Duty of Loyalty / Conflict of Interets

Question 1

Effect of Conflict of Interest

Answer 1

Breach of Duty of Loyalty to Client that can result in DQ, discipline, or civil liability

Question 2

Concurrent Conflict between two Clients Exists if:

Answer 2

-One client’s interests directly adverse to the other’s
OR
-Significant risk that rep of one will **materially limit ** L’s ability to represent the other

Question 3

Conflict b/w Client and Third Party or Personal Interest if:

Answer 3

Significant Risk that L’s representation materially limited by L’s responsibility to 3rd person or personal interst

L must withdraw from at least one

Question 4

Exception to Conflict Rules: L may still represent if:

Answer 4

1. L has a reasonable belief of competent and diligent rep
2. Rep not prohibited by law
3. Parties in Conflict not on either side of litigation
4. L Obtains informed written consent after telling the client of risks (w/o breaching duty of confidentiality)
   CA requires statement of risks to client als be in writing

Question 5

Even if no significant risk of limitation, in CA, L must disclose to client if L:

Answer 5

-Has Relationship w/ party or witness
-Is Related or lives w/ party or witness
-In intimate relationship w/ party or witness

Question 6

CA Insurance Exception to Conflicts

Answer 6

Can represent both insured and insurer when insurer’s only interest is as an indemnity provider

Question 7

Duty of Loyalty to Organization

Answer 7

Act in best interst of the organization and advise employees/officers of duty where their interests conflict

Question 8

Organizational Reporting (up and out)

Answer 8

1. L aware of Person engaged in wrongdoing is a person associated with org
2. Action likely to result in substantial injury to the org
3. L *must *report up to internal higher authority
4. If higher authority fails to act, L may report outside organization only to prevent substantial injury to org
5. L may refer out if needed

(CA: L may not refer out w/o substantial bdoy harm but may resign withdraw)

CA does not allow reporting out

Question 9

Duty of Loyalty to Former Clients

Answer 9

L may not (1)** use confidential information** to former client’s disadvantage w/o consent; and (2) may not oppose former client is substantially related matter w/o written consent

Question 10

Substantially Related to Former Client’s Matter?

Answer 10

Either: (1) same transaction or dispute; or (2) substantial risk that info likely obtained in prior rep would materially advance new client’s position

Question 11

Conflict with Client of Former Firm

Answer 11

May not represent if L **actually acquired confidential information ** material to the matter while working at former firm absent written consent

Question 12

Firm Conflict with Client of Former L

Answer 12

Firm may represent unless (i) matter susbstantially the same and (ii) any remaining firm L has confidential info

Question 13

Imputation of Concurrent Conflict of new L to Firm

Answer 13

Conflict imputed to Firm absent informed written consent if:
1. Based on L’s personal interest and no significant risk of material limitation on other L’s at firm; or
2. (i) L timely screened = no physical access to files and no fee sharing; and (ii) written notice to former client certifying compliance with timely screening req.

Question 14

CA Exception to Firm Imputation Rule

Answer 14

L may not be screened out if L substantially participated in the matter at issue

Question 15

Former Govt. Employee rep of Private Client

Answer 15

Allowed unless L participated personally and substantially in matter during gov service absent written consent

Firm not imputed if L timely screened + notice

Question 16

L moving to Gov from Private Section

Answer 16

If perosnally and substantial worked on matter, may not work on same matter for government without gov employer’s consent or former client’s waiver

Question 17

Prospective Client

Answer 17

Person who consults within L in good faith about possibility of relationship

Not a unilateral communication

Question 18

Conflict of Interest with Prospective Client

Answer 18

L may not represent anyone against a prospective client in the same or substantially related matter if info (CA material info ) acquired could significantly harm the prospective client

Question 19

Imputation of Prospective Client Conflict to Firm

Answer 19

No Imputation if:
1. DQ’ed L avoided exposure to unnecessary info
2. DQ’ed L screened and doesn’t share in fee
3. Writen Notice to Prospetive Client

Question 20

Receiving Fee for Client from Third Party

Answer 20

L may only accept if:
1. Informed (CA: written) consent of C
2. No interference by 3rd party
3. Information between L-C remains confidential

CA Exceptions:
1. Authorized by Court Order
2. Legal services renedered for non-profit
3. Emergency Situation requires after-the-fact consent

Question 21

Sexual Relations w/ Client

Answer 21

Breach of Duty of Loyalty unless pre-existing and consensual –> conflict not imputed to firm but representation may be materially limited

Question 22

Business Transactions with Client

Answer 22

Allowed if:
1. Terms fair/reasonable
2. Terms fully disclosed in writing to client in comprehensible way
3. C adivsed to seek independent counsel in writing
4. Informed written consent
5. CA requires that L’s role be disclosed in writing
6. EXCEPTION: L purchasing product/service C regularly markets to others

Question 23

ABA Proprietary Media/Literary Intersests

Answer 23

Acquisition by L only allowed if matter is entirely *complete**

In CA: Treat as Business Trans.

Question 24

Providing Financial Assistance: ABA vs. CAL

Answer 24

ABA:
-court costs / litigation expenses okay
-modest gifts for living expenses w/o reimbursement to indigent clients

CA:
-Advance or pay any type of expense
-May loan for any purpose if written IOU
-May pay C’s expense to 3rd party from funds collected in case with consent

Question 25

M

Limitation Clauses re: Malpractice
CA vs. ABA

Answer 25

CA: Never allowed
ABA: C must be advised by independent counsel
-For settlements –> C must be advised in writing to seek outside counsel and L must give C reaosnable chance to consult