7. Conflicts, Confidentiality, and Disclosure

Question 1

Conflicts of Interest

What are the two types of conflict?

Answer 1

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

Question 2

Conflicts of Interest

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

Answer 2

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

Question 3

Conflicts of Interest

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

Answer 3

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

Question 4

Conflicts of Interest

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

Answer 4

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

Question 5

Conflicts of Interest

What must you do if a conflict arises before retainer?

Answer 5

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

Question 6

Conflicts of Interest

What must you do if a conflict arises after retainer?

Answer 6

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

Question 7

Conflicts of Interest

Can a client consent to a conflict of interest?

Answer 7

No, the solicitor is bound if there is a conflict

Question 8

Conflicts of Interest

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

Answer 8

Decline to act

Question 9

Conflicts of Interest

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

Answer 9

Yes

Question 10

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?

Answer 10

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

Question 11

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?

Answer 11

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

Question 12

Conflicts of Interest

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

Answer 12

No, you should decline to act

Question 13

Conflicts of Interest

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

Answer 13

No, you should decline to act

Question 14

Conflicts of Interest

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

Answer 14

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

Question 15

Conflicts of Interest

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

Answer 15

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

Question 16

Conflicts of Interest

What is the definition of client conflict?

Answer 16

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

Question 17

Conflicts of Interest

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

Answer 17

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)

Question 18

Conflicts of Interest

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

Answer 18

Decline to act, unless one of two limited exceptions applies

Question 19

Conflicts of Interest

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

Answer 19

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

Question 20

Conflicts of Interest

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

Answer 20

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

Question 21

Conflicts of Interest

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

Answer 21

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

Question 22

Conflicts of Interest

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

Answer 22

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

Question 23

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?

Answer 23

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?

Question 24

Duty of Confidentiality

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

Answer 24

1. Disclosure is required or permitted by law
2. The client consents

Question 25

# Duty of Confidentiality What are five instances in which disclosure of a client's confidential information is permitted by law?

Answer 25

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**

Question 26

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

Answer 26

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**

Question 27

# Duty of Confidentiality Is disclosure made after one of the three instances acceptable?

Answer 27

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

Question 28

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

Answer 28

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

Question 29

# Duty of Confidentiality For how long does the duty of confidentiality last?

Answer 29

Forever. It continues beyond the end of the retainer and the death of the client. | Therefore, *client* always includes **former client**

Question 30

# Duty of Confidentiality What is the standard required of systems and controls in place to identify and mitigate risks to clients' confidential information?

Answer 30

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

Question 31

# Duty of Disclosure What is the duty of disclosure?

Answer 31

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

Question 32

# Duty of Disclosure What are four instances in which disclosure to the client is not required?

Answer 32

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**

Question 33

# 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?

Answer 33

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**

Question 34

# Conflict between Confidential and Disclosure What is meant by **material** information?

Answer 34

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