Conflict of Interests Flashcards
What is informed consent?
means that the client agrees to a proposed course of conduct after the lawyer has sufficiently explained the material risks and reasonable alternatives.
The client must be given sufficient information by the lawyer and not simply rely on the advice of the lawyer. There is no requirement that the client must consult with a second, independent lawyer to provide informed consent
A lawyer must promptly inform a client of any
decision or circumstance that requires the client’s informed consent.
A conflict of interest arises when there is a
Significant risk that the lawyer’s representation of the client will be materially and adversely affected by the lawyer’s own interests or the lawyer’s duties to another current client, a former client, or a third person
The standard used to determine whether a conflict of interest is present is not
reasonable risk but rather substantial risk.
A conflict may arise from a lawyer’s duties not just to
current and former clients but also to third persons, such as fiduciary duties arising from a lawyer’s service as a trustee.
If an attorney mishandles a client conflict, she may be subject to
Disqualification as counsel, professional discipline, civil liability for legal malpractice.
criminal liability for legal malpractice not included
Generally, when a lawyer is barred from taking on a matter due to a conflict of interest, the other lawyers in her firm
are also barred from taking on the matter, unless the conflict is uniquely personal to that lawyer.
conflict is uniquely personal to that lawyer means?
or example, if the lawyer’s conflict of interest arose because of an improper personal relationship with the client, other lawyers in the firm would not have the conflict of interest imputed to them.
Despite a concurrent conflict of interest, a lawyer may represent a client as long as the representation is not prohibited by law and
1) Each affected client gives informed consent,
2) the representation does not involve asserting a claim by one client against the other in the same litigation, AND
3) the lawyer believes he can competently and diligently represent both clients despite the conflict.
a lawyer should not represent criminal co-defendants because
their interests are likely to be divergent, thus negatively affecting their Sixth Amendment right to effective assistance of counsel. This may be true even if the co-defendants agree to the representation. However, the Rules of Professional Conduct do NOT expressly prohibit the representation of co-defendants in a criminal case. Generally, co-defendants’ interests are divergent, not similar.
IS there a conflict of interset? Sarah is an attorney who represents Defendant Daryl in a personal injury case. Daryl is also a named class member in a class action suit against John, and John is also Sarah’s client
Yes, because the person is “named”
IS there a conflict of interset? Sarah is an attorney who represents both Daryl and John. In Daryl’s case, she is arguing that ABC Act is unconstitutional. In John’s case in a different circuit, she is arguing that ABC Act is constitutional
No conflict. Permissible.
IS there a conflict of interset? Sarah is an attorney who represents Defendant Daryl in a wrongful death case. Daryl is also an unnamed class member in a class action suit against John, and John is also Sarah’s client
No conflict, because party is unnamed.
If two clients in a litigation or nonlitigation matter are represented by the same lawyer, and a potential conflict between the two ripens into a present conflict, their lawyer is required to:
(i) analyze the facts to determine if she can effectively represent both clients,
(ii) disclose the potential conflict to both clients,
(iii) invite them to give her informed consent, and
(iv) consider whether a reasonable lawyer would advise these clients to consent.
The same rules for handling this type of conflict apply to both litigation and nonlitigation matters
Note that the lawyer must withdraw from the joint representation if
a reasonable lawyer would have to advise either of the two clients not to consent. .
The lawyer may continue to represent one consenting client, but only if the client who is dropped gives
informed consent to the continuation, confirmed in writing.
In litigation between two people who were formerly joint clients of a single lawyer, who can claim the attorney-client privilege for their communications with that lawyer?
Neither of them
When a lawyer is taking on a new matter, if the lawyer’s interests are likely to Materially limit; her ability to represent a client effectively, she must
she must not take on the matter unless she obtains informed consent, confirmed in writing, from her client
Direct adversity exists when a lawyer
represents one client in a matter adverse to another current client, even where the lawyer represents the clients in unrelated matters. This is true in both litigation and transactional matters.
A lawyer must never be on opposite sides of the
same litigation (or other proceeding pending before a tribunal
If there is a conflict between current clients, a lawyer may undertake the representation if
she reasonably believes that she can competently and diligently represent each affected client despite the conflict, and each client gives informed consent, confirmed in writing. The clients’ signatures are not required.
Even with client consent, a lawyer must not
assert a claim on behalf of one client against another client represented by that lawyer in the same litigation (or other proceeding before a tribunal). In contrast, if the lawyer represents the second client in unrelated matters only, the conflict may be waivable.
In other words, the lawyer can’t be on both sides of the same proceeding
Lawyers within a firm are treated as
a single unit for conflicts purposes.
In class action litigation, the unnamed members of a class ordinarily are
not regarded as clients for purposes of the “direct adversity” conflicts rule. Therefore, a lawyer can sue an unnamed class member in an unrelated matter without obtaining their consent.
Generally, a lawyer may take
inconsistent legal positions in different tribunals at different times on behalf of different clients, and that on its own doesn’t create a conflict of interest. However, a conflict exists if there is a significant risk that a lawyer’s action on behalf of one client will materially limit the lawyer’s representation of another client in a different case: for example, when a decision favoring one client will create a precedent likely to seriously weaken the position taken on behalf of the other client.
The rule for business transactions and adverse financial interests does not apply to:
(i) an ordinary fee agreement between a lawyer and client, or (ii) standard commercial transactions in which the lawyer buys goods or services that the client routinely markets to the public.
Example: If a lawyer takes out a standard home loan from a bank that is also a client, it would be considered a standard commercial transaction. The lawyer would have no advantage in this situation, so the usual requirements for business transactions don’t need to be met. The other choices are subject to the normal requirements.
A lawyer must not enter into a business transaction with a client unless:
(i) the transaction and terms under which the lawyer acquires the interest are fair and reasonable to the client;
(ii) the terms are fully disclosed and transmitted in writingto the client in a manner that can be reasonably understood by the client;
(iii) the client is** advised in writing** that they should seek the advice of independent legal counsel on the transaction (if they don’t already have counsel in the transaction), and is given a** reasonable opportunity to do so**; and
(iv) the client gives informed consent in a signed writing.
Note: It’s not required that the client actually seek advice from independent counsel.
(Note that the rules regarding business transactions with clients don’t apply to ordinary fee agreements, or to standard commercial transactions for products or services that the client routinely markets to others.)
A lawyer must not take a
proprietary interest in a cause of action or in the subject matter of litigation the lawyer is conducting for a client.
A lawyer may accept property, such as stocks, in lieu of money as long as the requirements for a business transaction are met.
A lawyer must not solicit a
substantial gift from a client or prepare an instrument giving the lawyer, or the lawyer’s relative, any substantial gift from a client except when the client is related to the donee
The conflicts rule for gifts from clients doesn’t prohibit a lawyer from
seeking to have herself or her colleague named as executor of an estate or counsel to the executor or to some other fee-paying position.
There may be a general conflict, though, if the lawyer’s interest in obtaining the appointment will materially limit the lawyer’s judgment in advising the client concerning the choice of an executor or other fiduciary.
A lawyer must not provide financial assistance to a client in connection
with pending or contemplated litigation.
This includes gifts, loans, and even guaranteeing a third party’s loan to the client.
There are three exceptions to this rule:
First, a lawyer may advance court costs and other litigation expenses on any client’s behalf, and repayment may be contingent on the outcome of the case. Thus, it would be proper to advance a non-indigent client’s court reporter fees and forgive repayment if the client loses.
Second, a lawyer may simply pay the court costs and litigation expenses for an indigent client, without any provision for repayment, so it would be proper to pay an indigent client’s expert witness fees outright.
Third, a lawyer who is representing an indigent client pro bono can provide the client with modest gifts for basic living expenses.
If the client is not indigent, the lawyer may only
advance the expenses (although, as stated, repayment may be contingent on the outcome). Thus, it would be improper to pay a non-indigent client’s court costs outright.
A lawyer must not acquire literary or
media rights to a story based in substantial part on information relating to the lawyer’s representation of a client(e.g., a lawyer representing a client in a pending murder trial must not acquire rights to a book about the case).
However, a lawyer may acquire these rights after the client’s legal matter is entirely completed, appeals and all. Furthermore, the rule doesn’t apply to literary or media rights that aren’t substantially based on information relating to the representation.
A lawyer may accept compensation from a third person for representing a client, as long as:
(i) the client gives informed consent,
(ii) the third person doesn’t interfere with the lawyer’s independence or the representation of the client, and
(iii) the arrangement doesn’t compromise the client’s confidential information.