Duty of Loyalty & Conflict of Interest Flashcards
Duty of Loyalty?
A lawyer has a duty of loyalty to his client that requires the lawyer to put the interests of the client above all
other interests and to avoid any conflicts of interest.
When does a concurrent conflict of interest exist?
A concurrent conflict of interest exists if:
* actual = the representation is directly adverse to another client
* potential = there is a significant risk that the lawyer’s representation of the lcient will be materially limited due to his personal interests or responsibilities to a another client, former client or third party
How MAY a lawyer represent a client whose interests conflict?
- If he reasonably believes that he will be able to provide competent and diligent representation to the client
- the representation is not prohibited by law
- lawyer is not representing parties on opposite sides in the same litigation AND
- Each client gives informed consent (= Informed written consent (CA), informed consent confirmed in writing (ABA) )
Dual Representation in a Crim Case
A lawyer should normally DECLINE to represent multiple defendants in a criminal case because of a potential COI.
Written Disclosure Requirement in CA
Where the conflict arises from the
lawyer’s relationship (legal, personal, etc.) with a party or witness in the same matter as the client OR L knows or rb should know that another party’s lawyer is a family member, lives with or is a CL of the lawyer or has intimate relationship with the L, the lawyer may still represent the client with written disclosure of the conflict.
Conflict of Interest: DOL to prospective clients
A lawyer cannot disclose confidential info received from a perspective client.
A lawyer cannot represent a client with materially adverse interests to a prospective CL in the same or substantially related matter if the lawyer received confidential information material to the matter from the prospective client.
Exceptions:
* both affected client and prospective client give informed consent (CA: IWC, ABA: IC, confirmed in writing)
* When the lawyer with whom the prospective client consulted is timely screened from participation in the matter + written notice given to prospective CL.
Very low tested rule (honestly don’t worry about it)
Conflicts of Interest: Imputed Firm
Generally, a COI is imputed to the entire firm and the entire firm is disqualified from the representation.
HOWEVER: law firm will not be disqualified if:
- the conflict is purely personal AND does not materially limit the representation OR
- lawyer is properly screened: when
- (i) based on a former client at prior firm
- (ii) the lawyer is timely screened + apportioned no part of the fee (iii) written notice is given to the former client AND (iv) IN CA – lawyer did not substantially participate in the matter with prior firm
When a L is leaving a firm: firm may represent a person with interests materially adverse to those of a CL represented formerly by laywer UNLESS matter is substantially same + any remaining lawyer has confidential info that is material to the matter.
Former Government Employee
Former gov lawyers who worked personally and substantially on a matter CANNOT work on that same matter at a private firm UNLESS the gov agency consents in writing
COI will NOT be imputed to the rest of the firm:
* lawyer is timely screened + not apportioned part of the fee
* prompt written notice to the gov agency
Business Transactions with Clients
A business transaction btw a lawyer and current CL is only permitted if:
* all terms are fair and rb to the CL
* the terms are fully disclosed in writing
* the CL is advised to consult outside counsel and is given rb opportunity to do so AND
* the CL gives informed written consent
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Rule also applies when a lawyer knowingly acquires an ownership, possessory, security or pecuniary interest adverse to the client.
Proprietary Interest in a case
ABA: a lawyer CANNOT acquire a PI in the cause of action or SM of litigation for a client UNLESS:
* acquiring a lien to secure the lawyer’s fee or expenses
* a contract for contingency in a civil case
NOT ALLOWED IN CA!
Gifts from Client
ABA: A lawyer shall not SOLICIT a substantial gift from a client OR prepare an instrument that gives the gift UNLESS the L is related to client.
CA: same rule BUT CANNOT INDUCE a CL to make a substantial gift or prepare an instrument giving the gift but may accept a gift if it is fair and there is no undue influence.
Financial assitance to CL
A L cannot provide financial assistance to C in connection w/ litigation, except for:
- Advancing litigation expenses in contigency cases OR
- paying litigation expenses for an indigent C
California: Same, plus L may lend money to C for any purpose if C gives a written promise to repay
Payment of Legal Fees by a Third Party?
May accept compensation from someone other than C only if
* C gives informed consent (CA // C gives informed, written consent (IWC)
* there is no interference with L’s independence of professional judgment or with AC relationship, and
* C info is kept confidential
Serving on the Board of a CL’s organization
If a lawyer seeks to serve as a board member for a corporation he represents, he must do so effectively and w/o jeopardizing his ethical duties to the company as his client.
Limiting Liability to a Client
In CA: Liability may not be prospectively limited
Under ABA: An attorney may not agree to limit the lawyer’s own liability to the client UNLESS C is independently represented in the agreement. C needs written notice and reasonable opportunity to seek independent counsel before settling w/ L.
