Negotiator’s Duties to Others – Model Rule 4.3

Thus far we have addressed Model Rules which involve negotiations with parties who are represented by counsel. While most negotiations stemming from litigation will likely involve opposing counsel, some will not. In addition, negotiation in matters which do not stem from lawsuits might also sometimes involve a party who is not represented by counsel. Model Rule 4.3 addresses just these situations.

EXAMPLE (1): Nat, a landlord, sues Lisa, his tenant, for nonpayment of rent and other breaches of the lease agreement. In their state, in all such lawsuits where the amount of damages sought is less than $5,000, the case goes to Landlord - Tenant Court, where it is common for litigants to represent themselves in the relatively informal proceedings. Nat, however, hires himself a high-priced big-city attorney, Arnie, to handle the suit. The morning the case is scheduled to be heard, Arnie runs into Lisa in the hallway outside the courtroom and says, “Listen. I know you’re here by yourself, and I just want what’s best for everyone here. You’re likely going to lose this case and get evicted if we go in there. However, if you agree to pay the back rent, my client is willing to waive rent for next month and give you some time to find a new place. Whad’ya say?”

Most people’s gut reaction to this would be that Arnie has done nothing wrong. While he may have overemphasized the strength of his case, he was neither forceful nor intimidating. The threshold for Rule 4.3, however, is far below “intimidating.” The very fact that Lisa might misinterpret Arnie as being a disinterested party makes him liable for a Rule 4.3 violation.

This does not mean, of course that Arnie cannot communicate with Lisa at all outside the courtroom. That would make exchanging information impossible and would also prevent any chance of negotiating a settlement. Comment 1 to Rule 4.3 tells us that:

An unrepresented person, particularly one not experienced in dealing with legal matters, might assume that a lawyer is disinterested in loyalties or is a disinterested authority on the law [so a lawyer should] identify the lawyer’s client and, where necessary, explain that the client has interests opposed to those of the unrepresented person.

And Comment 2 explicitly notes that:

This Rule does not prohibit a lawyer from negotiating the terms of a transaction or settling a dispute with an unrepresented person. So long as the lawyer has explained that the lawyer represents an adverse party

This tells us precisely what Arnie should say when he first speaks with Lisa:

EXAMPLE (2): “Lisa, I want to talk to you about settling this lawsuit, but first you need to understand that I represent Nat in this case and that you should strongly consider getting yourself a lawyer. While I would like to see this matter come to an amicable end for all involved, my ultimate loyalty is to my client. That said, I think you’re likely going to lose this case and get evicted if we go in there. However, if you agree to pay the back rent, my client is willing to waive rent for next month and give you some time to find a new place. Whad’ya say?”

This is probably permissible. Even with the disclaimer, however, Arnie must be careful not to inadvertently give Lisa legal advice, as that too would violate Rule 4.3.

EXAMPLE (3): Suppose Arnie said, “I think you’re likely going to lose this case and get evicted if we go in there. Your best legal option is to agree to pay the back rent. My client would then be willing to waive rent for next month and give you some time to find a new place. Whad’ya say?” This may very well be a violation of Rule 4.3, see People v. Mascarenas, 99 P.3d 602 (Supreme Court of Colorado, 2004). (Relying on the comments to the Model Rule, the court found that stating to an unrepresented party with interests potentially adverse to the client that documents were ”legal” and “ok” constitutes giving legal advice in violation of Colorado’s Rule 4.3.)

With so many ways to run afoul of the Model Rules, attorneys and legal assistants must be very cautious in how we go about conducting negotiations on behalf of our clients. After all, reaching the best settlement in the world is of no use if the agreement is invalidated because legal professionals violated the Rules in procuring the other side’s agreement.