Solo and Small Firm

The Practitioner Winter 2014, Volume 20, Issue 4

Protecting Your Clients From Lies at Mediation

By Stephen H. Marcus

Stephen H. Marcus is the head of the business law department of Gittler & Bradford, and has specialized in business litigation for the past 42 years. He is also a mediator of business disputes in association with EB Resolutions of Encino, California, and a member of the U.S. District Court and Bankruptcy Court Mediation Panels.

Earlier this year, the California State Bar published for public comment its proposed Formal Interim Opinion No. 12-0007,1 which discusses the ethical boundaries between permissible "puffing" or exaggeration and lying during the course of a mediation. The Interim Opinion states the obvious—that an attorney’s "puffing" or exaggerating a client’s claims is within the ethically permissible boundary, while outright lying at a mediation was on the other side of that boundary. The focus of the discussion in the Interim Opinion is the somewhat fuzzy line between permissible puffing and impermissible lying. However, what the Opinion does not discuss is the very practical issue of how to deal with representations made by an adversary (or his2 attorney) in the course of a mediation, whether made directly or through the mediator.

Interim Opinion 12-0007 gives several examples of what constitutes puffing or exaggeration, and what constitutes unethical misstatements. For example, an attorney representing a defendant crosses the ethical line if he claims that the defendant has only $500,000 in insurance coverage, when the attorney knows his client has $1,000,000 in coverage. However, expressions of opinions or predictions about how a judge or jury would assess the case, and statements about possible future events ("bankruptcy is an option for my client"), are on the permissible side of the ethical line.

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