Ethics in Brief

Ethics in Brief is designed to present ethical issues that practitioners might well face on a daily basis. It is a service of the Legal Ethics Committee of the San Diego County Bar Association.

State Bar Committee on Professional Responsibility and Conduct Provides Guidance Regarding the Ethical Scope of Settlement Negotiating

COPRAC Formal Opinion No. 2015-194 confirms that “[s]tatements made by counsel during negotiations are subject to those rules prohibiting an attorney from engaging in dishonesty, deceit or collusion.”

Thus, attorneys may not make false factual statements or implicitly misrepresent material facts during negotiations.   But, puffery and posturing, such as statements about a party’s negotiating goals or willingness to compromise, are generally permissible because they are not considered statements of fact.

The opinion covered a hypothetical fact pattern where several representations were made leading up to a settlement conference regarding liability and damages in a personal injury action finding hypothetical misrepresentations regarding a favorable witness and the plaintiff’s annual earnings were impermissible misstatements of fact while an inaccurate representation as to the plaintiff’s “bottom line” settlement number was allowable “puffery.”  

As to the hypothetical defense attorney, inaccurate representations regarding defendant’s policy limits and a representation that Defendant would file for bankruptcy, knowing the defendant had consulted an attorney and was ineligible for bankruptcy were also impermissible misrepresentations under the circumstances.  

The opinion confirms that although negotiations of all types often involve “bluffs,” attorneys must remember they are subject to different standards and, despite their duty to zealously represent their client, must be truthful.   

-- Andrew Servais

**No portion of this summary is intended to constitute legal advice. Be sure to perform independent research and analysis. Any views expressed are those of the author only and not of the SDCBA or its Legal Ethics Committee.**