The Negotiator Magazine

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Conduct and Ethics in Negotiation under the English Legal System

David Higham

"It may be objected, that I am now recommending dissimulation to you; I both own and justify it. It has been long said: Qui nescit dissimular nescit regnare (He who knows not how to dissemble knows not how to rule.): I go still farther, and say, that without some dissimulation, no business can be carried on at all." Earl of Chesterfield1

Is ethical negotiation an oxymoron? Ethics has been defined as "the space between what the law requires, and what you think is right."

As a matter of law

What the law requires is easily stated. A negotiated agreement that has been obtained by a fraudulent misrepresentation of fact may be set aside. Such a statement may also amount to the crime of fraud or the tort of fraudulent misstatement. In Ernst Young v. Butte Mining plc 1996 1 WLR 1605, misleading behaviour in negotiation led the court to set aside a purported agreement to serve a notice of discontinuance.

As a matter of The Law Society's Code of Conduct Not much is published in England on ethical negotiation, the subject excites much more interest in the United States of America. The Law Society's Code of Conduct for Solicitors 19992 has no section on ethics and conduct in negotiation. There are, however, general principles in the Guide that will apply, in particular the heading to 17.01 Fairness - "Solicitors must not act, whether in their professional capacity or otherwise, towards anyone in a way which is fraudulent, deceitful or otherwise contrary to their position as solicitors. Nor must solicitors use their position as solicitors to take unfair advantage either for themselves or another person. 1. A solicitor must not deceive anyone; however, any information disclosed must be consistent with the solicitor's duty of confidentiality." And the heading to Rule 19.01 states, "Duty of good faith - A solicitor must act towards other solicitors with frankness and good faith consistent with his or her overriding duty to the client."

1Philip Dormer Stanhope, 4th Earl Chesterfield (1694-1773) letter to his son, Qui nescit dissimular nescit regnare: "He who knows not how to dissemble knows not how to rule." Found at www.bartelby.com

2The Guide to the Professional Conduct of Solicitors 1999 (eighth edition).

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April 2005