Articles

EMERGING ETHICAL ISSUES IN ADR: DOES A LAWYER HAVE A DUTY TO ADVISE CLIENTS OF MEDIATION? (BY THOMAS W. CROCKETT, MISSISSIPPI LAWYER MAGAZINE) - JANUARY 2002

The purpose of this article is not to urge that lawyers have a duty to advise clients about the availability of mediation, and certainly not to advocate that such a duty should be imposed on lawyers. (We lawyers have enough rules as it is.) The purpose is to raise some issues worth considering that could arise in our litigation practice. It will come as no surprise to learn that respected authorities argue on both sides of this issue⁽¹⁾. No definitive answer has emerged⁽²⁾. This article will suggest that, whether or not we face bar discipline or liability for failure to so advise our client, prudent litigators should at least consider the ethical and malpractice implications of failing to advise our clients about mediation.

This article focuses on mediation, because it is generally accepted as a proven procedure for obtaining a quick, relatively inexpensive and satisfactory result in many disputes⁽³⁾. Federal and state courts and many administrative agencies encourage it, and some judicial districts in Mississippi require mediation before a case will receive a trial setting.

Does this increased acceptance and use of mediation impose an ethical duty on lawyers to advise their clients of its availability? The Mississippi Rules of Professional Conduct (MRPC) offer guidance, but no answer. Rule 1.2 provides that a lawyer shall consult with the client as to the means by which the client's objectives of representation ought to be pursued. Rule 1.4(b) requires the lawyer to explain a matter to the extent "reasonably necessary to permit the client to make informed decisions regarding the representation", and Rule 3.2 requires the lawyer to "make reasonable efforts to expedite litigation consistent with the interest of the client." While we in Mississippi are probably not there yet, as mediation becomes more prevalent and accepted, these rules, especially Rule 1.4(b), could be construed to hold that under certain factual situations the lawyer may be guilty of an ethical violation for failing to advise a client of the possibility of mediation.

The ABA's Ethics 2000 Commission (E2K) provides some, but not much, guidance on this issue. Efforts were made to include more guidance on the ethical aspects of ADR in general, but E2K pretty well left mediation alone. It had bigger fish to fry. Comment 5, however, of proposed Rule 2.1 does provide when a matter is likely to involve litigation, it may be necessary under Rule 1.4 to inform the client of forms of dispute resolution that might constitute reasonable alternatives to litigation⁽⁴⁾.

Even if the ethical problem is not serious, we are still faced with the possibility of a malpractice claim⁽⁵⁾. This could be a serious problem. The Mississippi Supreme Court held that a lawyer could be liable for the return of fees where he had violated the common law duty as set out in the proposed Restatement of the Law Governing Lawyers, §28(1) to "act in a manner reasonably calculated to reach a client's objective, as defined by the client after disclosure and consultation. . ."⁽⁶⁾ This decision is important because, to obtain a return of fees, the client did not have to prove that the outcome would have been different in the absence of the lawyer's breach of duty.

The MRPC may also have a bearing. The MRPC preamble provides that a violation of a rule does not give rise to a cause of action nor create a presumption that a legal duty has been breached, the principles embodied in these rules may be relevant in malpractice cases. The Supreme Court has stated "These Professional Code statements [rules as to conflict of interest] are distilled principles of ancient time honored and judicially enforced conduct on the part of lawyers in representing clients."⁽⁷⁾

Both ethics and negligence rules require some degree of a duty to fully advise our clients on some matters before we take action. But which ones? We make a myriad of decisions without consulting our clients: Jury or non-jury, federal or state court, which venue, and on and on. Why is the decision whether or not to mediate different? The problem lies in the apparent built-in conflict of interest of losing a large fee by early settlement. A client who has paid large fees and later becomes aware of the possibilities of mediation may well make a dangerous plaintiff. What would happen if a client expended a large amount in discovery without being advised of mediation; and when the Court orders mediation, the case promptly settles? Also, the unfortunate (deplorable?) practice of some clients of having their legal bills audited by third parties might also lead to demands for refunds if the client was not advised of the possibility of mediation.

Everything considered, discretion may well be the better part of valor. After all, who enjoys defending ethics complaints or malpractice suits even they prevail? It would seem prudent, therefore, before undertaking expensive litigation, to advise clients of the mediation option. And, of course, be able to prove that you did so.

To give this advice the litigator must become familiar with mediation and its pros and cons. A written handout explaining this procedure would obviously be helpful. Would this boilerplate explanation be sufficient? Who knows? We can learn from the informed consent practices of the medical profession. Of course, the problem here is how detailed the explanation must be, and whether it should be given in each case. Doing this every time and in detail could add significantly to the cost to the clients.

Conclusion

A failure to advise of the mediation option may result in civil liability and is less likely to result in disciplinary action, but it could result in having to defend an ethics complaint or malpractice suit. Beyond this issue, however, a larger issue looms. Do we want to measure our performance as lawyers only by the minimum requirements imposed by third parties; or do we want to give our clients the best possible advice on how to resolve their disputes, even if it costs us a chance to earn large fees? Can our clients afford the extra cost this explanation would take? Can we afford not to give it? Think about it.

Thomas W. Crockett, is a shareholder of Watkins Ludlam Winter & Stennis, P. A. in the Jackson, Mississippi office. He is Co-Chair of the Mississippi Bar ADR Section Committee on Ethics Rules.

ENDNOTES

• 1. See Frank E. A. Sanders. Should There be a Duty to Advise of ADR Options. Yes, as an aid to clients? Yes. 76 A.B.A. Journal 50 (November 1990). Michael L. Prigoff, No: An Unreasonable Burden, 76 ABA Journal 50 (November 1990).
• 2. Marshall J. Burger, Should an Attorney be Required to Advise a Client of ADR Options? 13 Geo. J. of Legal Ethics, 427. (Spring 2000)
• 3. Jacqueline M. Nolan-Haley, Lawyer, Clients and Mediation, 73 Notre Dome L. Rev. 1369 (1998).
• 4. For a thorough discussion of the impact of Ethics 2000 on the regulation of lawyers in ADR proceedings, see Douglas Yarn and Wayne Thorpe. "Ethics 2000," ABA Dispute Resolution Magazine, Spring 2001, p. 3.
• 5. See Burger op. cit. 447. "The real risk for an attorney who fails to advise clients about ADR options is a possibility of a malpractice claim."
• 6. Singleton v. Stegall, 580 So.2d 1242, 1245 (Miss. 1991).
• 7. Hartford Accident and Indemnity Company v. Foster, 528 So.2d 255, 269 (Miss. 1988).