Tag Archive for: Ethics

Remote Mediation Ethics

The COVID-19 pandemic has made many things about our jobs more difficult. And yet, there is a silver lining when it comes to case resolution.
 

The inability to safely congregate has compelled lawyers and claims professionals to turn to video mediation. Some were surprised to learn the benefits. Among these are that people are more relaxed in familiar environments; they feel more in control. Less stress results in better negotiation.

Pre-pandemic, the real decision makers often did not actively participate, instructing the attorneys, “Call me if something important happens.” These people missed getting the full picture. Now, there is no barrier (or excuse!) for parties who may be hundreds of miles away to actively participate. Again, the result is a better negotiation.

Lawyers must not shun mediating via remote technologies like Zoom. On the contrary, they have an ethical duty to master the technology. California Rule of Professional Conduct 1.1 imposes a duty of competence, which includes the learning and skill reasonably necessary to provide legal services. The rule specifies that if you don’t already have that learning and skill, go out and get it or hand the case off to someone who does. State Bar of California’s Formal Opinion 2015-193 addressed the question of technology competence in a case involving e-discovery. The opinion states: “An attorney’s obligations under the ethical duty of competence evolve as new technologies develop and become integrated with the practice of law.”

Of course, you will want to choose a mediator who is comfortable with remote mediation technology. One way for you to get comfortable with it is to ask that mediator for a free practice session.

New Mediation Disclosure Law

Effective January 1, 2019, California attorneys must provide a written mediation disclosure statement to clients or face potential disciplinary consequences.

What Does the New Law Do?
The disclosure does not protect clients so much as inform them about mediation confidentiality. Under changes to the Evidence Code, attorneys must have clients sign off on a mediation disclosure form as soon as reasonably possible before the client agrees to participate in mediation. If the attorney is hired after the client has agreed to mediate, the attorney must get the client’s sign-off as soon as reasonably possible after being retained. If the client signed off on a disclosure with prior counsel, new counsel should get another acknowledgement naming the current attorney. All clients should sign it.

The disclosure must be on a single page not attached to any other document and must be printed in the preferred language of the client in at least 12-point font. It must include the names of the attorney and the client and be signed and dated by the attorney and the client.

The law specifically contemplates an “attorney disciplinary proceeding to determine whether the attorney has complied with Section 1129.”

Unh-Unh, Not Me
What if the Evidence Code doesn’t apply to your practice area? You work in administrative law, such as Workers Compensation, or limit your practice to federal court.

Even if you never handle a case with a state civil court aspect nor a federal case with diversity jurisdiction, observing the new rule is the safe choice.That this amendment passed at all started with concerns about legal malpractice suits founded on communications within the mediation process. Legal malpractice suits are filed in state court or rely on diversity jurisdiction using state rules. Mediation confidentiality rules apply to all types of practice.

What Does the Disclosure Do—And Not Do?
The disclosure lays out the basics of the mediation disclosure rules, i.e., an almost total evidentiary exclusion of communications. This includes legal advice provided to a client during the mediation. Absence of the client’s signature or that the client did not receive the form is not a ground for invalidating a settlement agreement.

The “safe harbor” disclosure form in Evidence Code 1129 assures clients they can still sue for malpractice or report misconduct to the State Bar, just not using any evidence relating to a mediation.

How To Comply
Attorneys who regularly mediate should consider obtaining the disclosure at the beginning of the representation. The safe harbor form doesn’t limit the disclosure to a single case. Nonetheless, attorneys working on multiple cases under an ongoing or tripartite relationship may wish to add language to make it clear that the client is executing a blanket sign-off.

When The Injured Worker Calls- Ethical Implications

I get calls at least once a month from represented injured workers who don’t know what is going on with their claims. Stop and think about that in light of the Rules of Professional Conduct.

Typically, in violation of existing rules, the AA has not communicated with the client. Sometimes the attorney has given the client false information. Recently an IW told me his lawyer said there was no such thing as mediation for workers’ compensation cases.

Many of these IW’s are reaching out directly to the employer’s counsel to try to resolve their issues. This puts the employer’s counsel in a difficult ethical position. New Rules 4.2 (represented person) and 4.3 (unrepresented person) lay out the restrictions on defense counsel for that communication.

Frustrated injured workers who want to resolve their claims are seeking information on the internet. That’s how they get to me.

I am not an advocate for anyone; I am a professional neutral. I have always made that role clear to callers. New Rule 2.4 requires mediators to inform unrepresented parties of the mediator’s neutrality. All I can do is assure the workers that I am available to mediate and to talk to their lawyers or adjusters about starting the process.

If you get a call from someone who wants to mediate, don’t brush off that inquiry. There is no charge to talk to me about whether mediation is right for your case. I’ll give you the information you need.

New Rules Of Professional Conduct For California Lawyers

                                                 New Considerations in Settlement and Case Management 

The California Supreme Court has approved new rules of professional conduct for attorneys licensed in California which go into effect November 1, 2018. These rules generally expand the existing settlement ethics rules. Violation of the rules can lead to a range of disciplinary actions, including disbarment. Here are the ones which affect people trying to settle a case.

Client Communication
Prior Rule 3-500 in a single sentence required lawyers to keep clients reasonably informed about significant developments. New Rule 1.4 is more detailed. Now there’s a two-way street: the lawyer must reasonably consult with the client about how to achieve the client’s goals. What’s more, the lawyer must also inform the client about what the lawyer cannot legally or ethically do even if it’s what the client expects.

Prior Rule 3-510 required lawyers to promptly communicate the specifics of a written settlement offer. A California lawyer need only pass along a spoken settlement offer if the lawyer deems the offer significant. New Rule 1.4.1 preserves this distinction.

In evaluating settlement offers or making other decisions about the representation, the Comment to new Rule 2.1 clarifies that a lawyer can initiate advice to a client on relevant, non-legal issues, such as moral, economic, social and political factors.

Diligence
Prior Rule 3-110 defined “competence” as including diligence. Now a separate Rule 1.3 prohibits a lawyer from “intentionally, repeatedly, recklessly or with gross negligence” failing to act with reasonable diligence.

New Rule 3.2 says “a lawyer shall not use means that have no substantial purpose other than to delay or prolong the proceeding or to cause needless expense.” Now an ethical rule may apply to needless court appearances and continuances and improperly postponed treatment.

Truthfulness
New Rule 4.1 prohibits lawyers from knowingly making a false statement of material fact or law to a third person, i.e., someone who is not a client, such as an opposing party or witness. A lawyer cannot knowingly incorporate or affirm the truth of someone else’s false statement. A nondisclosure is the equivalent of a lie if the lawyer makes a partially true but misleading material statement or omission. On the other hand, the Comment to the Rule clarifies that there is no affirmative duty to inform an opponent of relevant facts. Representations about case value are not statements of fact or law.California Business and Professions Code sec. 6068(d) requires lawyers to represent clients with methods which are “consistent with truth.” A lawyer who intentionally deceives the court or any party can be charged with a misdemeanor. This statute remains in effect.Everybody Who Acts For the Firm
Prior Rule 3-110 included within the duty of competence a duty to properly supervise lawyers and non-attorneys or agents. New rules 5.1, 5.2, and 5.3 expand on that and provide for vicarious liability for a breach. A subordinate lawyer has an independent duty to follow the rules, but is not responsible for following instructions when there is an arguable question of professional duty.

 

Making Sure Your C&R Is Approved: Itemize Offers to Assure Adequacy

“Let’s see,” I said to the employer’s representative. “After deducting PDAs, the MSA, and attorney fees from this offer, the injured worker will end up owing you money.”

It happens more often than you might imagine. Usually it’s because the defense has forgotten the attorney’s fee. Then they wonder why the offer was rejected. Unless parties are in mediation, negotiation often stops.

Why You Need Adequacy
A settlement must be adequate. A recent case on the issue of settlement adequacy, Alvarenga v. Scope Industries, caught some workers compensation professionals off-guard. The court reversed approval of the settlement because after allowing for attorney fees it was inadequate to fund the MSA. Whether CMS approval of the MSA was sought was irrelevant.

California regulations mandate adequacy:
“The Workers’ Compensation Appeals Board shall inquire into the adequacy of all compromise and release agreements and stipulations with request for award, and may set the matter for hearing to take evidence when necessary to determine whether the agreement should be approved or disapproved, or issue findings and awards.”
8 CCR § 10882 Action on Settlement Agreement

Written Itemization Promotes Settlement
Itemized offers and demands help settle cases. When the PDAs, MSA and attorney fees are itemized in an offer, everyone can see how funds will be disbursed.California law favors written settlement offers. Attorneys must show clients written settlement offers and demands, California Rule of Professional Conduct For Attorneys 3-510, but need only convey oral offers if the attorney thinks the offer is “significant.” Written offers let the recipient easily and accurately convey the information to the ultimate decision-maker.Preparing an offer or demand requires review of indemnity issues, Medicare-eligible expenses, and non-Medicare-eligible expenses. Calculating the settlement parts separately can be an eye-opening exercise. Itemizing can show why the offer or demand is reasonable.

Settlement Ethics

Ethics are the moral principles that govern behavior. Every workers compensation professional has ethical rules to follow. For attorneys, these are spelled out in Codes of Professional Responsibility, statutes and sometimes case law. Despite some differences among the states, the basic principles governing settlement ethics are mostly the same

Duty to Communicate to the Client
Lawyers must keep clients reasonably informed about significant developments (CA Rule of Professional Conduct 3-500). CA Rule 3-510 tells lawyers to promptly communicate the specifics of a written settlement offer. In other words, a California lawyer need only pass along a verbal settlement offer if the lawyer deems the offer significant. The lesson for negotiators is to make all settlement offers in writing to ensure the client learns about them. The bonus: a written offer avoids confusion about the offer’s terms.

In an unpublished Texas case, Grillo v. Harris Hospital, a former client sued for legal malpractice damages for the alleged failure to communicate a settlement offer. The suit claimed that the attorney’s failure to convey a structured settlement offer resulted in the plaintiff’s loss of public benefits worth millions of dollars. The law firm paid a $1.6M settlement.

Duty of Competence
A lawyer must be competent, defined as having the diligence, learning and skill, and mental, emotional and physical ability to practice (CA Rule of Professional Conduct 3-110). That means the lawyer should be conversant with all the factors impacting settlement, including access to public benefits and tax. If the lawyer is not expert in a subject, the lawyer can notify the client to obtain such an expert.

Duty of Honesty
Lawyers must act honestly in litigation, including settlement negotiations. California Business and Professions Code Section 6068(d) requires an attorney to “employ, for the purpose of maintaining the causes confided to him or her those means only as are consistent with truth…“ Business & Professions Code 6128 imposes misdemeanor criminal liability on a lawyer who intends “to deceive the court or any party.” The maximum penalty is a six-month jail sentence, a fine up to $2,500 or both.