Proposed Formal Opinion Interim No. 12-0007 (Puffing in Negotiations)
PLEASE
NOTE: Publication for public comment is not, and shall not, be construed as a
recommendation or approval by the Board of Trustees of the materials published
SUBJECT:
Proposed Formal Opinion Interim
No. 12-0007 (Puffing in Negotiations).
BACKGROUND:
The State Bar Standing Committee on Professional
Responsibility and Conduct (COPRAC) is charged with the task of issuing advisory
opinions on the ethical propriety of hypothetical attorney conduct. In
accordance with Tab 19, Article 2, Section 6(g) (as modified by Tab 12, Title
1, Division 2, Rule 1.10) of the State Bar Board Book, the Committee shall
publish proposed formal opinions for public comment.
DISCUSSION/PROPOSAL:
Proposed Formal Opinion Interim No. 12‑0007 considers:
When an attorney is engaged in negotiations on behalf of a client, are there
ethical limitations on the statements the attorney may make to third parties,
including statements that may be considered “puffing” or posturing?
The
opinion interprets rule 3-700(B)(2) of the Rules of Professional Conduct of the
State Bar of California; and Business and Professions Code sections 6068(b),
(c), and (d), 6106 and 6128.
The
opinion digest states: Statements made by counsel during the course of
negotiations are subject to those rules prohibiting an attorney from engaging
in dishonesty, deceit or collusion. Thus, it is improper for an attorney to
make false statements of fact or implicit misrepresentations of material fact
during negotiations. However, puffery and posturing, such as statements about
a party’s negotiating goals or willingness to compromise, are generally
permissible because they are not considered statements of fact.
At
its January 24, 2014 meeting and in accordance with its Rules of Procedure, the
State Bar Standing Committee on Professional Responsibility and Conduct
tentatively approved Proposed Formal Opinion Interim No. 12‑0007 for a 90‑day
public comment distribution. Subsequently, at its June 5, 2015 meeting, COPRAC
revised the opinion in response to public comments received and, in further
accordance with its Rules of Procedure, tentatively approved Proposed Formal
Opinion Interim No. 12-0007
for an additional 90-day public comment distribution.
State Bar Standing Committee on
Professional Responsibility and Conduct
DEADLINE:
5 p.m., September 23, 2015
DIRECT COMMENTS TO:
Angela Marlaud
Office of Professional
Competence, Planning and Development
State Bar of California
180 Howard Street
San Francisco, CA
94105-1639
Ph. # (415) 538-2116
Fax # (415) 538-2171
E-mail: angela.marlaud@calbar.ca.gov
