Westfield Specialty Tip of the Month – Truth & Lies in Negotiations: Model Rule 4.1

August 28, 2025

Truth & Lies in Negotiations

Truth & Lies in Negotiations: Model Rule 4.1

Not all negotiators are lawyers, but all lawyers are negotiators. No matter what your practice, chances are you negotiate the resolution of issues on an almost daily basis. As lawyers, we are responsible to pursue for our client the outcomes they wish. See, Model Rule 1.2. Our pursuit of our clients’ goals is restrained, however, by the requirements of the rules that govern our profession.

One of those rules is Model Rule 4.1:

In the course of representing a client a lawyer shall not knowingly:

(a) make a false statement of material fact or law to a third person; or
(b) fail to disclose a material fact to a third person when disclosure is necessary to avoid assisting a criminal or fraudulent act by a client, unless disclosure is prohibited by Rule 1.6.

While the rule essentially tells us that lawyers should not lie, the application of the rule is much more nuanced. Applied to negotiations, this rule constrains our use of language and assertions of fact and law. For instance, the rule prohibits a lawyer from stating that there is an eyewitness when there is no eyewitness; or from stating that supporting documents exist when no such documents exist.

Puffing, however, is permitted. For instance, the rule does not prohibit a statement that “My client will not settle for less than $200,000,” even though the client has instructed the lawyer that any settlement over $100,000 is acceptable. See, e.g., MR 4.1, Cmt [2]: “Under generally accepted conventions in negotiation, certain types of statements ordinarily are not taken as statements of material fact. Estimates of price or value placed on the subject of a transaction and a party’s intentions as to an acceptable settlement of a claim are ordinarily in this category….” For an expanded discussion and illustrations of this guidance, see, Cal. State Bar Form. Opn. 2015-194 (“Issue: 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?”)

Other statements made in negotiation are not as easily categorized, and should be used only after careful consideration and study of your jurisdiction’s application of Model Rule 4.1 and related case law and ethics opinions. Making a false statement of material fact can open the door for not just disciplinary complaints by opposing parties, but also civil claims by both opposing parties and clients. (See, e.g., Medallion Film LLC. V. Loeb & Loeb LLP 100 Cal.App.5th 1272 (2024); Vega v. Jones Day, 121 Cal.App.4th 282 (2004); and Cicone v. URS Corp., 183 Cal.App.3d 194 (1986).)

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