Week 6: Lawyer/Client Conflicts

Question 1

What are the 4 different types of conflicts that may arise?

Answer 1

1. Between lawyer’s interests and client
2. Acting to act for two opposing parties in same matter
3. Approached to act against a former client
4. Lawyer as a potential witness.

Question 2

Why are there strict measures to prevent conflicts from arising?

Answer 2

Bc of the lawyer’s fiduciary duty and the public interest in lawyers

Question 3

What does 12.1 of the Sols’ Rule indicate?

Answer 3

Solicitors must not act for a client where there is a conflict b/w the duty to serve the best interests of the client and a solicitor/associate except as permitted by the rule.

Question 4

Can the solicitor borrow money or exercise undue influence on his client?

Answer 4

Hell no, R 12.2 + 12.3

Question 5

When is a solicitor able to obtain a financial benefit from a 3rd party in relation to advising a client?

Answer 5

12. 4.3 - Provided that the solicitor advises the client:
    1) of commission to lawyer of referral
    2) that client may refuse referral and has given informed consent to the benefit being received.

In other words, it requires full disclosure of the financial benefit.

Question 6

What are the barristers’ rules in relation to conflict of interests?

Answer 6

R 101 - barristers must refuse if conflict with interests of barristers own interests

Question 7

What must a barrister do if he/she suspects, on reasonable grounds, that interests of client will be in conflict?

Answer 7

A barrister must:

a) advise the instructing solicitor
b) if the solicitor does not agree to advise the client, seek to advise the client.

Question 8

What were the facts in Law Society of NSW v Harvey (1976)?

Answer 8

Harvey encouraged clients to invest in a company that he owned without disclosure or recommending his clients to gain independent advice.

Question 9

What was held in Law Society of NSW v Harvey?

Answer 9

That Harvey had grossly put his own interests above his client’s = he was struck off.

Question 10

What was the verdict in Stud Road v Powes & Ors (2015)?

Answer 10

Lawyer was held to be in breach of his fiduciary duties (conflcit of interests) and had acted improperly. He did not once disclose that he was the shareholder of the company nor suggest that the clients gain independent advice.

Question 11

Who is the onus on for clients to seek independent advice when there is a conflict of interests arising with the current lawyer and he/she still has disclosed the conflict?

Answer 11

Onus is on the lawyer to encourage clients to seek independent advice.

Question 12

In a rather interesting case, what occurred in Legal Practitioners Conduct Board v Movel (2004)?

Answer 12

Movel had sex with three clients in prison. The SC held that she was unfit to practice because of the failure to distinguish professional and client relationships.

Question 13

What was the danger in allowing Movel to continue practicing?

Answer 13

That the romantic relationship/nature of her relationships would compromise the provision of advice.

Question 14

Is there a prohibition on romantic relationships with clients?

Answer 14

No but you have to look at power imbalances, if yes, then likely it is improper conduct.

Question 15

What does informed consent require?

Answer 15

Complete candour and recommendation to seek independent advice.

Question 16

What can culminate from breaches of ‘No Conflict’ Rules?

Answer 16

Injunction restraining firm from acting
Damages for breach of duty 
Personal cost orders against lawyers 
Account of profits/constructive trust 
Professional misconduct findings.