Confidentiality in and Ethics of Negotiating Settlement Agreements
Victoria Pynchon, Esq. Settle It Now!! Dispute Resolution Services http://negotiationlawblog.com www.settlenow.com
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Protects Technical information
Plans, designs and patterns Processes, methods, techniques and formulas. Computer software
Uniform Trade Secrets Act
Protects Business Information
Financial, Cost & pricing, market analyses or forecasts Customer lists Business relationships Business opportunities Marketing and advertising plans Personnel information
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Anything You Agree to Keep Secret
• Confidentiality agreements
– Internally with employees – Externally with service providers, competitors, joint venturers and the like
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Negotiated vs. Mediated Settlement Discussions
settlement negotiations with or without the assistance of a neutral third party such as a judge mediated negotiations with the assistance of a mediator
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Common Protections for Confidential Settlement Communications
• Evidence of an offer to compromise a dispute and statements made during attempts to compromise are inadmissible in evidence to prove liability • They ARE admissible to prove the terms and conditions of the agreement reached
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Enforcing Agreements Reached During MSC’s
Enforcement by Way of Motion agreement reached during pending litigation written stipulation (by the parties) to settle case; or Oral stipulation (by the parties) to settle in the presence of the court If parties request, Court may retain jurisdiction to enforce settlement until fully performed.
Will summarily enforce it by way of motion.
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• Prohibits – mediator & participants – from revealing any mediation communication • Bars admission of – anything said – any writing • Made for the purpose of, in the course of or pursuant to the mediation OR a mediation consultation
Confidentiality in Mediation (California)
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Why Confidentiality Important in Mediated Negotiations
Ideology Fairness Efficacy Efficiency
Neutrality
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Is Mediated Negotiation a Refuge for Scoundrels?
Insurance bad faith Evidence fabricated Consent obtained by fraud or duress
BAD FAITH INSURANCE PRACTICES http://www.negotiationlawblog.com/MediationPrivInsuranceCoverage.pdf THE DEVELOPING CASE LAW ON MEDIATION Disputing Irony: A Systematic Look at Litigation About Mediation
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Deceptive Practices by Parties to Mediation
See Robert A. Steinberg’s Calling the Bluff
•Bottom line •Legal positions •Factual support for legal positions •Reasons for negotiation position •Party interests, needs •Authority given to negotiator •Need to seek greater authority
url for Steinberg article: http://www.lacba.org/showpage.cfm?pageid=8580
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lawyer shall not knowingly
make false statements of material fact or law fail to disclose material facts when necessary to avoid assisting a criminal or fraudulent act
What About Us? ABA Model Rules
posturing or exaggeration
Statements regarding a party's
negotiating goals or its willingness to compromise, as well as statements that can fairly be characterized as negotiation ‘puffing,'
ordinarily are not considered ‘false statements of material fact ‘within the meaning of the Model Rules.
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ABA Advice
O.K. to understate willingness to make concessions exaggerate strengths; minimize weaknesses make estimates of price or value intentions re acceptable settlement withhold existence of an insurance policy—unless required by law fail to correct the other party's misunderstanding, based on information from third parties, of the finances of the lawyer's client.
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An attorney should avoid negotiating tactics that are • abusive • not made in good faith • threaten inappropriate legal action • not true • set arbitrary deadlines • intended solely to gain an unfair advantage or take unfair advantage of a superior bargaining position; or • do not accurately reflect the client's wishes or previous oral agreements.
California Attorney Guidelines of Civility and Professionalism
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Deceptive Practices by Mediator?
• separate caucus communications inherently deceptive • mediator “telegraphing” confidential party positions to other side • mediator “predictions” as to: •other side’s settlement authority •other side’s ability to pay •other side’s evidence or legal positions
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Best Practice
• Agree to scope of mediation and settlement communication confidentiality protection prior to settlement conference or mediation
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