Sandra Mazer Moss

Ethical behavior is nothing new and does not have to be reinvented as it is always "in style." However, in the olden days, when I was practicing law for the first time and even later when I was on the bench, we took ethical behavior for granted. We never really talked about it. You were supposed to be ethical in the practice of law and so you were—or at least you pretended to be. Today there is more of a focus on examining attorney behavior during discovery, in the courtroom and at mediation analyzing whether behavior, while entirely legal, can still present ethical problems.

So I decided to look at mediation and some ethical dilemmas that may face litigants, attorneys and mediators during the settlement process. Given confidentiality and privacy constraints, I am going to present some real scenarios with enough facts changed (as they say on TV) "to protect the innocent," but still highlight the ethical conundrum.

Scenario No. 1:  A mediator is reading a police accident report and notices the accident time is reported as 5 p.m. Yet, in both the plaintiff's and defendant's mediation memoranda, the time reported on arrival at the emergency room is 7 p.m. A two-hour variation could have made a huge difference in the lighting, visibility and traffic conditions in the subject intersection.

Should the mediator assume it is a typo and go forward on the premise that both lawyers could not be wrong? That way the mediation could proceed without any distractions. Or, should the mediator bring the discrepancy to the attorneys' attention, which may open up a "can of worms," if the parties' memories start to change? When confronted with a similar issue, I opted to call it to counsel's attention prior to the mediation. After some investigation and rechecking of the police and hospital ER records, it turned out that the police vehicle made an "unscheduled" stop at a pizza establishment, with the plaintiff inside, which accounted for the delay in arriving at the ER. While this development called for a short continuance, as plaintiffs and defense counsel decided whether to join the police department as a defendant, the parties ultimately decided to leave well enough alone. The case went to mediation and was settled with the caveat that the defendants had the option to seek contribution if they decided it was appropriate.

Scenario No. 2:  Defense counsel tells the mediator he has $200,000 in authority to settle the case but would like to settle for under the $200,000, if possible. Thus, defense counsel wants to offer $180,000. While this may be a good idea for the defendant, it puts the mediator in a difficult position, particularly if plaintiffs counsel has already shared that they would not "take a penny under $200,000." How can the mediator go back to plaintiffs counsel with an $180,000 offer knowing the defendant has $20,000 in reserve?

First, defense counsel should not have shared the fact that his total authority was $200,000. As one of my colleagues is so fond of saying: "If you ask an attorney what he will accept in settlement or what he has in settlement authority, you will make both of them suborn perjury."

Defense counsel could have honestly said: "The most I am willing to offer now is $180,000." The mediator may assume he actually has $200,000 in authority and may be able to get the parties to compromise on a final settlement of $190,000.

However, if defense counsel shares the $200,000 figure and the mediator knows the plaintiff will take $200,000, then the mediator may have to tell defense counsel he cannot go back with a figure lower than $200,000 since he now knows $200,000 is available. It is possible that the mediator could tell plaintiffs counsel: "Defense counsel is only willing to offer $180,000 at this time" and hope for the best. With any luck, plaintiffs counsel will offer to split the difference at $190,000 and the mediator will be able to settle the case without further discussion. However, that would be walking very close to the ethical line.

A worse scenario is if plaintiffs counsel says: "My client really wants $200,000 but if that is all defense counsel has, then we will accept the $180,000. Then the mediator may be in a difficult spot knowing that is not all defense counsel has in authority.

Scenario No. 3:  A plaintiff claims in a medical malpractice lawsuit that he cannot walk without a walker as his back has been damaged beyond repair. Defendants have taken surveillance videos that show a shocking scenario. They send it to the mediator, in camera and confidential. The plaintiff is seen driving his car and striking the rear of the car in front of him. He leaps from his car, waving his arms wildly, and runs to the driver's side of the other car as the other driver exits his car. The plaintiff continues to wave his arms and pace back and forth in anger for several more minutes as insurance information is presumably exchanged. Finally, the drivers go their separate ways. Since the plaintiff has consistently pleaded and testified at deposition to total inability to walk without assistance, this video could be extremely damaging to his case. However, the defense does not want to share the video yet as discovery is still ongoing and they want to hold it until the plaintiff's case is closed.

What does the mediator do? The video has certainly changed the mediator's view of the plaintiff's damages. However, he cannot share this information with plaintiff's counsel, which certainly presents an impediment to negotiations.

First, the mediator could encourage the defense to rethink its position as disclosure of the video could bring the plaintiff to a more meaningful settlement demand rather quickly. If the defendants are still insistent on keeping the video confidential, then the mediator can ask defense counsel if he could tell plaintiffs counsel that there is information in his possession that could be potentially damaging to the plaintiff but he is not at liberty to disclose same. However, said information could seriously affect the settlement value of the case. If the mediator has established a rapport with plaintiffs counsel and counsel trusts the mediator's judgment, then that disclosure could jump-start negotiations in a more reasonable range.

However, if defense counsel is unwilling to allow the mediator to even disclose the existence of potentially damaging information, then perhaps the mediator needs to suggest it may be premature for the parties to engage in meaningful negotiations and a better option may be to wait until after discovery concludes and expert reports are exchanged.

These three scenarios should be helpful in giving counsel a "head's up" on some ethical obstacles that might block the path to settlement and ways in which these pitfalls could be avoided on the often rocky road to resolution.

Sandra Mazer Moss, retired, served on the bench as a trial judge, judicial team leader, and most notably, was the founder and first supervising judge of the Complex Litigation Center. She now works as a distinguished neutral for The Dispute Resolution Institute.