3.08 Conflicts of Interest Flashcards
Conflicts of Interest
- Between Two or More CURRENT Clients
- Between Clients Interest AND Lawyers Own Self-Interest
- Between Duty to Current AND Former Client
- Between Duty to Current Client AND Duty to Non-Client 3rdP”
Remember Fiduciary Duties
“Helpful to Consider How the Four Fiduciary Duties are Impaired:
- Care
- Communication
- Confidentiality
- Loyalty”
Lawyer SHALL NOT Represent
One Client DIRECTLY ADVERSE to Another Client
- This remains true even if representing the clients in different matters OR
- Significant Risk That Responsibility to One Client
MATERIALLY LIMITED By Responsibilities to Another Client, Former Client, 3rdP, or Lawyer Personal Interests
EXCEPTION IF (All Four Are Met):-Lawyer REASONABLY BELIEVES
(1) Ability to Provide Competent and Diligent Rep.
(2) Not Prohibited By Law
(3) Does NOT Involve Claim Directly Asserted Against Another Client-
(4) Each Client Gives Informed Consent CONFIRMED in Writing
NOTE: Client Should Sign, but It Could Be Oral Consent Confirmed by Lawyers Written Communication
Informed Consent
CANNOT Be Implied,
Agreement by a person to a proposed course of conduct after a lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of actoin.
Significant Potential for Material Limitations
“Factors =
Duration and Intimacy of the Relationshipo Functions Performed by Lawyer
Likelihood of Disagreements and Likely Prejudice
OFTEN A QUESTION OF PROXIMITY AND DEGREE”
NOT Everything is a Conflict of Interests
Non-Litigation Settings with Common Objectives, Estate Planning and Administration
Looking at the Risk of Adversarial on the Matter
HOWEVER, Ask yourself what could go wrong in representing those multiple parties = LAWYERS RESPONSIBILITY
Direct Adversity Conflicts
Does not necessarily mean economically adverse
-i.e. two companies two valid patents, second patent destroys economic value of first patent = NOT Transaction (RULE FOR EXAMS, but note juries do not understand the distinction)
Conflicting Arguments in Court: If on unrelated matters, a lawyer CAN make arguments that would create adverse precedent for another client.
FACTORS:
- Where the cases are pending-Substantive or Procedural Issue
- Temporal Relationship Between the Matters
- Significance of Issue to Both Clients Immediate and Long Term Interests
- Clients Reasonable Expectations of Retaining the Lawyer
- Current Clients
SUBJECTIVE / OBJECTIVE = What the client REASONABLY BELIEVES about whether the lawyer or firm still represents it.
CANNOT Drop them like a hot potato = Two Choices:
- Get Informed Consent
- Withdraw from Perspective Representation
- Joint Representation
Informed Consent Required
Even With Informed Consent Lawyer Needs to Remember:
- Common Representation Fails B/C Irreconcilable Interests
- Must explain how it goes badly to the each prospective client
Prevailing Rule: Between Common Clients, Attorney-Client Privilege D/N AttachDuty of Confidentiality Inadequate If One Wants to Withhold from AnotherAdvanced Waivers Consent MUST Be Adequate,
Factors-Sophistication of Client (Needs to Be High) -Independent Representation
Joint Representation in Criminal Cases
Criminal Cases = Constitutional Issues Go To Almost Per Se Ineffective CounselMostly a Sixth Amendment Issue
Stickland v. Washington = Substantial Professional Departure + But For Causation
-More forgiving to criminal defendants when Duty of Loyalty is Involved
Holloway v. Arkansas (1978) = Breach of Loyalty + Substantial Effect (lower standard than but for)
Cuyler v. Sullivan (1980) = Judge Must Raise Breach Sua Sponte
NOTE: OTHER CRIMINAL CASES
- Former Clients
Anyone Lawyer has Ever Represented
Cannot Drop Like Hot Potato in Order to Represent Adverse Interest
Consider Other People, Not Represented, Who Revealed Confidential Info to You”
- Duties to Former Clients
Lawyers Do NOT Have the Same Duty to Former as Current Clients
SHALL NOT STANDARD:
- Represent Another Person in Same or Substantially Related Matter with Adverse Interests
- Involves the work the Lawyer or Firm performed OR
- Substantial Risk will involve information acquired during previous representation UNLESS -It has become generally known OR-Informed Consent, Confirmed in Writing (From Former Client)
Substantially Related Matter
Basically Anything Youve Worked On For of Former Client
Question of Fact and Degree
Same transaction or legal dispute
Otherwise substantial risk material confidential information was received
UNLESS Become Public Information OR Obsolete by Passage of Time”
Burden of Proving Relationship =
Court looks at the type rather than the content of the information previously exchanged (defeats the purpose if you have to disclose the confidential information itself) | Subject to Jurisdictional Rulings
Going to Government, Special Rules
Other Conflict Rules Apply AND SHALL NOT participate in a matter which lawyer personally and substantially participated in while in private practice.
In Executive Branch
Violation of Law to Knowingly Communicated
- With Intent to Influence Employee, Department, or Court in connection to
- Particular Matter in which US is a Party, AND
- Person Personally and Substantially, AND
- Involved Specific Party at Time of Such Participation
= 1 year jail and / or up to $50,000
- Personal Interest Conflicts
“Specific Rules:
Gifts, Media Rights, Financial Assistance
SHALL NOT Take a Proprietary Interests in Cause of Action or Subject Matter | Except Lien for Fee
Aggregate Settlements For Multiple Clients (Different from Class Actions)
Malpractice Agreements and Informed Consent w/Independent Representation
Sexual Relationships with Clients”
Business Relationship with Client
“Generally Suspicious of Business Between Lawyer and Client, but allowed IF
- Terms are Fair and Reasonable to the Client (Objective, burden on Lawyer)
- Client is Advised in Writing and Opportunity to Get Independent Counsel
- Informed Consent, In Writing, Signed by Client, Disclosing Essential Information
- Whether the Lawyer is Representing the Client in Transaction
REQUIREMENTS DO NOT APPLY TO
- Ordinary Commercial Transactions for Products and Services Client Makes Available to the Public
- Ordinary Lawyer-Client Fee Arrangements
NOTE: Requirements MUST BE MET when lawyer accepts interest in business or other non-monetary payment for services”
Fiduciary Duty Applies to Confidential Information
~ Profits Owed to the Principle | Restatement
SHALL NOTE Use to DISADVANTAGE of Client | Rules-Allows for the use of non-fiduciary information learned in the course of representation.
Does NOT Permit Insider Trading See 8.4 and FelonyRules = Professional Discipline
Gifts
“SHALL NOT Solicit Gifts including Testimonials and Instruments (i.e. wills) UNLESS
- Exception = Close Familial Relationship
- General Standards of Fairness Apply
- Doctrine of Undue Influence Makes Gifts Voidable by Client”
Media Rights
SHALL NOT make or negotiate for media rights PRIOR TO conclusion of representation (strict because they mostly involve criminal cases)
Financial Assistance
SHALL NOT provide client financial assistance except that:-Court costs and expenses repayment part of contingent on outcome-Court costs and expenses of indigent client-MAY NOT subsidize living expenses
SHALL NOT Take a Proprietary Interests in Cause of Action or Subject Matter | Except Lien for Fee
Contingent Fee has to be based on the award or be keyed to the value of the property (i.e. contingent fee = 1/3 value of real property)o Prevents Ownership Interests
Does NOT Prevent Debt Interests
Liens Authorized by Law Are ALLOWED
- Note: Liens Take Many Forms, i.e. mortgage, etc.
Aggregate Settlements For Multiple Clients (Different from Class Actions) =
Requires Informed Consent
