to the outcome of litigation.

In our opinion, on occasions, that has led to compromise being achieved, in commercial or other cases, with either a diminished outcome for a plaintiff, or excessive outcome for a defendant, in either case on account of the inculcated fear of trial.

There are cases which, in our view, should have gone on towards trial, perhaps to be settled earlier, but if not then adjudicated with whatever is the outcome.

Some of the judges say this too. Of course, they have changed their tune in this regard with the passage of the years, given that their initial motivation in forcing parties to mediation was the relief of long civil lists.

ethics_02.jpgWasting time:

We consider time wasting apropos mediations also has an ethical element. Examples of time wasting are many but a few salient examples exist.

The primary example is setting down a mediation for too long. In our view to set down a mediation for a full day or two days, sometimes, is to guarantee the operation of Parkinson’s law: namely, work expands to fill the time available.

What often occurs is that serious negotiation will often occur only in the last 25% of the time available.

All this does is to encourage parties to make silly early offers.

A cognate example concerns an opening offer and schedule of damages, which is wholly unrealistic, and in effect being an opening position by a plaintiff to raise the sights of the opponent, in effect on an in terrorem basis.

While sometimes spawned by the lastmentioned conduct, the same can be said equally of a defendant making an opening offer which is unreasonably and ridiculously low.

We attribute such conduct not just to lack of professionalism, entailing lack of proper ethical conduct, but to a lack of courage on the part of the practitioner in the advice he or she gives the client as to the apt result!

It is open to a party to sensibly express his or her position, and run their own race. Make a sensible offer but then move in small increments in any further offers. Why not do so?

If a client has confidence in counsel he or she will generally run with their views. Sometimes this is difficult with idiosyncratic or some experienced litigants, but that is more the exception than the rule.

We reiterate the above rules 41 and 42 of the 2011 Rule underscore the long established principle that counsel is not bound to make a submission merely because instructed to so do, if counsel ethics_03.jpgconsiders it has no merit and is time wasting.

Conclusion:

There are many other examples one could identify but there is an obvious bright line through all the above examples of inimical conduct.

Just as obtains in court, counsel remains an officer of the court when conducting extra-curial activities such as mediations.

Honesty, good sense and fair dealing inform apt conduct.

Abiding the biblical golden rule, viz, that we should practice towards others as we would expect them to practice towards us, will always see counsel right.

If we stray from the statutory obligations imposed on us then the 2011 Rule may come back to haunt us, in the form of a prosecution by the Legal Services Commissioner.

RJ Douglas S.C.

K McMillan S.C.


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