Justice William Charles Crockett AO - Victorian Bar

News and ViewsTalking With Liars andBulliesGeoffrey GibsonTRUTH in negotiating is a little liketruth in advertising — often scarceand generally suspect. Bullyingcomes to us with nature — since all animalsare not created equal, some have thepower to prevail over others.When lawyers are talking about a possibledeal, as in negotiating to settle acase, and they are talking about, say, thereadiness of the victim to settle, or howmuch the other side may be able to offer,their devotion to veracity may seem to beless evident than when they are talking toa judge. You frequently hear statementsthat have as much truth value as whenCaptain Renault said to the owner or Rick’sCafé: “I am shocked, shocked, to find thatgambling is going on in here.” You expecta degree of vigour and chest-beating innegotiation. Lawyers used to use the word“puff” to describe how people in businesstalk up what they have on offer.People can also get heated about eitherthe principle or the money (generally thelatter under the guise of the former). It isalso common to hear people warning othersof the bad consequences that may flowfrom not reaching a deal. Warnings areone thing. (Presumably their own advisershave done the right thing and givenwarnings.) Threats are something else.Shortly after Captain Renault collectedhis winnings, Major Strasser discussed theoptions available to the Resistance herowith Ilsa. The second alternative? “My dear,Mademoiselle, perhaps you have alreadyobserved that in Casablanca human lifeis cheap. Goodnight, Mademoiselle.” Thiswas not a subtle threat. It is, however,the kind of thing that is becoming sadlyfrequent in negotiations between lawyersthat take the form of mediation.Lying and bullying are dealt with underthe headings of honesty and integrity.Where you are dealing with negotiating asettlement of litigation, there is a legal context.Under our common law of evidence,such discussions are privileged from beingGeoffrey Gibsoncompelled to be read in evidence in court.The discussions are like a “without prejudice”offer to settle a case. In mediation,the parties also frequently agree that theproceedings are confidential. The resultthen is that the proceedings cannot berevealed to anyone outside. The prohibitionextends beyond the courtroom. (It isas well for the parties to expressly stipulatethe confidentiality as the law seemsreluctant to imply that term.)The privilege and confidentiality areconfined to parties and the subject of thediscussion. A privilege is not an immunity.An act of bankruptcy does not cease tobe an act of bankruptcy because it takesplace in the course of negotiations. If oneparty punches or shoots another party,the ordinary legal consequences follow, asthey do if one party steals from, or blackmails,or defrauds another. It would be asabsurd for the party charged to plead thatthe crime was committed in the course ofnegotiations, as it would be for an arsonistcharged with burning down a churchto say that they struck the match in thecourse of an act of prayer or confession.We might therefore consider what variousparts of our law have to say about liesor threats offered in, say, a mediation. Wecan look briefly under five headings – criminallaw; civil wrongs (torts); contractualobligations; commercial law (trade practices);and the law dealing with obligationsowed by those who represent the interestsof others, such as lawyers and officers ofcorporations or representatives of government(called fiduciary obligations).If I obtain financial gain by deception,I am guilty of the crime of theft. Now thishappens daily and it has been going onsince any notion of property was developed.It has been going on in settlementdiscussions, on both sides, for centuries,and will continue. It is only rarelydiscovered in a way that can be provedbecause the exercise we are talking of islike a poker game. You have to pay to see.Jeffrey Archer got caught and went to gaolbecause he took his fraud into the witnessbox. I shall come back to our criminal lawnear the end of this note.In the form I have referred to, thecrime of theft involves the civil wrong ofdeceit. If a party obtains financial advantageby lying about their means they couldbe sued, if the deceit is discovered andcan be proved, for the damage causedby the decision induced by the lie, to payor accept an amount of money. Becausethey have been unjustly enriched, theymay also be accountable under our law ofrestitution.If a party or their lawyer says somethingfalse that damages the reputationof another, they may be exposed to anaction for defamation. There may be adefence of qualified privilege within themeaning of that term in the law of defamation,but that is very different from anda much more diffuse concept than theprivilege described in our law of evidence.And when lawyers and witnesses claiman absolute privilege for what they sayin court, there is no general immunity.The ordinary consequences follow if the41