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SQE1 - Ethics & Professional Conduct > 7. Conflicts, Confidentiality, and Disclosure > Flashcards

7. Conflicts, Confidentiality, and Disclosure Flashcards

1
Q

Conflicts of Interest

What are the two types of conflict?

A
  1. Own interest conflict: conflict between solicitor/firm and client
  2. Conflict of interest/client conflict: conflict between two or more clients
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2
Q

Conflicts of Interest

What are the three types of matters in which a conflict can arise?

A
  1. Same matter
  2. Related matter
  3. Different, but related matter (relates to same asset/liability)
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3
Q

Conflicts of Interest

What is not considered to be sufficient to create a conflict?

A

General business interest, e.g. two clients operating in the same industry, alone (unless related of course)

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4
Q

Conflicts of Interest

In a conflict situation, can a different solicitor within the firm act for the second client?

A

Generally, no. The conflict provisions cover the entire firm.

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5
Q

Conflicts of Interest

What must you do if a conflict arises before retainer?

A
  1. Decline to act, or
  2. Act only for the client(s) whose interests you can best represent
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6
Q

Conflicts of Interest

What must you do if a conflict arises after retainer?

A
  1. Inform all clients
  2. You can continue to act for one party, but be mindful of confidentiality issues going forward
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7
Q

Conflicts of Interest

Can a client consent to a conflict of interest?

A

No, the solicitor is bound if there is a conflict.

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8
Q

Conflicts of Interest

What must you do if there is an own interest conflict or significant risk of one?

A

Decline to act

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9
Q

Conflicts of Interest

Are all financial interests in a client’s business an own interest conflict?

A

Yes

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10
Q

Conflicts of Interest

When might a client leaving a gift of significant value to the solicitor in a will not be considered an own interest conflict?

A

If the solicitor is satisfied the client has taken independent legal advice regarding making the gift

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11
Q

Conflicts of Interest

What is another exception to a client leaving a gift of significant value to the solicitor in a will being an own interest conflict?

A

If the solicitor’s ability to advise could not be said to be affected by the financial interest, e.g. drawing up parents will where solicitor and siblings are treated equally

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12
Q

Conflicts of Interest

Should you represent a client against someone with whom you have a personal relationship?

A

No, you should decline to act

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13
Q

Conflicts of Interest

Should you represent a client when you have a commercial interest in a business adverse to the client?

A

No, you should decline to act

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14
Q

Conflicts of Interest

In an employment law context, what is one situation in which a solicitor should decline to act?

A

If the prospective client is a former employee of the solicitor’s firm and is bringing a claim against the firm

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15
Q

Conflicts of Interest

Can a solicitor advise a client on how to rectify a mistake that the solicitor has made?

A

Not, if one of client’s options would be to bring a claim against the solicitor for professional negligence

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16
Q

Conflicts of Interest

What is the definition of client conflict?

A

Where a solicitor owes separate duties to act in the best interests of two or more clients, and those duties conflict

17
Q

Conflicts of Interest

What is a good test to consider whether you have a client conflict?

A

If you are representing two or more clients in the same matter/retainer, and your advice to one is different than your advice to the other(s)

18
Q

Conflicts of Interest

What must you do if there is a client conflict or significant risk of one?

A

Decline to act, unless one of two limited exceptions applies

19
Q

Conflicts of Interest

What is the substantially common interest exception to a client conflict?

A

Two or more clients have a clear common purpose in relation to a matter and a strong consensus on how it is to be achieved

20
Q

Conflicts of Interest

What is the competing for the same objective exception to a client conflict?

A

Two or more clients are competing for an objective, which if attained by one will make it unattainable for the other(s)

21
Q

Conflicts of Interest

Regarding the competing for the same objective exception to a client conflict, what is an objective?

A

An asset, contract, or business opportunity via:

  1. Liquidation or other insolvency process
  2. Auction or tender process
  3. Bid or offer which is not public
22
Q

Conflicts of Interest

Even where there is a valid exception to a client conflict, what conditions must be met before you can act?

A
  1. Client has given informed consent, given or evidenced in writing
  2. Effective safeguards are in place to protect confidential information, where appropriate
  3. You are satisfied that it is reasonable to act for all clients
23
Q

Conflicts of Interest

In the context of the conditions required even when there is a valid exception to a client conflict, what should a solicitor consider when determining whether it is reasonable to act for all clients?

A
  1. Will the clients benefit from the solicitor acting for each of them?
  2. Will there be extensive negotiations between the clients?
  3. Is there an imbalance in knowledge or bargaining power between the parties?
24
Q

Duty of Confidentiality

What are two instances in which you do not have to keep a client’s affairs confidential?

A
  1. Disclosure is required or permitted by law, e.g., authorised disclosure under POCA
  2. The client consents
25
Q

Duty of Confidentiality

What are five instances in which disclosure of a client’s confidential information is permitted by law?

A
  1. Client consents
  2. Solicitor discloses client’s will to an attorney under Lasting Power of Attorney
  3. Solicitor is being used by client to perpetrate a crime/fraud
  4. Statutory requirement, e.g. disclosing tax affairs
  5. Statutory duty, e.g. money laundering
  6. Court order or police warrant
26
Q

Duty of Confidentiality

What are three instances in which breach of the duty of confidentiality may be justified?

A
  1. To prevent a criminal offence that will result in serious bodily harm
  2. Where the client has indicated they intend to commit suicide or serious self-harm
  3. To protect a child or vulnerable adult
27
Q

Duty of Confidentiality

Is disclosure made after one of the three instances acceptable?

A

No, disclosure must take place before the fact as the point is the prevention of harm

28
Q

Duty of Confidentiality

Is the duty of confidentiality owed just by the solicitor who is instructed?

A

No, it is owed by the entire firm, including non-lawyers

29
Q

Duty of Confidentiality

For how long does the duty of confidentiality last?

A

Forever. It continues beyond the end of the retainer and the death of the client.

Therefore, client always includes former client

30
Q

Duty of Confidentiality

What is the standard required of systems and controls in place to identify and mitigate risks to clients’ confidential information?

A

The systems and controls should be appropriate to the size and complexity of the practice and the nature of the work

31
Q

Duty of Disclosure

What is the duty of disclosure?

A

Any individual advising a client must make that client aware of all information relevant to the client of which the individual is aware

32
Q

Duty of Disclosure

What are four instances in which disclosure to the client is not required?

A
  1. Client gives informed consent, in writing to non-disclosure
  2. You believe disclosure would cause serious injury to a person
  3. Legal restrictions are imposed due to national security or prevention of a crime e.g. tipping off
  4. You are only aware of the information because it is contained in privileged documents disclosed to you by mistake
33
Q

Conflict between Confidentiality and Disclosure

What are the two exceptions to the rule that you should not act for client A where A has an adverse interest to current/former client B for whom you hold confidential information which is material to A?

A
  1. Effective measures have been taken which result in there being no real risk of disclosure, e.g. team working on A’s matter will not have access to B’s file, or
  2. B gives informed consent, given or evidenced in writing
34
Q

Conflict between Confidential and Disclosure

What is meant by material information?

A

It must be relevant and of more than consequential interest to the client

SQE1 - Ethics & Professional Conduct (9 decks)

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