Tuesday, August 25, 2015

The Construction ADR Summit, Plenary 6: In Defense of Lying

Is it ethical to lie in a mediation?  Or, more to the point, how far should deceit or puffery really go?

Maybe the question should be how much truth must a party tell during a mediation.  In fairness, most attorneys expect gamesmanship when they go to a mediation. 

But, does the mediator have any ethical rules to follow?

Imagine the following scenario: you are a mediator trying to get a case settled. The case involves a lien that was filed in your state. After a brief review of the parties' mediation statements and document submissions, it becomes pretty clear to you that the party filing the lien has a fairly clear defect in its lien filing that makes it invalid.  

When you get to the mediation, the parties make their initial presentations.  You start in caucus with the owner to gauge the owner's interest in putting money on the table despite what seems to be the obviously invalid lien.

To your surprise, however, the project owner and its counsel apparently do not realize the problem with the lien's validity.  In your first caucus session, the owner's representative says to you in confidence, "I think we have some problems here, and we need to settle this today."

As the mediator, do you say anything to the Owner about what appears to be the invalidity of the lien?  Do you have any responsibility to say anything?

Former Division 1 chair Buzz Tarlow of Tarlow & Stonecipher, PLLC, in Bozeman, Montana, and Charles M. Sink of Farella, Braun + Martel LLP in San Francisco, California, will be discussing this issue, among others, in the final session of the Construction ADR Summit in Austin, Texas.  

Buzz was kind enough to take a few minutes to talk to me about this presentation. He pointed out to me that, to date, neither he nor Mr. Sink have found a single reported case anywhere in the United States in which a mediator was found to have committed an ethical violation based on their conduct during the mediation. 

Indeed, is there even a body of law or rules spelling out the ethics a mediator must follow? Do we as lawyers and advocates even want rules for mediators?

These topics -- and a discussion of the theory called consensual deception -- will feature prominently in the final Plenary session in Austin, as will the ability to obtain ethics CLE credit.

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