Duty of Loyalty / Conflict of Interets Flashcards
Effect of Conflict of Interest
Breach of Duty of Loyalty to Client that can result in DQ, discipline, or civil liability
Concurrent Conflict between two Clients Exists if:
-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
Conflict b/w Client and Third Party or Personal Interest if:
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
Exception to Conflict Rules: L may still represent if:
- L has a reasonable belief of competent and diligent rep
- Rep not prohibited by law
- Parties in Conflict not on either side of litigation
- 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
Even if no significant risk of limitation, in CA, L must disclose to client if L:
-Has Relationship w/ party or witness
-Is Related or lives w/ party or witness
-In intimate relationship w/ party or witness
CA Insurance Exception to Conflicts
Can represent both insured and insurer when insurer’s only interest is as an indemnity provider
Duty of Loyalty to Organization
Act in best interst of the organization and advise employees/officers of duty where their interests conflict
Organizational Reporting (up and out)
- L aware of Person engaged in wrongdoing is a person associated with org
- Action likely to result in substantial injury to the org
- L *must *report up to internal higher authority
- If higher authority fails to act, L may report outside organization only to prevent substantial injury to org
- 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
Duty of Loyalty to Former Clients
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
Substantially Related to Former Client’s Matter?
Either: (1) same transaction or dispute; or (2) substantial risk that info likely obtained in prior rep would materially advance new client’s position
Conflict with Client of Former Firm
May not represent if L **actually acquired confidential information ** material to the matter while working at former firm absent written consent
Firm Conflict with Client of Former L
Firm may represent unless (i) matter susbstantially the same and (ii) any remaining firm L has confidential info
Imputation of Concurrent Conflict of new L to Firm
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.
CA Exception to Firm Imputation Rule
L may not be screened out if L substantially participated in the matter at issue
Former Govt. Employee rep of Private Client
Allowed unless L participated personally and substantially in matter during gov service absent written consent
Firm not imputed if L timely screened + notice
L moving to Gov from Private Section
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
Prospective Client
Person who consults within L in good faith about possibility of relationship
Not a unilateral communication
Conflict of Interest with Prospective Client
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
Imputation of Prospective Client Conflict to Firm
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
Receiving Fee for Client from Third Party
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
Sexual Relations w/ Client
Breach of Duty of Loyalty unless pre-existing and consensual –> conflict not imputed to firm but representation may be materially limited
Business Transactions with Client
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
ABA Proprietary Media/Literary Intersests
Acquisition by L only allowed if matter is entirely *complete**
In CA: Treat as Business Trans.
Providing Financial Assistance: ABA vs. CAL
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
M
Limitation Clauses re: Malpractice
CA vs. ABA
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
