Under the ABA Model Rules of Professional Conduct, an attorney cannot make a false statement of material fact or law. Professor Carrie Menkel-Meadow of UC Irvine Law explains the gray areas of the black letter rule and explores the ethical limits of lawyers' truth and misstatements in negotiations. Lawyers are subject to strict ethical rules that require truthfulness in statements to others. However, when it comes to settlement discussions, many lawyers channel their inner Pinocchio and lie, exaggerate, deceive, deceive, deceive, bend the truth and misrepresent.
In an effort to be an enthusiastic advocate and obtain a favorable outcome for our clients, lawyers must negotiate without disclosing the true bottom line. But, there is a point where a small lie is actually an ethical violation. Where is the line between abusive misrepresentations and false interpretations? In other words, lawyers with the first set of attributes are perceived as much more effective than lawyers with the second set of attributes. If a lawyer has offered material evidence and becomes aware of its falseness, the lawyer will take reasonable corrective action.
While a lawyer is obliged to follow the client's instructions regarding what to disclose, if the client directs the client to make statements constituting fraud, the lawyer must advise the client against such conduct and, if the client insists, the lawyer must carefully consider whether the conduct constitutes fraud or suppression of evidence. Similarly, in a transaction on a particular matter, the lawyer may make a statement about the value or price of something even if the lawyer knows it is otherwise. It turns out that the insurer's lawyer's representation was false and the defense lawyer knew it. Mark Perlmutter, a Texas lawyer and frequent speaker on professionalism, wrote a book in 1998 called Why Lawyers (and the Rest of Us) Lie & Engaging in Other Disgusting Behavior.
In almost every case where an attorney speaks or writes on behalf of a client, the lawyer must be sincere. At the same time, lawyers cannot commit fraud or deception and lawyers cannot make false statements of material facts to persons other than clients. The court held that the victim's lawyer was entitled to rely on allegedly fraudulent statements by the attorney for the liability insurer and the law firm during settlement negotiations. The defendant's lawyer never specifically asked the plaintiff's lawyer if the plaintiff was still alive and if he was available for trial.
She surveyed 2,500 lawyers in Milwaukee and Chicago to find out what type of negotiation style was most effective as perceived by the lawyers surveyed. However, it would be an inadmissible lie if the lawyer says that the client does not have any insurance covering the tort, if the lawyer knows that the client has insurance. During settlement negotiations, the plaintiff's lawyer did not inform either the opposing lawyer or the court of the plaintiff's death.