The truth about honesty and candour in mediation: what the tribunal left unsaid in Mullins' case.

• Jurisdiction: Australia
• Author: Wolski, Bobette
• Date: 01 August 2012

[Some commentators have suggested that, as a result of the decision in Legal Services Commissioner v Mullins, legal representatives owe different standards of honesty and candour in mediation from that which they owe in litigation. This article challenges that proposition. The author argues that legal representatives owe exactly the same standards irrespective of whether they are acting in mediation or in litigation. The decision in Mullins did not change the law in this respect. In fact, the Tribunal did no more than iterate the existing law governing relations between legal representatives and their opponents. As to the duties owed by legal representatives to mediators, the case provides no insight at all. There is also a dearth of literature on the topic. The purpose of this article is to provide some insights on the duties of honesty and candour owed by legal representatives for parties in mediation.]

CONTENTS I Introduction II The General Duties Owed by Legal Representatives in Mediation III Current Requirements in Relation to Honesty and Candour A Professional Conduct Rules B Other Components of the Law of Lawyering IV The Impact of Other Obligations Owed by Lawyers A The Question of Good Faith Participation 1 Professional Conduct Rules 2 Other Components of the Law of Lawyering B Requirements in Relation to Cooperation 1 Professional Conduct Rules 2 Other Components of the Law of Lawyering C Requirements in Relation to Fairness 1 Professional Conduct Rules 2 Other Components of the Law of Lawyering V Lawyer Independence as against Client Authority: Resolution of Conflicting Duties VI Mullins and Garrett Revisited VII Conclusion and Directions for Further Research and Analysis I INTRODUCTION

The case of Legal Services Commissioner v Mullins ('Mullins') (1) has been discussed in numerous articles, commentaries, case notes and texts. (2) The facts of the case are reasonably well-known, at least in mediation circles: in the mediation of a claim for damages for personal injuries, the plaintiff's barrister (Mullins) failed to disclose to the defendant and its insurer that the plaintiff had been diagnosed with terminal cancer subsequent to the preparation and exchange of expert reports detailing the plaintiff's assumed life expectancy. Estimates of losses and future care needs were based on that assumption. The defendant settled in ignorance of the plaintiff's cancer diagnosis and on the basis of the inaccurate reports. Mullins was found to have intentionally and fraudulently deceived his opponent and was fined for professional misconduct. It is less well-known that the instructing solicitor in the matter, Mr Garrett, was similarly dealt with by the Legal Practice Tribunal several years later. (3) Following from the decision in Mullins, it has been suggested that '[t]he obligation of truthfulness in a mediation context is different from that required in litigation and negotiation'; (4) that legal representatives have a positive obligation to disclose the relevant facts during a mediation; (5) and that they have a duty 'to be forthright and honest' (6) when mediating. In the author's opinion, Mullins is not authority for these propositions. Currently, legal representatives in Australia owe exactly the same obligations of honesty and candour in mediation (7) as they owe in litigation; in neither context do they owe a general duty to be candid, open or forthright.

This article seeks to answer the following related questions:

1 Are legal representatives in Australia required to be honest and candid in mediation and, if so, what are the appropriate standards of honesty and candour required of them?

2 If these duties exist, to whom are they owed?

3 When should these duties, if they exist, supersede or conversely give way to the duties owed to a client?

These questions highlight three preliminary points that are central to an understanding of the disclosure obligations of legal representatives in mediation (and in any other context). First, the issue of disclosure of information itself raises two issues: those of honesty as against misrepresentation (an issue that concerns the accuracy of information conveyed), and openness or candour as against non-disclosure (an issue that concerns the sharing of information or, conversely, the withholding of it). (8) While these issues may intersect (as misrepresentation can occur because of non-disclosure of information), they involve separate obligations on the part of lawyers. Second, legal representatives may owe different standards of honesty and candour to the different entities involved in mediation. Third, legal representatives are subject to a range of duties that can, at times, come into conflict.

The article is divided into seven parts. In Part II, the general duties owed by legal representatives in mediation in Australia and the sources of those duties are examined. Part III focuses on a lawyer's obligations to be honest and candid in his or her dealings with the court, mediators and other parties. Part IV examines the impact of other duties owed by lawyers, such as the duty to act in good faith and the duty to act 'fairly' to an opponent, on the issue of disclosure. Part V addresses the question of lawyer independence as against client authority when lawyers are faced with conflicting duties. In each part, the analysis proceeds by examining the rules of professional conduct, followed by other components of the law of lawyering. The focus of the discussion is on the professional conduct rules. The article does not examine additional obligations that may be agreed to by the parties and their lawyers by virtue of an agreement to mediate or some other dispute resolution clause.

The cases of Mullins and Legal Services Commissioner v Garrett ('Garrett') (9) are revisited in Part VI. On the topic of the disclosure obligations owed by lawyers, the Tribunal left much unsaid--it relied on the existing law governing relations between legal representatives and their opponents and provided no insight into the duties owed by legal representatives to mediators. Aside from the publications generated in the wake of Mullins, the literature in Australia is also largely silent on the nature of the ethical duties owed by legal representatives in mediation (with the focus to date being on the ethical position of mediators). More attention has been given to the topic in the United States of America, and for that reason the analysis undertaken in the article relies to some extent on cases and commentaries from the United States. The article concludes by suggesting some directions for further research and analysis with respect to the legal professions rules of conduct and mediation.

Throughout the article, the terms 'legal representative', 'legal practitioner' and 'lawyer' are used interchangeably.

II THE GENERAL DUTIES OWED BY LEGAL REPRESENTATIVES IN MEDIATION

While there has been some debate about whether or not mediators are engaged in the practice of the law, (10) there is no doubt that a lawyer enters into a lawyer-client relationship and practises law when he or she represents a client in mediation. (11) Consequently, the conduct of legal representatives in mediation is governed by the law of lawyering, that is, relevant portions of the law of contract, torts and equity, procedural law, general legislation, (12) the legal profession legislation, (13) specific statutory directives to mediate, together with the rules of conduct promulgated by state and territory law societies and bar associations. (14) In most jurisdictions in Australia, relevant professional bodies have adopted (or are in the process of adopting) the new National Conduct Rules that were recently approved by the Law Council of Australia ('LCA') and the Australian Bar Association as a result of the National Legal Profession Reform Project. (15)

Law societies and bar associations in Australia have not promulgated additional or supplementary rules to govern their members' conduct when they are acting as legal representatives in mediation. However, one accommodation for mediation has been made in the professional conduct rules in Australia: 'court' has been defined to include 'mediations'. (16) As will be discussed later in the article, the exact meaning of this reference is unclear.

Some non-binding 'guidelines' for legal representatives in mediation have emerged. For example, the LCA published Guidelines for Lawyers in Mediation in March 200717 and the Law Society of New South Wales published its Professional Standards for Legal Representatives in a Mediation in January 2008. (18) These guidelines may have some influence on legal practitioners (and on disciplinary bodies charged with assessing complaints about unprofessional conduct). (19)

From these various sources, a range of duties--which are not necessarily of equal weight--are imposed on legal practitioners. (20) Of paramount importance is the practitioner's duty to the court and the administration of justice. (21) As an aspect of the duty to the administration of justice, legal practitioners must respect, obey and uphold the law. (22) They must not engage in, or assist, conduct that is dishonest or otherwise discreditable to a practitioner or prejudicial to the administration of justice or which might otherwise bring the legal profession into disrepute. (23)

Legal practitioners owe a range of duties to their clients such as those of honesty, (24) competence and diligence, (25) loyalty, (26) and confidentiality. (27) The scope of the duty of confidentiality depends on the source to which it is traced (28) but it is generally 'very broad'. (29) Under the rules for solicitors, it extends to 'any information which is confidential to a client and acquired by the solicitor during the client's engagement', (30) while the rules for barristers refer to 'confidential information obtained by the barrister in the course of practice concerning' the person to whom...