Conflicts of Interest Flashcards
What is a conflict of interest?
Conflict of interest exists if an interest of the atty, another client, past client, or a 3d party materially limits or is adverse to loyal representation
ABA Model Rules: Resolving Conflicts of Interest
Reqs:
(1) reasonably believe she can represent all parties effectively
(2) inform each client (if duty of confidentiality prevents atty from disclosing info the client requires to fully understand the conflict of interest, informed consent is not possible); and
(3) client gives informed written consent
CONTINUING DUTY - duty to disclose to a client a conflict of interest and to obtain that client’s consent is a continuing duty so the duty of loyalty requirement must be met each time a potential conflict comes into fruition, before atty should continue representation
REMEDIES:
(a) prior to acceptance of representation = refuse representation of client
(b) post acceptance of representation = withdraw
Remedies for conflicts of interest (ABA Model Rules)
(a) prior to acceptance of representation = refuse representation of client
(b) post acceptance of representation = withdraw
CA Rules: Resolving Conflicts of Interest
- applies to both potential and actual conflicts
- no reasonable lawyer std
- written disclosure/informed written consent - CA sometimes reqs written disclosure by atty instead of informed consent by client
Written Disclosure (for CA)
- legal / business / financial / professional / personal relationship w/ party/witness in same matter
- knows/reasonably should known previous relationship w/ party/witness in same matter, AND previous relationship would substantially affect representation
- legal / business / financial / professional / personal relationship w/ person/entity knows/reasonably should known would be substantially affected by resolution of matter
OR - legal / biz / fin / prof’l interest in subject matter of the representation
Informed Consent by Client (for CA)
multiple clients and interest potentially conflict, or
multiple clients and interests actually conflict
CA requires informed written consent for both potential and actual conflicts
Imputed Disqualification
If one lawyer employed by a firm is unable to take on the representation b/c of a conflict of interest or confidentiality problem w/ a former client, the disqualification is imputed tot he entire firm and no lawyer in the firm may take on representation
Imputed Disqualification of Atty’s former firm
matters are substantially related or the same; AND
remaining atty has confidential, material information
CA rules for imputed disqualification
will disqualify, but no disciplinary action
Conflict arises from purely personal relationship
= ethical wall
representation may be reasonable if the lawyer w/ the conflict is completely screened from the other lawyers of the firm
Imputed Disqualification: Former Gov Client
No imputed disqualification if
(1) ethical wall = lawyer w/ conflict completely screened (from handling any portion of the representation against the gov)
(2) no sharing in fees; and
(3) gov informed (so that gov can ensure that proper preventative measures are taken)
- same rule applies to judges, clerks, arbitrators, mediators, etc.
Representation of multiple clients
resolving conflicts of interest = reasonably believe no adverse effect
CA rules = no reasonably atty std
(1) duty to disclose
(2) informed written consent
Duty to disclose (representation of multiple clients)
the potential conflicts including the potential that she will have to withdraw from the representation if a conflict arises
Informed Written Consent for representation of multiple clients
after disclosure, atty must obtain client’s informed written consent to the joint representation
CA RULES: require informed written consent for BOTH potential and actual conflicts
Counseling Client to Act
Under duty of loyalty, a lawyer should not counsel acts that may subject a client to liability w/o a good faith belief that such decision is in client’s best interest
Use of Confidential Information to Client’s Disadvantage
Use/communication of info related to the representation of a client to client’s disadvantage without the client’s consent violates both the duty of loyalty and confidentiality
Proprietary Interest in Subject Matter of the Litigation
Generally prohibited
Exceptions:
- lien to secure fees or expenses - an atty may acquire a lien granted by law to secure the payment of the lawyer’s fees/express
(NO SUCH EXCEPTION IN CAL)
- contract for reasonable contingency fee - an atty may enter into a K for a reasonable contingency fee in a civil case
Business Transactions with Clients
Permitted if… business transaction b/w lawyers and clients are permissible if the following four requirements are met:
(1) fair and reasonable terms at time interest acquired
(2) fully disclosed in understandable writing
(3) independent legal counsel - client must be advised in writing to seek the option of another lawyer and given reasonable opportunity to do so; and
(4) written informed consent - the client consents in writing
Exceptions: Standard Commercial Transactions
- an atty may enter into std commercial transactions that the client regularly provides to other
Publication Rights K
ABA Rules = prohibited before end of representation
- no Ks before the end of representation
CA Rules = discouraged, but permitted if judge satisfied
- discourages Ks before end of proceeding but tolerates them if the judge is satisfied that the client clearly understands and consents
Expense Advances and Loans
ABA Rules = prohibited unless
- litigation expenses when representing indigent clients; or
- advance of litigation expenses in contingent fee cases
CA Rules = financial assistance prohibited in all contexts
Exceptions:
- REAL LOANS OK - CA permits lawyers to make such loans for any matter (even non-litigation matters) after the atty is hired so long as the payment is actually a loan that must be repaid and not an outright gift. additionally, the lawyer and client must enter into a written loan agreement, signed by both parties
- ADVANCE of LITIGATION EXPENSES in CONTINGENT FEE cases OK
Serving in Legal Services Organization
Lawyer may serve as director/officer/member BUT
lawyer shall not knowingly participate in decision or action if
- incompatible w/ duty of loyalty (lawyer’s obligations to a client); or
- material adverse effect on representation of a client whose interests are adverse to client of lawyer
Former Gov Lawyers in Private Practice
ABA Rules = gov lawyer worked personally and substantially on matter = conflict for atty to work on the same matter later in private practice w/o written consent of the gov ER
- written consent of gov ER required
- matter = specific dispute b/w specific ppl over specific issues (regulations ≠ matters)
CA Rules = former prosecutor
CA specifically prohibits a former prosecutor from later working on the defense of the same case
3d Party Interference: Acceptance of Payment from 3d Party
ABA Rules - lawyer SHOULD NOT accept payment from 3d party for services to a client
UNLESS
3d party does not influence the lawyer’s independent judgment and client consents after full disclosure
3d party interference: Organizational Clients
Atty must act in best interest of the entity
ABA Rules: Reporting up & Reporting Out
1st option: RECONSIDERATION OF MATTER - atty may ask the person associated w/ org to reconsider the matter
2nd option: MUST REPORT UP THE CHAIN - atty MUST refer the matter to a higher authority w/in the org
3rd option: MAY REPORT OUT IF HIGHEST AUTHORITY FAILS TO TAKE APPROPRIATE ACTION
CA RULES: Reporting up
2nd option: may report up = permissive, not mandatory
3rd option: reporting out = prohibited
*note, however, if the fed law requires/allows atty to report, federal preemption means atty cannot be held liable for doing so
