Full access to Episode 88

You can only access one full episode for free on the trial subscription.

For full access to Episode 88, please confirm your selection below.

Processing request...

Full access to Episode 88

You can only access 10 episodes with the 10-click package.

For full access to Episode 88, please confirm your selection below.

Processing request...

Episode image for Vae Victis? Rethinking the Value of Absolute Victory in the Practice of Law
LOADING ...
Preview of episode

Want to listen to the full episode and all our other episodes?

Hearsay allows you to fulfill your legal CPD requirements every year.

Our yearly subscription is only $299/year.

With a yearly subscription, you can access all of our episodes AND every episode we release over the next year.

Episode 88 Buy Episode

Vae Victis? Rethinking the Value of Absolute Victory in the Practice of Law

Law as stated: 9 June 2023 What is this? This episode was published and is accurate as at this date.
Steve Mark AM, the inaugural New South Wales Legal Services Commissioner, joins David in Curiosity to posit the question of whether we need to rethink our duty to our clients. Touching on lawyers as gladiators vs problem solvers, positions vs interests in negotiation, and how not to massacre Fisher's orange.
Ethics and Professional Responsibility Ethics and Professional Responsibility
Professional Skills Professional Skills
9 June 2023
Steve Mark
Steve Mark AM
1 hour = 1 CPD point
How does it work?
What area(s) of law does this episode consider?The ethics of victory and determining what’s in a client’s best interest.
Why is this topic relevant?The traditional theory of the role of lawyers can be encapsulated in the idea of the “adversarial advocate”. This adversarial advocate is mollified only by a duty to the court and the law, and is otherwise free – and perhaps obligated – to vigorously pursue the client’s legal interests.

One common assumption is that this duty to the client requires the maximisation of all of the client’s legal rights – from the perspective of a typical adversarial advocate anything less than this maximisation is a loss or a failure.

But the traditional adversarial theory of the role of a lawyer doesn’t account for other interests that the client may have – such as preservation of existing relationships, or the broader impact of the client’s actions through their lawyer as agent.

What legislation is considered in this episode?Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (NSW)

Legal Profession Uniform Conduct (Barristers) Rules 2015 (NSW)

What cases are considered in this episode?White Industries (Qld) Pty Ltd v Flower & Hart (A Firm) [1998] FCA 806

  • A developer building a shopping centre was having difficulty paying for construction. The developer sought legal advice seeking to delay payment to White Industries. The advising firm suggested that the developer claim fraud despite no fraud occurring. The Court found that the alleged fraud proceedings had no reasonable likelihood of success and that the firm had abused the court process.

Legal Services Commissioner v Mullins [2006] LPT 012

  • A barrister acted on a motor vehicle compensation claim in which he knew of the client’s cancer diagnosis but failed to disclose this to the insurer. The claim was settled at mediation with no mention of cancer. The barrister was found guilty of professional misconduct for the failure to disclose.
What are the main points?
  • The question of whether law can be a profession when it’s focused on the value of the dollar is not either / or – legal practice can be both.
  • In Steve’s view it’s a question of being both a business and profession and doing both well.
  • Ethics is based on values, not just rules. The question is; what kind of lawyer do you want to be?
  • Lawyers are problem solvers – not gladiators. Law is not just about winning.
  • The adversarial approach to legal practice may be necessary – for example in litigation, but lawyers should prioritise the clients’ best interests over winning.
  • There is sometimes a conflict between following a client’s instructions and acting in their best interest.
  • Steve gives the hypothetical of a young person wanting to be convicted even though they may not necessarily have committed an offence.
  • In negotiation there is often a difference between a position and an interest.
  • This is clearly illustrated in the Fisher example of two sides negotiating for the world’s last orange. The position is “I need the orange” and the interest is that “I just need a certain part of the orange”.
  • Case law is replete with examples where lawyers have crossed ethical lines in pursuit of winning, such as bringing an action with no reasonable likelihood of success or withholding relevant information during negotiation.
  • The Mullins decision is a good example of this. This was where a barrister failed to disclose his client’s cancer diagnosis during mediation, leading to a fine for professional misconduct as the diagnosis impacted the life expectancy calculation.
  • The importance of trust in the legal profession is paramount, especially in light of the declining levels of trust in society.
  • Steve raised First Nations law and how disputes are resolved through affiliation and relationships rather than adversarial advocacy.
  • Indigenous law offers an interesting perspective on negotiation, where greed and narcissism are considered major sins as they lead people to take more than they need or believe they deserve more than others.
  • If disputes cannot be resolved, a ceremonial fight may occur where men fight with stone knives, but strict rules apply such as only being allowed to cut on certain body parts
  • The winner must also be cut in the same way as the loser to prevent grudges. The concept behind this is that if one person is hurt, it ultimately hurts both parties.
What are the practical takeaways?
  • Building strong client relationships is crucial.
  • Building a relationship of trust with clients requires a deep understanding of their objectives and interests, which can be achieved by asking questions and actively listening to their responses.
  • Lawyers are problem solvers, not gladiators. Understanding the rules and exploring alternative approaches to litigation, such as negotiation and mediation, is important.
  • Really knowing your client can assist in negotiating from a position of interest rather than from a position.
  • Negotiators must still abide by the rules to avoid consequences such as in the Mullins decision.
  • Do not assume authority or status based on information asymmetry with clients.
Show notes

David Turner = DT; Steve Mark = SM; Ross Davis = RD

00:00:00David Turner:Hello and welcome to Hearsay the Legal Podcast, a CPD podcast that allows Australian lawyers to earn their CPD points on the go and at a time that suits them. I’m your host David Turner. Hearsay the Legal Podcast is proudly supported by Lext Australia. Lext’s mission is to improve user experiences in the law and legal services and Hearsay the Legal Podcast is how we’re improving the experience of CPD. Now, the conventional wisdom about the role of lawyers is that we are “adversarial advocates”, and this adversarial approach to advocacy is perhaps mollified only by a duty to the court and to the administration of justice, and we’re otherwise free, maybe even obligated, to vigorously pursue our client’s interests above all else. Now, one assumption that maybe arises out of this is that this duty to the client requires the maximisation of all of the client’s legal rights and interests from the perspective of a typical adversarial advocate – anything less than this is a loss or a failure. But this traditional approach to the role of the lawyer as the adversarial advocate doesn’t account for other interests that the client might have – maybe preserving existing relationships with the other parties to a dispute or the broader impact of the client’s actions through their lawyer as agent on the community and broader society. So how should we define what a client’s best interests really even are? And what exactly is or should be a lawyer’s duty in an adversarial negotiation or trial? If it’s not to win, what is it and how does that play out in negotiation rooms and courtrooms across the country? Joining me today is someone who knows a lot about these questions. He was appointed the inaugural Commissioner of the NSW Office of the Legal Services Commissioner on its establishment in 1994, and was awarded an Order of Australia in 2014 for his contribution to the law, legal regulation, social justice, and indigenous rights – amongst many other notable achievements, he now lectures at the University of New South Wales Law School. Steve, it’s my privilege to welcome you to Hearsay the Legal Podcast.
Steve Mark:Thank you so much. I’m really pleased to be here.
DT:Now, I’ll start with the question I usually ask our guests, although I think some of those listening probably know a lot more about your career than some of our others. What brought you to the law? What brought you to your role as the first ever Legal Services Commissioner and where did that bring you up to today?
SM:It’s a question I often get. I was born in the United States as my accent shows.
DT:I think I picked that one up.
00:02:39SM:I’m sure you did. I’m sure everybody else did too. So my accent was born in California, but it’s since been abused. It’s been in Australia for over 50 years, but it’s also practiced law in the UK and various other places. I went to university in California. I majored in tear gas. I was in the 1960s, so I was demonstrating on just about everything. So I came here after leaving America because of the direction I thought politics were taking in 1972. You can imagine what I think now. But when I came to Australia, my very first job was as a builders labourer here in Sydney and within three months I was a union delegate in the BLF and helped to save The Rocks and various other parts of Sydney. So, it shows my kind of radical bent that used to be when I was a youth. I left Sydney after about a year of that, went and worked in the coal mines in central Queensland and eventually got down to Brisbane where I eventually became a lawyer. I worked as an articled clerk, became a lawyer, worked in law for a few years and eventually went to England, practiced law there for a while, came back to Sydney and in Sydney I got a job initially at a legal centre and did a lot of discrimination law as I had done in the UK. And as a result was headhunted at the Anti-Discrimination Board, became their senior lawyer, eventually became president of the Anti-Discrimination Board and subsequently Legal Services Commissioner. The issue about being Legal Services Commissioner was really a high point in my career, I’ll talk about that throughout the interview, I’m sure, but I left there in 2013, I opened a consultancy with my business partner, Tahlia Gordon, who just got a doctorate by the way, in law. And we went all over the world assisting countries and regulatory systems to redesign themselves in relation to law because of the way I’d regulated the profession as Legal Services Commissioner. It was an extraordinary time – but one of the important things that I learned from being the Commissioner of the OLSC was; “what was my purpose”? My purpose was not just to prosecute more lawyers, which is what everybody wanted me to do – the public, the Attorney-General, the head of the Attorney-General’s Department – all thought that what I was going to do is go out there and prosecute more lawyers. That was not how I saw my role. My purpose as Legal Services Commissioner was to reduce complaints against lawyers. So I needed to work with the profession and the regulators to provide a better service to the community. I thought that was a much stronger role to play.
DT:Prevention over punishment.
SM:Precisely.
DT:It’s so interesting, we could almost digress and have a completely different discussion on a management topic here, really, in terms of what you measure and how that drives performance because you could absolutely say, “well, the Legal Services Commissioner’s performance will be measured on the number of complaints prosecuted“, but I do think – I’m not just pandering here – it’s far wiser to reduce the number of complaints initiated rather than prosecute the number of complaints filed.
00:05:43SM:It actually did cause some controversy within my office because the complaint handlers thought I was doing them out of a job. I don’t think that was ever going to happen. However, one of the things that it did result in is the way that we managed – particularly the introduction of incorporated legal practices in 2000 – and how we helped firms that were becoming incorporated to understand the role of their now directors rather than partners who are now going to be regulated under corporations law as well as legal regulation. The way we had to deal with that was to come up with a mechanism, which has since been known as “ethical infrastructure”, a term coined by a professor Ted Schneyer in America, who spent a lot of time in my office. And what we did with that is work out how to actually assist law firms have management systems which embedded ethical behaviour. Research has shown that system reduced complaint loads by two thirds.
DT:Wow. And in your role, I think I mentioned this in the intro, but you are not only the inaugural Legal Services Commissioner, but the longest serving Legal Services Commissioner. And from 1994 to 2013, an extraordinary change in both the deregulation of law firms and the structure of the regulation of law firms, you would’ve seen an enormous shift. And you’ve just mentioned incorporated legal practices there. What were some of the other changes that you saw over that period in terms of the duties of lawyers and how the profession came up to speed?
SM:One of the big changes in the profession, which has gone far longer than that, quite frankly, it started before I became Commissioner – long before – is the shift between profession and business. It’s been something that many jurists, many people working in the legal profession have commented about over the years. And people often ask me; “well, is law any more a profession? If it’s only focused on the dollar, how could it be a profession?” And I often answer that by saying; “no, it’s not a question of being either/or. It’s a question of being both, but doing both well.” So we have to look after our clients. We have to look after our survival, and we live in a capitalist society, so we need to be successful. However, there is a way to be successful and even more successful by building good client relationships, which is really what ethics is all about.
00:07:58DT:Is this mindset of compromise one you learned in the 60s? It sounds like things have changed a little.
SM:I’ve changed a lot. I still have my political views, which I will not talk about now.
DT:Fair enough.
SM:The thing is, that I think it’s really important that we all know where we came from so that people can judge me themselves rather than me having to judge myself all the time.
DT:Fair enough. Now, you are also a lecturer at UNSW and we were fortunate enough to find you that way, one of our Hearsay team members was a student of yours, and you’ve probably taught ethics and negotiation skills as well, which will come onto a little bit later in the episode to thousands of UNSW students. Normally I ask for the “what’s the one thing we should remember?” at the end of an episode but if there’s one takeaway that you try to give to your students who are studying law as their undergraduate or their Juris Doctor degree, what is it? What’s the thing that we should all remember about ethics, if there’s only one thing to remember?
SM:It’s hard to come up with one. I’ll come up with a kind of associated couple.
DT:Perfect.
SM:The first question I ask my students when they walk in on the first day is; “this is a course to ask you the question, what kind of a lawyer do you want to be”? Are you going to look after yourself, look after your firm, look after your finances, or are you going to look after your clients? Are you going to look after the rule of law? Are you going to just try to collect enough information to be popular at dinner parties? I mean, there’s a whole range of things that one can do. It’s a question of how do you want to practice law? People go through law, and we all know it’s a hard course to get into. It’s a difficult course to pass. But at the same time, once people are through law, they’re all lawyers. It’s how they practice that makes a difference. And indeed, because all our knowledge is in our heads, we don’t have much more to sell. But our belief systems and how we act, building good relationships with clients, for example, is absolutely fundamental. So that’s one thing. The other thing I would want to say is, as you said in your introduction, law is not just about winning, lawyers are problem solvers. They’re not gladiators. We might need to be gladiators at times in certain types of litigation, etc. but we’re problem solving. Litigation can be a way of solving problems, but there are many other ways as well. And the other thing I would like to say is that Solicitor’s and Barrister’s Rules, which is usually the subject that most people ask me about when they’re talking about ethics. And I often say ethics is based on values, not rules.
00:10:31DT:Well, absolutely, I think there’s such a misunderstanding about what ethics really even is. Often we talk about it as “how do I follow the rules”? But ethics is deeper than that.
SM:Much deeper. It’s about your values and it’s about recognising and uncovering for yourself what your values are, which is what we try to do in my ethics course at UNSW. So it’s about you. It’s not about the rules. Of course, we go through the rules and we learn the rules. We don’t have to memorise them. We all know where they are. You don’t have to memorise things. You know where to find them. But to actually understand the rules and then to think about negotiation, mediation, the alternatives to litigation, to be aware of the fact that the rules apply. So if you’re a negotiator, if you’re a lawyer negotiating, actually you’re usually out from under the ambit of a judge or a mediator or whatever. So you can actually probably push the boundaries a little bit, and lawyers can tend to do that in negotiation and go a little bit too far, make some statements that are not based on facts, etc. Exaggerate. The rules apply and you could be caught for that.
00:11:39DT:Absolutely. And I think we’ll talk about some cases, particularly around information asymmetry and the withholding of important information, which often lawyers, especially in a negotiation, are much more comfortable with than outright falsehoods but we’ll get onto that in a moment. I love that idea of what kind of lawyer you want to be, though. I think that’s a great question to ask as we start our journey in the law. And also as we continue it, because I think I’ve probably met one of each of those kinds of lawyers you described. The lawyer who puts the firm first, the lawyer who puts collecting good stories first, and the lawyer who puts their clients first. Of course, it’s a great heuristic for identifying your values and identifying the way you want to ethically approach the law. Now let’s talk a bit more about this idea of the adversarial approach to legal practice. We do have an adversarial system of justice, that’s how the conventional wisdom goes, the best way to arrive at the truth and the best way to balance our client’s interests. And I suppose we often think of that process of negotiation or of dispute resolution as zero sum. Sometimes it’s negative sum in the minds of others, that there’s going to be some value eroded by legal costs and we’re fighting about whatever’s left over, but it can be a positive sum game, can’t it?
SM:Oh, absolutely. And the thing about when I say lawyers are problem solvers, not just winners – there’s an important emphasis on the “just” because we do actually work in a world which is often adversarial and if it is adversarial, your clients always want winning. The problem with that is they often want winning on the wrong thing.
DT:Yeah.
SM:So one of the first and most important things that a person that’s starting in the law should be aware of is your client is bound to come to you and the first question you’re going to ask; “what are you here for? What can I do to help you?” etc. and they will present you with an issue. It is never the right issue. It is never the issue that you’re going to end up with. What you have to do is to find out what the real issues are, and that means going beneath positions to find interests and there’s a way of doing that, which we’ll talk about, I’m sure.
DT:Absolutely. And this idea of positions and interest, if I can give an example that I remember from my days at law school, I’m not sure if you used it in your negotiation skills course as well, but I suspect there’s a possibility. When I was studying law, there was an exercise that we did negotiating over the last orange left in the world. Do you know this one?
00:14:10SM:Yes. Fisher.
DT:Yes. And if those of our listeners who aren’t aware of it, each side has their own set of confidential facts about why they might need the orange. Both are very worthy causes. I think there’s usually one that involves some vaccine, and there’s one that has an equally absurd use for an orange that’s equally meritorious and the parties negotiate over the orange. But the instructions say that you can only do what you need to do with it if you get the whole thing. You can’t just cut it in half. So often the parties to that negotiation end up cutting the orange in half anyway, because they’re instructed to find a compromise. And if you look at those instructions deeply, you see that one only needs the skin and one only needs the flesh and it was actually possible for both parties to get the whole thing the whole time and this is the kind of facile maybe but at a base level distinction between a position and an interest. The position is “I want the orange,” the interest is “I want the flesh of the orange,” or “I want the skin of the orange,” or “I want the resource beneath that position that solves my real problem.
SM:Absolutely. And that very well known scenario of Fisher the mother with the two children that want the orange, one and wants to skin, one that wants the pulp, solves the problem eventually after major disputes between the children, for example, which is kind of the simplified version of what you’re talking about. And at the end of it – the daughter, let’s say – says; “Mum, you really totally get this. You really understand. I get what I want. My brother gets what he wants. We’re both satisfied.” And the brother pipes up and says, “Mother, you totally don’t get it at all. Do you remember the despicable things she was saying to me in the negotiation? Do you remember what she called me? Do you remember the way she’s rolling her eyes right now? She doesn’t deserve anything.” A matter of fact, he grabs the orange, he smashes it on the ground. That’s much more realistic.
DT:Yeah.
SM:So the reality is because you’re talking about what actually builds up to, and what creates the environment within which discussion can occur and which conclusions can be reached, and that’s where the beauty of ethical education lies.
DT:Absolutely. I practiced for over a decade before starting Lext, I don’t think I ever came across a perfect orange situation where the parties could both walk away with exactly what they wanted and make no compromises to their own interests at all.
00:16:28SM:Everybody wanted an apple.
DT:Yeah, that’s right. So now that we’ve given this kind of fictitious hopeful maybe saccharin view of interest based negotiation, what does a real interest based negotiation look like? Because I think sometimes we learn this concept in law school. We understand; “okay, yeah we want to find those underlying interests, we want to dig deeper”. And then it’s harder to see that in practice, it’s harder to find those interests. And often there’s a great deal of pressure, as you say, to follow the position to carry out the instructions that you’ve been given and the path of least resistance is sometimes not to dig any deeper. So can you give me some examples that you might have seen either in your own practice or in the practice of lawyers that you’ve consulted to about successful interest-based negotiations?
SM:Well, let me give you an example, and again, I apologise in advance because I will mention some rules because they’re important to know that we do have rules and they’re often in conflict. And that’s what I want to actually explore with this example. It’s a hypothetical example. I have many real ones, but this is just one I use in my law class a lot about the client’s interest and what is the best interest. Indeed who determines what the client’s best interest is? Is it the client or is it the lawyer? And there’s not much written about that, but that is where the rubber hits the road which… I hate that phrase, but I’ll eliminate it from my lexicon. However, that’s where the real important issue is. So I give this example. You’re a legal aid lawyer and you’re going to court, you’re a duty lawyer that day and you’ve got 20 people that you have to look at, and you’re going to just do pleas. You’re going to be entering pleas of guilty to people who will already decide they want to plead guilty. You don’t know who they are, you’ve never met them before. You’ve got 10 minutes with each to find out what their antecedents are before you go in and do a plea. One of the clients is up for armed robbery. And you are asking him about the antecedents, he was charged with two others in concert. Three of them went into a 7-Eleven store and a gun was produced, food stuffs were taken, etc, etc. And you’re finding out the antecedents this person’s pleading, the other two have already pleaded guilty. And your client says, in talking about the antecedents, they’re a heavy drug user, they’re an alcoholic, often homeless. And a matter of fact, at the time of the actual event of the robbery, he was passed out in the back seat of the vehicle after consuming copious amounts of drugs and alcohol that day. And you’re saying; “but hold on, wait a minute. If you were in the back seat of the car, you didn’t go in, why are you pleading guilty? You’re probably not guilty of the offense of armed robbery.” And the client says; “all my mates have form for armed robbery. I want to go to jail too. For me, I want to become a member of a bikie gang” or “all of my mates – peer group pressure – was for me to get a conviction.” Indigenous kids in Central Australia, almost all of them have a conviction before they’re 15. So it’s an issue of involvement and belonging. Horrible, though I may say an indictment on our entire society, particularly in terms of Indigenous kids, but I’ll come back to that one. And I asked my class that, you know; “what’s in the best interests of the client?”. They said it’s not their best interest to go to jail, but that’s what they want. Rule 8 basically states you must always act on your client’s competent instructions. Those are competent instructions, so you must act on them. Rule 4.1.1 says, you must always act in the best interest of your client. What if you believe it’s not in their best interest, but they do, who’s right? And so when lawyers don’t go through the digging to find out the purpose or the interest behind why the client wants to plead guilty, then we’ll never know. So you have just a choice between 4.1.1 and Rule 8. Do I act on the client’s instructions? Well, that’s what I’m supposed to do. I’ll do it every time.
00:20:24DT:What’s really interesting and evocative about that one, if we can talk more about the rules for a moment, especially for criminal lawyers, I’m not a criminal lawyer, but there are a great many rules and contemplations on those rules about the ethics of entering a plea of not guilty when there’s some awareness that might not be a truthful plea and there are also exhortations in the rules to make your client aware about the benefits of doing that and the utilitarian discounts that might be applied if you do so but there’s considerably less thought given to the alternative scenario that you’ve presented where there’s a willingness to plead guilty, but maybe a real justification not to. It’s an interesting reversal of the kind of traditional scenario that we think about when we think of ethical practice in criminal law.
00:21:08SM:One of the things I say to my students – and I was a criminal lawyer, I started my legal practice as a criminal lawyer – but be that as it may, the way I tell my students a story about exactly this concept is, I say, if you go to a dinner party and you don’t know the people very well, and you’re sitting next to somebody and they say; “what do you do”? And you say; “I’m a criminal lawyer”. It is inevitable that you will be asked the inevitable question; “how could you possibly act for somebody who you know is guilty?”. Which gets back to public perception of lawyers and law, which is so far off of what it really is. That gap will never be bridged. Doesn’t matter how much education we do to the general community, it’s our job to actually convince clients about what we’re doing and why. And basically you can run all your arguments on a pluralist democratic society, everybody deserves a good defence. If I hold myself out to have a particular expertise in a particular matter, it’s incumbent upon me to act, blah, blah, blah, blah, blah. Ethics 1A, that’s not real ethics in my view, basically what I would say to my student is you can run those arguments. Everybody in the dinner party will say; “oh, he or she is a lawyer!“. And you’ll lose because they won’t understand it. You can try the little bit more nuanced approach to say it’s a lawyer’s job as a defence counsel, not to prove my client’s not guilty. It is the prosecution’s job to prove guilt. I have to put the prosecution to proof, that’s the whole basis of it. And that’s true. And indeed it is a rational answer. It’s not going to win. So basically what I say to my students is when you’re in this situation, when you’re asked a question that you really don’t want to answer, the best way is; take a leaf out of the book of politicians and answer it with another question. So if you’re asked the question; “how could you possibly act for somebody you know is guilty?” A better answer would be saying; “isn’t that an interesting question? But isn’t a more interesting question, how could you act as a prosecutor for somebody who you knew was innocent?” Because what that does, it brings in the role of the state and you can go back to Plato’s Republic and you can talk about the last 3000 years of philosophy and everybody will look at you and say; “oh, he or she’s a philosopher!“. And you’ll be fine but the issue here is really an important issue, that we as lawyers or criminal lawyers know that my job as a defence counsel is not to prove guilt or innocence. It’s the prosecutor’s job to prove guilt. I don’t have a responsibility to prove innocence. We have to put the prosecutor to proof. If they don’t achieve that, if they don’t discharge their onus, then my client walks regardless of whether or not they’ve admitted guilt to me. Now, this is a conundrum that we call the interface between what we call role morality and ordinary morality. Role morality for lawyers is the Solicitor’s Rules and tell you all the things you must comply with to keep your practising certificate. Ordinary morality is the morality you bring into the legal practice, which is a much bigger issue based on your cultural background, your history, who you are, how you’ve grown up, etc. And where they are in tension is where ethics lies.
DT:An example of that outside of the role of criminal lawyers, and this is one that I’ve come across more frequently in my background as a commercial lawyer, where that ordinary morality and that role morality can come into conflict and the questions often phrased quite similarly; how can you come out of law school and just use those skills to make the rich richer? I think is a common one that, especially young lawyers who maybe thought that they were going to law school for humanitarian law reasons or to study human rights or become criminal lawyers and end up on a different path. Do you see that as an ethical challenge or do you see that as a political or a philosophical difference?
00:25:16SM:It almost doesn’t matter. Hair splitting doesn’t really apply when I’m talking about ethics. I think of ethics as morality in action. So whatever your moral code or your moral compass tells you, and assuming that everybody has one and some don’t.
DT:It’s a particularly difficult subject for them.
SM:The problem is, I can make it even more general in that when you’re in the commercial world and when you’re in any area of law other than criminal law, although it applies to criminal law as well, your client comes to you and your client will give you instructions. That’s where everything begins. Even though Rule 3 of the Solicitor’s Rules and Rule 3 of the Barrister’s Rules both say that your primary duty is to the court, not to the client. So, secondary duty to the client. The issue here is, well, that’s fine, but what do I do when the client comes to me and it’s a corporation and I don’t believe in it or whatever, we actually do something which is unique for all human beings, meaning we rationalise. So we will rationalise our behaviour. I’m employed by this organisation, I want to keep my job. We have enablers and disablers that actually help us make ethical decisions. I’m new in an organisation. I’m a new lawyer. I’m told to use the six minute unit, but I think I’ve only made a one minute phone call. Isn’t that cheating? No, it’s not because the firm tells me, so I rationalise it, it’s okay. So we go through our own levels of rationalisation all the time, and particularly when we’re dealing with corporate clients. It’s the organisation that is our client. If we’re dealing with a corporation, it’s the organisation, not even the people that are instructing us. We have to understand what the purposes of that organisation are. So it becomes really complex and it becomes a situation where we internalise our role in relation to the client. So it becomes this standard conception, the adversarial advocate. The standard conception of lawyering is that I must act zealously for my client as long as it’s within the law. The problem with it is “within the law” becomes very tricky, and we are able to rationalise ourselves out of the law all the time. So, when you’re in your dinner party as a corporate lawyer, and; “how can you possibly act for the rich?”. Your job is to assist your client to solve a problem. Again, back to winning versus problem solving. Sometimes your client doesn’t need to win. That’s not the way that they resolve the problem. Look at some of the big corporate issues. AWB case, the Hardie’s case, the Torture Memos of the United States, the McDonald’s case, all these cases where it is the client wanting to do something and the lawyers acting within the organisation, either as in-house counsel or external lawyers trying to do the bidding of the client and actually managing the case rather than acting on instructions. And so what they do is try too hard to win because they think that’s what the client needs. And in all those cases I’ve just mentioned that winning did not help. Matter of fact, winning created loss.
00:28:37DT:Absolutely. As we return to this idea of negotiation or any kind of legal matter being a zero sum game, I think a common mistake that’s made is conceptualising ethics as the restraint on performance. That there’s a role to play gun for hire within the confines of the law or we could perform better if we didn’t have the constraints of the law. We could do more for the client to zealously pursue their interests. But we have to operate within that constraint. And there’s a tension between behaving ethically and behaving effectively. But this discussion of ethics in the context of interest based negotiation, again, kind of draws out that acting ethically can be a performance based approach as well. The more ethical approach, really understanding your client’s interests and pursuing those, not just the instructions, can actually result in better outcomes.
SM:A very simple example I use in my class. Again, this is very simplistic and we’ll go to more complex ones, which will be more interesting probably for lawyers. I talk about a lawyer working in a suburban practice and one day a client walks into your office and they say they’ve lent their next door neighbour $5,000 and their next door neighbour hasn’t paid them back. They demand and they instruct you to sue them. Following pure adversarial advocacy rules, you’d say; “okay“, and you’d launch a lawsuit. Of course, anybody in their right mind would’ve never sued anybody for $5,000. It’s going to cost 20 times that but be that as it may, the issue is I encourage my students and the people that I talk to when I’m working with law firms, always ask what I call the five layers of why. So when the client walks in and says, I want to sue my next door neighbour, I would say, a good lawyer, an ethical lawyer would say; “why did you lend them the money? Did they need the money? What did they need it for? Why do you think they’re not paying you back? Is it because they can’t or they won’t? Because if they can’t, there’s no point in suing them. If they won’t, why won’t they? What’s happened? Where has there been a breakdown? This is your next door neighbour. You want to sue a next door neighbour? You want to live next door to the neighbour from hell for the rest of your life? By creating enmity? This is crazy. So let’s talk about all these issues. What does your partner think about this? Maybe your children play with the kids of the person next door. What does your family think about it? What does the other person think? What does the community think about this? Everybody’s going to know about it. So what is your community? It might be just your block, but it might be a community.” So asking all these questions is how you strip away the position of the person to find out what their real interests are and to get them to ask the question. The interests is what you based your position on, sometimes incorrectly. That’s alright. So ask yourself why this position but then ask, why is the other side not paying? What’s their interest? Because once we can start thinking about their interests, we’re much closer to being able to think about how to resolve a matter. And indeed, I must state early in the piece that Rule 7.2 requires you to do this anyway. Your Solicitor’s Rules, if a client comes in and wants to seek litigation on anything – civil litigation, particularly – you are required to suggest alternatives to fully contested litigation. You must talk about ADR. Lawyers forget this, and it’s sometimes in the client’s best interest to do so.
00:32:25DT:Absolutely. Even just to unpack one small part of that around can’t or won’t pay, it’s remarkable to me how often you see in legal practice, “well, we got the judgment. The company’s in liquidation now, but you should be happy. We won on liability. I mean, recoverability… you know, that’s a practical question. And maybe the dividend coming from the liquidator will come in a few years and maybe you’ll get three, maybe four cents in the dollar. But, didn’t we do well winning on liability?
SM:Didn’t we win? Another example, this is an actual case White Industries. This is a case where there was a developer who was building a shopping centre for a client. And the developer was finding difficulty in paying for the construction – had lots of other developments going and they just needed to balance things. This is a Queensland case. Went to a law firm and said to the law firm, “I’m in real strife here. I can’t pay White Industries who are building this shopping centre for me. Can we just delay it? All I need is a delay to get some of these other developments up, then I’ll be able to pay.” The law firm said; “well, why don’t we just claim fraud against White Industries?” There was no fraud. The law firm even went to Senior Counsel – I won’t name him, who became a High Court judge, but leave that aside – and got an opinion to say; “well, there’s probably no real likelihood of success but you might delay things.” Well, at the end of three years, 150 days in court, the client had gone bankrupt then the lawyers had withdrawn. The poor developer had to pay all their costs throughout that whole process, etc. Unbelievable. But that law firm thought that they were doing the best job for their client, helping them to win. It cost them several million dollars in fees because they had abused the process of the court and they had brought an action where there was no reasonable likelihood of success. So the thing is, sometimes we can take an action on behalf of a client when we think only in terms of our duty to win, which is going to damage the client significantly.
00:34:41DT:I think what that answer’s revealed is that there is a real difference between – and again the rules and the ethics are two very different things – but when we talk about our duty to pursue our client’s interests, we conflate that with a duty to win. But the concept there is far more nuanced.
SM:Precisely.
DT:Returning to the negotiation context. We mentioned at the top of the episode, we would talk about this difference between falsehoods or maybe exaggerations in the context of negotiation and the withholding of information and the concept of asymmetrical information. Tell us a little bit about where the line is on both of those examples because I think, I’ve certainly never been to a mediation that didn’t start this way. I don’t know that’s a good thing, but every mediation I’ve ever been to has always started with an opening session where both parties give an opening statement about how confident they are in the prospects of their case, and they have every expectation of success at a final hearing, but they acknowledge that’s going to be a costly and time consuming process. And so that they’re prepared to consider negotiating today. And the parties then go away and have a real negotiation after that show of force. That’s bluster, perhaps overconfidence, but I don’t think anyone would suggest that’s crossing a line into unethical territory. But there are some statements made in the context of a mediation or negotiation that can.
SM:As I mentioned earlier, during negotiation, as Justine Rogers – who also works with me, she’s now Associate Professor Justine Rogers at UNSW in the Ethics Department – wrote a paper on this long time ago, which she basically talked about the behaviour of lawyers during mediation negotiation where there is no adjudicator, where there’s no one oversighting it, and the tendency of people to lie, cheat, and steal because of it. And I have experienced that both as president on the Anti-Discrimination Board and of course as Legal Services Commissioner, I’ve handled dozens, hundreds, even thousands of mediations. Sometimes they’re more horse trades than mediations.
DT:I think that’s often the case.
SM:Exactly.
DT:Some of our listeners will know, I used to practice as a barrister, and at the time I did, you couldn’t practice as a barrister in Sydney without tripping over family provisions work. I did do some of it, and it was astonishing to me how private solicitors charging by the hour, barristers at the private bar charging by the day, a private mediator and, because it was before COVID, private conference hire would all get together at a cost of tens of thousands of dollars to exchange numbers for eight hours, it was eye watering.
00:37:20SM:Absolutely. So I’ll give you a couple of different examples of how a negotiation-mediation can work. I’m going to use one example; goes way back when I was president of the Anti-Discrimination Board because we did lots of the conciliations as distinct from mediations but it means that you just, as conciliator, take a bit more of an active role than a mediator does. And I had a mediation between the Jewish Board of Deputies and a community newspaper that was basically of Islamic tenure. And that newspaper was talking about what’s called the Protocols of Zion and it was publishing the Protocols of Zion. As any Jews that are listening to me know, that will probably raise their blood pressure hugely. Protocols of Zion was a book written by the Russian Secret Service in 1905 about the inner workings of the Jewish community and how they control the world and eat babies and it was all a lie. So the publishing of this lie by this newspaper was red rag to a bull to the Jewish Board of Deputies. I then tried to conciliate between the two groups. So I had Jewish Board of Deputies, one side, newspaper on the other side.
DT:So a nice easy job then.
SM:Exactly. As you say, you could actually go through those steps of negotiation, mediation, conciliation, which I tend not to do. I would take both parties aside separately before the mediation and talk to them about their interests and try to get to their interests rather than their position, and then let them go for a while. But anyway, in this particular matter, as you can imagine, it was extreme anger, extreme tension, etc., until I was able to calm them down. And the way we ultimately resolved the matter was to have the Jewish news publish articles written by the Islamic newspaper and the Islamic newspaper publish articles written by Jewish News. Now it sounds very simple, but what that meant is they had to understand each other. And they had to write articles that were not going to be infuriating and inflammatory, etc., so that they had to understand each other. It created calmness. That’s a good mediation because there wasn’t a winner or a loser. They both won. I don’t believe in win-win. This concept of win-win, I think, is misnamed. It should be no lose-no lose because everybody compromises. The second one I’m going to use is actually another existing case, the Mullins case.
DT:Yeah, of course. I was hoping we would get into this.
00:39:51SM:Okay, I know too many cases, but I’m sure you would’ve known this one. This is a famous one. A matter of fact, I used to work at a law firm in Queensland, which had the name Mullins in it, so I know some of this personally.
DT:Oh. Wow! Okay.
SM:Okay. But anyway, Mr. Mullins was a barrister and Mr. Mullins was involved in a personal injury action where he was acting for a client. And in that matter, they had produced all the information about, the losses to the client, the injuries to the client and the life expectancy and everything else. They’d sent all of that information to Suncorp, basically the insurer who’s acting for the other side. But right before the mediation where they were going to go into mediation and talk about it, Mullin’s client told him that he’d just been diagnosed with cancer. And then he said but I don’t want you to disclose that information.
DT:And of course, critically important to the assessment of quantum here, because the claim had been formulated on the basis of 20+ years of life expectancy, Mullin’s client’s life expectancy was now considerably less.
SM:Well, you don’t know.
DT:Well, that’s true. I think that’s the root of it.
SM:That’s the whole thing. So you didn’t know. So what Mullins did, and Mullins was well known as a highly ethical barrister. He was not one of the bad guys.
DT:No.
00:41:04SM:However, what he did was a classic adversarial lawyer problem or he made that mistake. Basically what he did is he looked at the issue, he actually sought advice of Senior Counsel as well, but he asked the wrong questions, but we’ll leave that aside. The questions he asked were easily answered but missed the point. He was making the assumption that as long as he did not actively mislead the opposition, it would be okay to remain silent about that change because he was instructed and he must act on his competent instructions, he must act in the best interests of the client. So 4.1.1, Solicitor Rule 8, all important issues, but so was Solicitor Rule 4.1.4, you must always act independently. Solicitor Rule 17, you’re not a mere mouthpiece of the client. You don’t take on their instructions if they’re unethical or unlawful or not in the client’s best interest. So you have this tension between what is the client’s best interest, who determines that me or the client? In this particular matter, he looked at the equivalent of what we call Rule 19, which is basically how you do not have to correct an error of the opposition, you have to correct your own errors or your client’s errors under certain circumstances in court, but you don’t have to correct the opposition. So you’re running a drunk driving case for a client and the opposition doesn’t know that your client’s got three previous drunk driving convictions and gets up and says; “the client seems to be employed and he seems to have only had one example of this drunk driving, we should let him off early.” You don’t have to get up and say; “excuse me, Mr. Prosecutor, my client’s unemployed and has got three convictions.” You don’t have to do that, but you can’t make use of the mistake. So you can’t get up in your summing up and say; “because my client doesn’t have any convictions…” All of that is clear. In Mullin’s case, he structured it in such a way to do the best job for his client, act in the client’s best interest. He actually rationalised his position saying; “well, as long as I don’t actively say my client doesn’t have cancer, I would be fine.” Well, the court ultimately disagreed and he was fined $20,000 and professional misconduct. But be that as it may, it shows that even the best lawyers can get caught up in this issue of client’s instructions telling me what to do, and my job is to help them win. Is that in their best interest? Well, in this particular issue, probably wouldn’t have been because the insurer, when they found out about it, sued.
DT:Yeah.
SM:So, you know, the reality is they had misleading information, they could sue. They could sue the client, they could actually sue the lawyer but leaving that aside, not for negligence, but probably for a breach of fiduciary. All kinds of issues there and it’s really important that we understand our role and particularly what the client’s best interests really are.
00:44:07DT:Yeah. And understand them not in that myopic way of looking at, well, this event is going to serve the client this way…
SM:Precisely.
DT:… at this point in time, not looking further. That is such a controversial case though, Mullins, I’m sure in your classes it still provokes a lot of discussion because everyone’s quick to say you did do all the right things, sought the advice of Senior Counsel but asked the wrong question. Can we talk a little bit about the wrong question and what the right question might have been?
SM:Well, if he would’ve asked the question the way that we are presenting it here, he would’ve said; “my client has just informed me that they’ve been diagnosed with cancer. Do I have to disclose that information after having already disclosed the information about life expectancy to the insurer? Do I have to disclose the change or a potential change?” If he’d asked that, Senior Counsel would’ve said; “yes, you do.” But what he did ask is; “am I required to correct any misunderstanding that the insurer has about my client’s life expectancy?” Well, they didn’t have a misunderstanding because they didn’t know. So that’s what I mean when I say he asked the wrong question. And it’s because he was thinking in terms of just an analytical view of the equivalent of what we call Rule 19. Well, I’m not going to go into the details of the rules, but which basically says you have to correct your mistake. You have to correct your client’s mistake, but you don’t have to correct the opposition’s mistake. Well, yeah, but they didn’t have a mistake because they didn’t know.
DT:It really goes back to what you were saying before about how we rationalise our behaviour. And in this example it’s a rationalisation of the decision that had really already been catalysed and made, which was; “well, I’m not going to say it, but I need the sign off of Senior Counsel. And the question that Senior Counsel will sign off on is this one”. Perhaps that’s putting a thought process into the mind of the practitioner in that case, that we don’t know that was the way the thought process worked, but you can imagine that approach to rationalising the decision not to disclose that in the context of the negotiation, could very well have gone that way.
SM:Absolutely. And again, it brings up another point. Solicitors cannot rely on a barrister’s opinion as being their own opinion. You are always required to have your own views. So you get a barrister’s opinion might not be correct. So you act on it to say; “I was only doing what the barrister told me“, is not going to save you if it’s ultimately presumed by court, you should have known better.
00:46:44DT:Yeah, absolutely. You can’t externalise or outsource your ethical duties. Ultimately the buck stops with you. A lot of what we’ve been talking about today involves really having a deep understanding of the client’s objectives, the client’s interests as we label them but it can be very difficult to arrive at those interests without a relationship of trust with the client. How do you build trust and what do you see as the importance of trust in behaving ethically as a lawyer?
SM:In a sense, there’s nothing more important for lawyers than to generate trust. The Hayne Royal Commission into financial services, and I also do some work in financial markets and financial services for my sins. But be that as it may, the issue for the Hayne Royal Commission was what we needed to do is get back community trust. There was just a recent survey done that’s done every few years by the Governance Institute about the level of trust in society. And actually lawyers have gone up a couple of points. They’re still not very high on the level, but they’ve gone up a couple of points. And academics have gone up very highly, so I’m in good stead. But be that as it may, the general issue of the entire belief in trust in our society is plummeting. It’s plummeting because we don’t trust various things that are happening in the world at the moment. We don’t trust the media. We have new different types of media. We don’t know where to go for information. There’s a million sources of information. Who knows what’s right with the new AI stuff that’s happening with, anybody can generate anything. Where’s trust? It’s going to be the most important thing for the legal profession in using AI and everything else. It’s going to have to be based on this concept of trust, but most importantly, it’s to be trusted by your clients. Now, to be trusted by your clients is not just doing everything they tell you to do because the result might not suit them. And indeed trusting is about knowledge, it’s about understanding. It’s about having a deep understanding. So again, back to the five levels of why. So with every client, a lawyer should go through these questions; “Why do you want to do this? Why do you think it’s going to achieve your result? What are your results? What are you really interested in?” All these questions have got to be so you can actually get an area of communication. One of the things that I say to my students, as I said, when you are in a negotiation, when you’re arguing with the other side, you’re position versus position, it’s headbutting. You know that. You’re never going to solve anything – “I’m an anti-vaxxer”, “I believe in vaccination”. Where’s that going to go? So the issue is that what you need to do is to find out the why’s before you can even begin a conversation. And the same thing is true about what you do with your clients. You need to understand where your client’s coming from, and once they know that you’ve understood them, that’s where trust lives, you know? And even if they might not be satisfied at the outcome, as long as they know that they have been heard and they know you know who they are, they’re going to be much more happy with you, even if they might not be happy with the outcome.
00:49:53DT:You said that trust is really about knowledge, but I think often we conceptualise that as knowledge of the wrong thing. You know, you’re talking about knowledge of the client, of the situation, in a way, and this is sometimes how I think about it, of being the most ignorant person in the room in that first meeting, “well, explain that to me. Why is that?” Often I think we try to garner trust, we try to convey that we should be trusted by being the smartest person in the room and showing how much we know about the law and how much we know about the client’s business and their strategy and we don’t have to ask any questions because we get it right off the top of our heads. And I think that’s especially a problem in commercial law because often lawyers don’t want to seem like they don’t understand the client’s business. We’re often told; “if you want to build a practice, you’ve got to really understand the client and their business.” You don’t want to seem like you don’t. And so the easiest way to do that is to pretend you do and not ask any questions. Which of course is not a good way to develop trust and not a good way to understand your client’s interests. I think when we say trust is about knowledge, it’s about gathering knowledge, not exhibiting knowledge.
SM:Exactly. And Wasserstrom, a great philosopher and ethicist, has written a lot about this and he talks about the perils of being a member of a profession because you have to have educational requirements to get in, ethical requirements to stay in and some higher duty like ours to the court, it might be just the public interest, to be defined as a profession. The problem with professions are, you go through a lot of educational work, etc., and as a lawyer, you sit on one side of the desk. Client comes in, not corporate necessarily, although depends, has gone through all of their exercises of convincing themselves that they’re right, that they’re innocent, that they deserve, that they never lie, etc. and they’ve convinced themselves. So they will come in and sell you a story that’s just not true. That’s the given. That happens every time. But the real issue Wasserstrom says, is the biggest concern that we have is we might have information asymmetry between us and the client. Yes. So you might know more than the client. It’s only a slippery slope from knowing more than the client to think you’re better than them. And once you start thinking you’re better than them, you become pompous and you become arrogant, and you become distant and you lost trust.
00:52:13DT:Absolutely, and you can end up in that situation that is almost the reverse of what we described in terms of negotiation ethics before where certainly counsel and solicitors have been found to have engaged in professional misconduct where they’ve pressured a client to accept an offer, where they’ve suggested they’ll withdraw if they don’t accept an offer because I know more I know what I’m doing, you should follow my advice and I’ll punish you if you don’t. So I think there’s absolutely… that there’s a peril to information asymmetry both in the withholding of information, but also in the kind of curse of knowledge, assuming status or authority on the basis of it.
SM:Because the corollary of that is that my client in a personal injury action comes to me and says; “I’ve been injured. I’m so angry. Negligence, negligence, whatever. I demand that we sue whoever it is for $1 million.” You know it’s worth 30,000. You know that if you actually were to proceed in court and make a statement that you say you’re pursuing $1 million and they offered to settle for 30,000, and you don’t make more than 30,000, you’re going to have to pay their costs as well. So you know that the client’s best interest is not to do what the client’s instructing you to do. That’s where this question of who determines the best interest comes into the fore. So you have to actually try to persuade your client not to do it or withdraw. But I know a lot of lawyers would just say; “well, no, I’m just going to act on instructions because that’s my duty.” Well, that’s misunderstanding.
00:53:44DT:Absolutely. Now, nearly out of time today, Steve, but I want to ask you a question that I think you’re especially well equipped to answer. I ask all of our guests this, but for young lawyers or law students who are just starting out on their journey in the law, what advice would you give them? What would you want them to take away from this episode? In terms of developing their ethical approach to practice and developing their skills as a negotiator and as an advocate?
SM:The first thing is develop your interpersonal skills. And interpersonal skills is more than just being able to watch body language. It’s to understand clients, understand yourself, being able to listen. Most lawyers think that they’re actually really good communicators because they’re articulate.
DT:Yeah.
SM:Communication requires the ability to listen and sometimes lawyers forget. So that’s a major issue and it seems like such a simple one, but has deep roots. The other thing is, and I know I go against a lot of ethicists when I say this, trust your gut. A lot of ethicists say, “don’t ever listen to your gut.” Well, I say, yes, you do. You listen to your gut. This is an indicator. Red flags come up. What does it tell me? You don’t necessarily act on your gut. You listen to it. And then you say; “what is that telling me? Why did I feel uneasy here?” It’s like conflicts of interest. You see a conflict of interest walking down the street. You cross the street, so the issue is we know these things, but the most important thing is be able to understand that there are other ways of thinking about this. I love the concept of First Nations law, and I really am just getting to understand bits of it. I’ve spent a bit of time in Central Australia. There’s a really interesting concept in Indigenous law or First Nations law, and it’s about negotiation or fighting or whatever you want to call it. The first thing I’d say is that in Indigenous law, there’s only two major sins, only two. Not the 10 daily sins or whatever. It’s greed and narcissism. Greed because you shouldn’t ever take more than you need and narcissism because that leads people to believe that they deserve more. So if you only have those two things to deal with you’re starting on a cultural different playing field than we have. Second thing is if you have a dispute in First Nations law at the end of the dispute, there’s many ways of resolving it through affiliation and relationships because it’s all about affinity structures and relationships, etc., The way things are resolved and the rules and how the law works, but leaving that aside, if they fail and people need to fight because there’s no jail and there’s no police force, there’s a ceremonial fight. And so men might fight with stone knives or if they fight with stone knives, they’re only allowed to cut on the shoulder, the back, or the thighs, for example. So they’re really strict rules. At the end of the fight, however, the winner must be cut in the same way that the loser was. So neither one of them walk away with a grudge. And the basic concept behind all of that is, if I cut you, I’m cutting myself. How would that change our view of negotiation in law?
00:56:54DT:I want to leave our listeners with that thought. Thank you so much, Steve Mark, for joining me on Hearsay the Legal Podcast.
SM:My pleasure.
RDAs always, you’ve been listening to Hearsay the Legal Podcast. I’d like to thank our special guest, Steve Mark, for being a part of it. As you well know, if you’re an Australian legal practitioner, you can claim one Continuing Professional Development point for listening to this episode. Whether an activity entitles you to claim a CPD unit is self-assessed, but we suggest this episode entitles you to claim an ethics or professional skills unit. More information on claiming and tracking your points on Hearsay can be found on our website. Hearsay the Legal Podcast is, as always, brought to you by Lext Australia, a legal innovation company that makes the law easier to access and easier to practice, and that includes your CPD. Hearsay is recorded on the lands of the Gadigal People of the Eora nation and we would like to pay our respects to elders past and present. Thanks for listening and see you all on the next episode of Hearsay!