Looking to Alberta for guidance.

by Walter Rilkoff and Amir Ghahreman

While lawyers are commonly engaged in negotiations, the B.C. Code of Professional Conduct (“B.C. Code”) does not directly address the ethics of negotiation. Rather, they are covered by general principles that apply to any conduct in a lawyer’s practice.

Alberta has chosen a different route and codified negotiation ethics in its Code of Professional Conduct (“Alberta Code”) at Chapter 11. While we do not propose to pass judgment on the relative merits of each approach, one advantage of Alberta’s model is that it draws one to consider particular issues that may arise before they come up in the heat of actual negotiations.

Alberta identifies two aspects to negotiation ethics: the required conduct of the lawyer with respect to the lawyer’s own actions, and the required actions of the lawyer upon certain conduct by the client or its allies.

The B.C. Code addresses lawyers’ ethical behaviour in Chapter 1, Rule 1 which requires good faith conduct toward other lawyers and Chapter 2, Rule 1 which prohibits dishonourable or questionable conduct that casts doubt on a lawyer’s professional integrity. Clearly the B.C. Code would prohibit lying to or misleading another lawyer, although the boundaries of unethical conduct are less clear.

The Alberta Code is more specific and states in Chapter 11, Rule 1 that “[a] Lawyer must not lie to or mislead an opposing party.”

However, the situation under the B.C. Code becomes murkier when a representation previously made is no longer true. Under the B.C. Code, it is less clear that a lawyer has a positive duty to correct the earlier statement.

The Alberta Code addresses this in Chapter 11, Rule 2, which states that if a lawyer, his or her client or someone allied with the client has misled an opposing party, or if a material representation previously made to an opposing party is no longer accurate, then “the lawyer must immediately correct the resulting misapprehension on the part of the opposing party,” although this is expressly subject to confidentiality duties. This rather onerous duty is tempered somewhat by the Commentary to the Alberta Code which explains that this may only require advising the opposing party not to rely on the previous information, rather than having to provide new information. An Alberta lawyer would have to seek the client’s consent to disclose information necessary to comply with the lawyer’s ethical negotiation duties, and to withdraw if that consent is not given.

Under the B.C. Code, lawyers should take steps to correct any misapprehension caused by their own conduct, and should do so immediately. As for client conduct, Chapter 4, Rule 6 of the B.C. Code provides that “[a] Lawyer must not engage in any activity that the lawyer knows or ought to know assists in or encourages any dishonesty…,” and it is likely that “dishonesty” includes a material misstatement by the client. Accordingly, a B.C. lawyer should take the same steps as an Alberta lawyer and seek consent to correct the misapprehension – but would the B.C. Code require the lawyer to do so “immediately” as in Alberta? Under the B.C. Code’s more general approach, that would depend on the particular circumstances – such as the degree of the misstatement. As in Alberta, the B.C. lawyer would have to withdraw if that consent is withheld.

We hope to address other specific examples of negotiation ethics as well as other ethical issues in future issues.

Walter Rilkoff and Amir Ghahreman wish to thank Sarah Glickman (Summer Student) for research assistance.

This article was published in the August 2009 issue of BarTalk. © 2009 The Canadian Bar Association. All rights reserved.