Transcript Document

Pulled in Every Direction
Conflicts & How to Avoid Them
AUSTLAW
28 February 2014
What I do know is that conflicts always test
our…
All those things that together make up our character
So much of ethics is knowing…
“I didn’t lie. I just changed the parameters of my promise.”
Where’s- Francis
theUnderwood
Line (Kevin
between…
Spacey) “House of Cards”
Assertive advocacy
&
intimidation
Protecting a client
&
cover-up
Advising clients
&
collusion
Tactics
&
abuse of process
Prudent use of facts
&
lying
Pushing the law to its limits
&
Creating an injustice
Because sometimes legal practice
Involves getting powder on your boots
But to do that effectively
You need to know where the line is…
Think on This…
Your client has pleaded guilty to sexual
interference with a minor and is sentenced to 14
days jail. While awaiting the Crown’s appeal
against the leniency of the sentence you
discover that your client is HIV+.
• Do you advise the other side?
• What are the Rules & other issues to
consider?
Or less traumatically…
You acted for Ann and John in their property
conveyance and some traffic related matters
years ago.
Now Ann & John are divorcing and Ann wants
you to act for her in the divorce and settlement
matter against John.
Can you act?
Hold those thoughts for later
Remember this?
Sometimes our
duties to those Four
Cs conflict with each
other
Critical Questions…
1. Fidelity: Am I being true to myself and the
2.
duties I owe to the 4 C’s?
Honesty: Am I being honest, or avoiding
deceit, in my professional relationships?
3. Propriety: Am I being professional and civil
in the way I conduct myself?
4. Competency: Am I able to apply the
expertise and the time required to provide the
best outcome for those I represent?
Supplementary Questions
Consistent with my commitment to justice &
service…
1. Who do I owe duties to (& what are they)?
2. Who is going to be affected by what I do?
3. Are any duties in conflict?
4. Can the conflict be resolved?
5. Is my self-interest in play?
6. Which ethical principles are guiding my duties?
7. What do the Rules/Law say?
8. What is my conscience/values telling me?
Now back to this…
Your client has pleaded guilty to sexual
interference with a minor and is sentenced to 14
days jail. While awaiting the Crown’s appeal
against the leniency of the sentence you
discover that your client is HIV+.
• Do you advise the other side?
• What are the Rules & other issues to
consider?
Ethics Calculus
•
•
•
•
•
•
Who do I owe duties to?
What duties do I owe to each?
Are any duties in conflict?
Can the conflict be resolved? How?
What does the Law/Rules tell us?
What do your values tell you? Should they be
considered?
Would it make any difference if the rules are silent? (What
then?!)
Would it make any difference if your client had not already
pleaded guilty?
See R v Butt 2012 ONSC 4326 (19.07.2012)
http://canlii.ca/en/on/onsc/doc/2012/2012onsc4326/2012onsc4326.pdf
Article: Law Times (Canada) 6 Aug 2012 - http://www.lawtimesnews.com/201208069242/HeadlineNews/Can-lawyers-reveal-clients-HIV-status
Which Brings Us to
CONFLICTS
The most common ethics problem lawyers encounter.
Breach can give rise to legal and disciplinary action.
Main Types
Conflict of Duty: When your duties to one party conflicts
with another. Typically it can involve a conflict of duties
between 2 clients, or a current and former client, or a
client and the court.
Conflict of Interest: Situations where, typically, the
lawyer’s personal interest conflicts with the interests of,
or duties to, the client (eg. the lawyer uses information
gained during the retainer for personal profit or the
lawyer uses their influence to gain a benefit under a will).
The old NSW Professional Conduct &
Practice Rules (pre ASCR) covered it well
Statement of Principle for Rules 1-16 (Relations with
Clients)
Practitioners should serve their clients competently and
diligently. They should be acutely aware of the fiduciary
nature of the relationship with their clients, and always deal
with their clients fairly, free of the influence of any interest
which may conflict with a client's best interests.
Practitioners should maintain the confidentiality of their
clients' affairs, but give their clients the benefit of all
information relevant to their clients' affairs of which they
have knowledge. Practitioners should not, in the service of
their clients, engage in, or assist, conduct that is calculated
to defeat the ends of justice or is otherwise in breach of the
law.
Rules – ASCR
“Fundamental Duties”
PARAMOUNT DUTY TO THE COURT AND THE ADMINISTRATION OF JUSTICE
3.1
A solicitor’s duty to the court and the administration of justice is
paramount and prevails to the extent of inconsistency with any other duty.
OTHER FUNDAMENTAL ETHICAL DUTIES
4.1
A solicitor must also:
4.1.1
act in the best interests of a client in any matter in which the
solicitor represents the client;
4.1.2
be honest and courteous in all dealings in the course of legal
practice;
4.1.3
deliver legal services competently, diligently and as promptly as
reasonably possible;
4.1.4
avoid any compromise to their integrity and professional
independence; and
4.1.5
comply with these Rules and the law.
Rules – ASCR
“Fundamental Duties”
PARAMOUNT DUTY TO THE COURT AND THE ADMINISTRATION OF JUSTICE
3.1
A solicitor’s duty to the court and the administration of justice is
paramount and prevails to the extent of inconsistency with any other duty.
OTHER FUNDAMENTAL ETHICAL DUTIES
4.1
A solicitor must also:
4.1.1
act in the best interests of a client in any matter in which the
solicitor represents the client;
4.1.2
be honest and courteous in all dealings in the course of legal
practice;
4.1.3
deliver legal services competently, diligently and as promptly as
reasonably possible;
4.1.4
avoid any compromise to their integrity and professional
independence; and
4.1.5
comply with these Rules and the law.
LIV
GENERAL PRINCIPLES OF PROFESSIONAL CONDUCT
GENERAL PRINCIPLES OF PROFESSIONAL CONDUCT
(A) Object of Rules
The object of these rules is to ensure that each practitioner:
(i) acts in accordance with the general principles of professional
conduct;
(ii) discharges that practitioner’s obligations in relation to the
administration of justice; and
(iii) supplies to clients legal services of the highest standard
unaffected by self interest.
(B) Serving the interests of Justice and complying with the Law
A practitioner must not, in the course of engaging in legal practice, engage
in, or assist, conduct which is:
(i) dishonest or otherwise discreditable to a practitioner;
(ii) prejudicial to the administration of justice; or
(iii) likely to diminish public confidence in the legal profession or in the
administration of justice or otherwise bring the legal profession into
disrepute
“It is well settled that a solicitor has a fiduciary
duty to his or her client. That duty carries with it
two presently relevant responsibilities. The first
is the obligation to avoid any conflict between
his duty to his client and his own interests – he
must not make a profit, or secure a benefit, at
his client’s expense. The second arises when he
endeavours to serve two masters and requires
…full disclosure to both.
Clarke JA Clark v Barter (1989) NSW Conv 55 – 483
ASCR: 3 Types of Conflict
CONFLICTS CONCERNING FORMER CLIENTS (LIV R4)
10.1
A solicitor and law practice must avoid conflicts between the duties
owed to current and former clients, except as permitted by Rule 10.2.
CONFLICT OF DUTIES CONCERNING CURRENT CLIENTS (LIV R8)
11.1
A solicitor and a law practice must avoid conflicts between the duties
owed to two or more current clients, except where permitted by this Rule.
CONFLICT CONCERNING A SOLICITOR’S OWN INTERESTS (LIV R9-11)
12.1
A solicitor must not act for a client where there is a conflict between
the duty to serve the best interests of a client and the interests of the solicitor
or an associate of the solicitor, except as permitted by this Rule.
Based in Fiduciary Principle
Conflict Rules - Purpose
Designed to promote undivided loyalty by:
• Ensuring the interests of the lawyer don’t conflict with
client’s interests
• Prohibiting the lawyer from profiting from his/her
position as a lawyer, other than via their reasonable
fees.
It also explains why lawyers should not accept a retainer
where there is reason to believe they may be required to
give evidence material to the determination of a
contested issue.
Conflict Rules - Purpose
Also designed to promote public confidence in the legal
profession & process and avoid the appearance of
impropriety.
“…it is in the best interests of the community, the legal
profession and the attainment of justice that lawyers do
not represent clients …where there could be a reasonably
held perception that they are compromising the integrity
of the profession for the pursuit of personal advantage
arising from their representation, whatever may be the
ultimate truth of the facts which underlie that
perception.”
Lockhart J, ASC v Bell (1991) 104 ALR 125 at 129
Balancing Act
Conflicts are commonly resolved via
• Client consent, or
• Injunction/Restraint, or
• Lawyer withdrawal
When faced with an application to restrain a lawyer,
Courts need to balance two public interests:
• The interest in the client having full confidence in their
lawyer, including the protection of confidences, and
• The right of clients to retain the lawyer of their choice.
Balancing Act
“It is well established that ordinarily litigants are
entitled to solicitors and counsel of their choice
and only where it is clearly necessary to do so
will the Court make an order that would
interfere with that right.”
Newnes M, Zalfen v Gates [2006] WASC 296 at para 61-62
Balancing Act
The jurisdiction of the Court to restrain a lawyer
is generally founded on one or more of these
three grounds:
• The protection of confidential information;
• Restraint from a breach of fiduciary duties in
the context of a conflict of interest;
• To control the conduct of solicitors as officers
of the Court and to ensure the administration
of justice is not brought into disrepute.
Steytler J, Newman v Phillips Fox (a firm) (1999) 21 WAR 309 at [18]
Balancing Act
But, as Brereton J noted:
“The jurisdiction is to be regarded as exceptional
and is to be exercised with caution [Black v
Taylor; Grimwade v Meagher; Bowen v Stott].
Due weight should be given to the public interest
in a litigant not being deprived of the lawyer of
his or her choice without due cause.”
Kallinicos v Hunt
Current Client Conflicts –
LIV
8.2 A practitioner must avoid conflict of interest between two or more clients of the
practitioner.
8.3 A practitioner who, or whose firm intends to act for a party, to any matter where the
practitioner is also intending to accept instructions to act for another party to the
matter must be satisfied, before accepting an engagement to act, that each party is
aware that the practitioner is intending to act for the others and consents to the
practitioner so acting in the knowledge that the practitioner:
(a) may, thereby, be prevented from (i) disclosing to each party all information relevant to the matter
within the practitioner's knowledge; or
(ii) giving advice to one party which is contrary to the interests of
another; and
(b) will cease to act for all parties if the practitioner would, otherwise, be
obliged to act in a manner contrary to the interests of one or more of
them.
8.4 If a practitioner who is acting for more than one party to any matter determines that
the practitioner cannot continue to act for all of the parties without acting in a
manner contrary to the interests of one or more of them, the practitioner must
immediately cease to act for all parties.
Current Client Conflicts - ASCR
11.1 A solicitor and a law practice must avoid conflicts between the
duties owed to two or more current clients, except where permitted
by this Rule.
11.2
If a solicitor or a law practice seeks to act for two or more
clients in the same or related matters where the clients’ interests are
adverse and there is a conflict or potential conflict of the duties to act
in the best interests of each client, the solicitor or law practice must
not act, except where permitted by Rule 11.3.
11.3 Where a solicitor or law practice seeks to act in the
circumstances specified in Rule 11.2, the solicitor may, subject always
to each solicitor discharging their duty to act in the best interests of
their client, only act if each client:
11.3.1 is aware that the solicitor or law practice is also acting for
another client; and
11.3.2 has given informed consent to the solicitor or law practice so
acting.
Informed consent
(according to the ASCR commentary – LCA version)
Informed consent means: consent given in the knowledge that there is a conflict between the
parties and that as a result, the solicitor may be disabled from disclosing to each party the full
knowledge which he possesses as to the transaction, or may be disabled from giving advice to
one party which conflicts with the interests of the other. - Privy Council [Clark Boyce v Mouat
[1993] 3 NZLR 641, 646].
Informed consent focuses on the understanding of the client, meaning that the conversation
between solicitor and client will vary according to the requirements of the client. It is the solicitor,
not the client, who is most likely to be alert to the possibility of conflicts of interest and their
consequences. A client’s informed consent, therefore, is premised upon the solicitor making the
client aware of all relevant matters, including (but not limited to):
• the existence or potential existence of a conflict;
• the potential disadvantages of the conflict;
• any advantages of the conflict, to that client or any other client;
• the fact that alternative representation is likely to be available; and
• the manner in which the solicitor intends managing the conflict of interest.
Moreover, especially in the case of an unsophisticated client, a prudent solicitor will urge the
client to seek independent (legal) advice on the matter.
Current Client Conflicts - ASCR
11.4
In addition to the requirements of Rule 11.3, where a solicitor
or law practice is in possession of confidential information of a client
(the first client) which might reasonably be concluded to be material to
another client’s current matter and detrimental to the interests of the
first client if disclosed, there is a conflict of duties and the solicitor and
the solicitor’s law practice must not act for the other client, except as
follows:
11.4.1 a solicitor may act where there is a conflict of duties arising
from the possession of confidential information, where each client has
given informed consent to the solicitor acting for another client;
11.4.2 a law practice (and the solicitors concerned) may act where
there is a conflict of duties arising from the possession of confidential
information where an effective information barrier has been
established.
But there’s something missing!
In its advice to Law Societies in Oct 2012 the LCA confirms that Rule 11.4 is missing
‘and’. Why not “or” as in ASCR 10?
Information barriers – but BEWARE
The Law Society of New South Wales, in consultation with the Law Institute of
Victoria, has issued Information Barrier Guidelines, which solicitors should
consult. The Guidelines have been adopted by the law societies of New South
Wales, Victoria and Queensland but are confined in their application to
situations covered by Rule 10, namely where a law practice has a conflict
involving its duty to preserve the confidential information of a former client.
The Guidelines do not address the use of information barriers in concurrent
matters, but the obligation to protect the confidential information of each
concurrent client is, in principle, no different to the obligation to protect the
confidential information of a former client.* It is therefore necessary to
adapt the Guidelines somewhat in applying them to the situation of
concurrent clients.
*See UTi (Aust.) Pty Ltd v Partners of Piper Alderman [2008] NSWSC 219, at
para [39]-[45] where Barrett J applied the principle in former client cases to a
situation of a potential conflict between concurrent clients.
BUT: Concurrent client conflicts raise issues of
loyalty as well as confidentiality.
LCA Commentary to Rule 11, p18
Current Client Conflicts - ASCR
11.5 If a solicitor or a law practice acts for more
than one client in a matter and, during the course
of the conduct of that matter, an actual conflict
arises between the duties owed to two or more of
those clients, the solicitor or law practice may only
continue to act for one of the clients (or a group of
clients between whom there is no conflict)
provided that the duty of confidentiality to other
client(s) is not put at risk and the parties have
given informed consent.
A complicating factor –
The Immortal Duty
What’s the one duty that survives
the retainer….and lives forever?
The Immortal Duty
So…
With the ending of the retainer
the issue is usually one of
confidentiality rather than
conflict.
(nb. the Victorians still have regard to
ongoing loyalties. See Spincode)
The Immortal Duty
And don’t forget that not all confidential
information is found in your files.
“Getting-to-know-you” factors include
your impressions, knowledge of
personalities, strengths/weaknesses,
tactics etc
(More of an issue in family & criminal matters)
The Immortal Duty
Magro v Magro
(1989) FLC 92-005
“…it is reasonable to infer that Mr Byrne, by dint of his lengthy
retainer, is in possession of at least some privileged material
belonging to the wife which could be put to good use by the
husband. This might only consist of impressions of the wife's
personality gained after many hours of confidence, which could
be exploited by a skilful advocate presented with those
impressions. In these circumstances the appearance of justice
will, to borrow Bryson J's words, not long "survive any general
impression that lawyers can readily change sides.”
Rourke J at 38
The injunction was granted.
But…
Insofar as reliance is placed on the "getting to know you" principle, a
moment's consideration of the way that litigation is conducted in Australia
shows that this cannot be accepted too literally, especially in relation to
counsel. There are many bodies such as Commonwealth and State
government entities, banks, insurers, media companies and many others
which are constantly engaged in litigation. Counsel retained to act on behalf
of such bodies inevitably acquire information, not confidential information in
the strict sense, but experience as to the corporate culture of the clients, their
internal policies, the way they deal with litigation, tactics, the personalities of
important decision-makers and so forth. I do not accept that general
experience of that kind would impose what presumably on the respondent's
argument would be lifetime restraints on counsel from acting against such a
body.
Heerey J in Mintel International Group v Mintel (Australia) Pty Ltd
(2000) 181 ALR 78 at 44
So back to this one…
You acted for Ann and John in their property conveyance and
some traffic related matters years ago.
Now Ann wants you to act for her in divorce and settlement
matters against John.
Can you act?
Basically a former client conflict
Duties to former client – confidentiality
See House v Altimas [2012] FamCA 625
But before we get to former client
conflicts…
Does the nature of client confidentiality have
any ramifications for concurrent client issues?
Strict duty
“It is a duty to keep the information confidential,
not merely to take all reasonable steps to do so.
Moreover, it is not merely a duty to not to
communicate the information to a third party.
It is a duty not to misuse it, that is to say, without
the consent of the former client to make any use of
it or to cause any use to be made of it by others
otherwise than for his benefit.”
Lord Millet Prince Jefri Bolkiah v KPMG [1999] 2 AC 222
So what about…
Solicitor Fred Friendly acts for Big Bucks Finance Inc
mostly in employment and insurance matters. Another of
his clients advises Fred that he is in the process of
purchasing Big Bucks and wants to retain him to handle
the legals.
•BUT: Fred knows that Big Bucks is in financial difficulty
and would be a very risky venture.
•What are Fred’s duties to each of these clients?
•Can he act for both?
Rules - LIV
4. Acting Against a Former Client
A practitioner must not accept an engagement to act for another person in
any matter against, or in opposition to, the interest of a person ("the former
client"):
(a) for whom the practitioner (or, in the case of a practitioner not being a
firm, the practitioner's current or former firm) or the former firm of a
partner, director or employee of the practitioner or of the practitioner's
firm has acted previously and has thereby acquired information
personally, confidential to the former client and material to the matter;
and
(b) if the former client might reasonably conclude that there is a real
possibility the information will be used to the former client's detriment.
Rules - ASCR
10.Conflicts concerning former clients
10.1 A solicitor and law practice must avoid conflicts between
the duties owed to current and former clients, except as
permitted by Rule 10.2.
10.2 A solicitor or law practice who or which is in possession
of confidential information of a former client where that
information might reasonably be concluded to be material to
the matter of another client and detrimental to the interests
of the former client if disclosed, must not act for the current
client in that matter UNLESS:
10.2.1 the former client has given informed written consent to
the solicitor or law practice so acting; or
10.2.2 an effective information barrier has been established.
Then there’s an annoying
presumption
What’s in your head is in
everybody’s head.
So your whole firm is infected.
AND
Any new firm you
might move to.
The Risk
• Former client may seek an injunction to prevent your
new employer from acting on the basis that your
new employer:
– Possesses confidential information that is:
– Material to the current matter; AND
– There is a reasonable potential for this information to be
used to their detriment.
– NB The risk of disclosure must be real - but not substantial
or inevitable
Prince Jefri Bolkiah v KPMG [1999] 2 WLR 215
Can you rebut the presumption?
Perhaps – but you need to show that your firm
has adequately quarantined any confidential
information How?
Robust, existing Chinese Wall (Information
Barrier) policies!
See LIV/NSWLS/QLS Guidelines
Chinese Walls Policies include
• the physical separation of the various departments in
order to insulate them from each other
• An educational program, normally recurring, to
emphasise the importance of not divulging confidential
information
• strict and carefully defined procedures for dealing with
a situation where it is felt the ‘wall’ should be crossed,
and
• well maintained records of such occurrences
• monitoring by compliance officers of the effectiveness
of the wall
• Disciplinary sanctions for breaches of the wall.
APT v Optus [2005] NSWSC 550
But Beware
Information barriers aren’t as robust as we think
APT v Optus [2007] NSWSC 350.
Client consent
Can sometimes “cure” a conflict as the rules are based on
fiduciary principles that aim to benefit the client by
ensuring the lawyer’s undivided loyalty. Hence clients can
waive the right.
BUT: Consent must be “Fully Informed”: Whether
consent meets this standard is a matter of fact. Yet “valid
client consent is almost invariably premised upon the
lawyer having made full, frank and complete disclosure to
the client of the nature and extent of the lawyer’s interest
in the proposed dealing or transaction, ideally expressed
in writing.”
(G. Dal Pont “Riley Solicitors Manual” 6005.10)
“[The disclosure] must be a conscientious
disclosure of all material circumstances, and
everything known to him relating to the
proposed transaction which might influence the
conduct of the client or anybody from whom he
might seek advice. To disclose less than all that
is material may positively mislead. Thus for a
solicitor to merely disclose that he has an
interest, without identifying the interest, may
serve only to mislead the client into an enhanced
confidence that the solicitor will be in a position
to better protect the client’s interest.”
Street CJ Law Society of NSW v Harvey [1976] 2 NSWLR 154 at 170
Self Interest
In situations where the lawyer’s own interest is
involved it is prudent to insist that the client
seeks independent legal advice before
continuing to act. The purpose is to ensure that
the lawyer’s interests are neither preferred nor
seen to be preferred over those of the client.
Conflicts concerning solicitor’s own
interests - LIV
9. Avoiding Conflict of Interest (where practitioner's own
interest involved)
9.1 A practitioner must not, in any dealings with a client 9.1.1 allow an interest of the practitioner or an associate of
the practitioner to conflict with the client's interest;
9.1.2 exercise any undue influence intended to dispose the
client to benefit the practitioner or an associate of the
practitioner in excess of the practitioner's fair remuneration
for the legal services provided to the client;
9.2 A practitioner must not accept instructions to act or
continue to act for a person in any matter when the
practitioner is, or becomes, aware that the person's interest in
the matter is, or would be, in conflict with the practitioner's
own interest or the interest of an associate.
Conflicts concerning solicitor’s own
interests - ASCR
12.1
A solicitor must not act for a client where there is a conflict
between the duty to serve the best interests of a client and the interests of
the solicitor or an associate of the solicitor, except as permitted by this Rule.
12.2
A solicitor must not exercise any undue influence intended to
dispose the client to benefit the solicitor in excess of the solicitor’s fair
remuneration for legal services provided to the client.
12.3
A solicitor must not borrow any money, nor assist an associate to
borrow money, from:
12.3.1 a client of the solicitor or of the solicitor’s law practice; or
12.3.2 a former client of the solicitor or of the solicitor’s law practice who
has indicated a continuing reliance upon the advice of the solicitor or of the
solicitor’s law practice in relation to the investment of money,
Unless
UNLESS the client is:
(i)
an Authorised Deposit-taking Institution;
(ii)
a trustee company;
(iii)
the responsible entity of a managed investment scheme registered
under Chapter 5C of the Corporations Act 2001 (Cth) or a custodian for such a
scheme;
(iv)
an associate of the solicitor and the solicitor is able to discharge the
onus of proving that a full written disclosure was made to the client and that
the client’s interests are protected in the circumstances, whether by legal
representation or otherwise; or
(v) the employer of the solicitor.
See LIV r 11.2
Scope
Any gain by the solicitor beyond reasonable
remuneration. Again the fiduciary principle of
independent, undivided loyalty is being preserved.
Typical issues:
• Borrowing from a client
• Lending to a client
• Purchasing/selling from/to a client
• Making a secret profit/referral fee from the
representation
• Receiving any other benefit apart from reasonable fee
Another Presumption
“The reason why the presumption applies…is
that…solicitors are trusted and confided in by
their…clients to give them conscientious and
disinterested advice on matters which
profoundly affect…their material well-being. It is
natural to presume that out of that trust and
confidence grows influence.”
Nourse LJ Goldsworthy v Brickell [1987] All ER 853 at 868
Another Rebuttal
The lawyer who has received a benefit beyond
their reasonable fee would need to satisfy a
court that the benefit was a result of a fully
informed decision by a person who had the
capacity and freedom of judgment necessary to
confer the benefit.
This would invariably require independent legal
advice (see NSW Solicitors’ Rules 11.2 – 11.3)
Exceptions include referral fees
12.4.3 receiving a financial benefit from a third party in relation to any
dealing where the solicitor represents a client, or from another service
provider to whom a client has been referred by the solicitor, provided that the
solicitor advises the client:
(i)
that a commission or benefit is or may be payable to the solicitor in
respect of the dealing or referral and the nature of that commission or
benefit;
(ii)
that the client may refuse any referral, and
the client has given informed consent to the commission or benefit received
or which may be received.
12.4.4 acting for a client in any dealing in which a financial benefit may be
payable to a third party for referring the client, provided that the solicitor has
first disclosed the payment or financial benefit to the client.
Referral fees remain prohibited in WA – and were the most
contested issue in drafting the ASCR.
Sexual Relationships with Clients
Issues?
No specific Conduct Rules
But – Don’t!
• It can represent an abuse of power/dependency. Clients are
often vulnerable and the lawyer’s role is one of protection.
• The client may be in fear of the lawyer ceasing to represent
them.
• Blurring of personal/professional boundaries can impact on
legal professional privilege and confidentiality - LPCB v
Morel (2004) 88 SASR 401.
• Compromises objectivity & independence and is likely an
abuse of the fiduciary relationship.
And not with the Other Side either
R v Szabo [2000] QCA 194
Failure by defense counsel to disclose a prior de
facto relationship with the prosecutor resulted
in a retrial on the basis of perceived
unfairness.
The Principle Behind the Law is…
“No man can serve two masters”
Lawyers must give full and undivided
representation to their clients and this becomes
impossible if the interests of the two (or more)
clients actually or potentially clash.
Blackwell v Barroile Pty Ltd [1994] 51 FCR 347
Ponderables
Can I breach confidence if…
…my client threatens their ex –
Or their boss
Or their neighbour
(or me!)
with harm?
Exceptions to Confidentiality
LIV rule 3
3.1.1 the client authorises disclosure;
3.1.2 the practitioner is compelled by law to disclose;
3.1.3 the practitioner discloses information in
circumstances in which the law would probably compel
its disclosure, despite a client's claim of legal professional
privilege, and for the sole purpose of avoiding the
probable commission or concealment of a serious
criminal offence;
3.1.4 the information has lost its confidentiality; or
3.1.5 the practitioner obtains the information from
another person who is not bound by the confidentiality
owed by the practitioner to the client and who does not
give the information confidentially to the practitioner.
ASCR
9.2 A solicitor may disclose confidential client information if:
9.2.1 the client expressly or impliedly authorises disclosure;
9.2.2 the solicitor is permitted or is compelled by law to disclose;
9.2.3 the solicitor discloses the information in a confidential setting,
for the sole purpose of obtaining advice in connection with the
solicitor’s legal or ethical obligations;
9.2.4 the solicitor discloses the information for the sole purpose of
avoiding the probable commission of a serious criminal offence;
9.2.5 the solicitor discloses the information for the purpose of
preventing imminent serious physical harm to the client or to
another person; or
9.2.6 the information is disclosed to the insurer of the solicitor, law
practice or associated entity.
Before you act, consider
 Is my client capable of carrying out the threat? Any
history of violent behaviour or previous threats should
be considered.
 Other than the current outburst is my client acting or
thinking irrationally?
 Does my client have access to weapons or other means
of carrying out the threat?
 Is my client responsive to the rational advice being
provided?
 Do I believe the threat may be real?
Then ensure any disclosure is limited and everything is
well documented.
Firing a client 1
You are 8 weeks into a trial and your client has maintained that
they were nowhere near the scene of the crime at the time in
question.
The Crown now produces new evidence of your client’s
presence at the scene during the time in question.
Faced with the new evidence your client changes his story. Yes
he now remembers he was there but did not commit the crime.
What do you do?
Is it just cause for withdrawal?
R v Nerbas [2011] QCA 199
Solicitors advised their client, Mr Nerbas,
• to plead guilty and
• that they had to withdraw as they were now conflicted.
Nerbas continued unrepresented, pleaded guilty as advised and then
appealed the decision.
The Supreme Court upheld the appeal.
“However in my view, this change in his instructions would not have required
or permitted his counsel and solicitor to withdraw from the case. They were
precluded from conducting his case upon any factual basis which they knew to
be false. But they would not have been placed in that position by this change
of instructions. They would have been understandably sceptical about the
applicant’s new instructions. But it was not for them to adjudicate upon their
truth.” McMurdo J at 50
LIV
6. Termination of Engagement
6.1 A practitioner must complete the legal services required by
the practitioner's engagement, unless 6.1.1 the practitioner and the practitioner's client have
otherwise agreed;
6.1.2 the practitioner is discharged from the engagement by the
client;
6.1.3 the practitioner terminates the engagement for just cause,
and on reasonable notice to the client; or
6.1.4 in the case of a practitioner not being a firm, the
practitioner’s engagement is terminated by the practitioner’s
firm.
ASCR 13.1
ASCR
13.1 A solicitor with designated responsibility for a client’s
matter must ensure completion of the legal services for that
matter UNLESS:
13.1.1 the client has otherwise agreed;
13.1.2 the law practice is discharged from the engagement by
the client;
13.1.3 the law practice terminates the engagement for just
cause and on reasonable notice; or
13.1.4 the engagement comes to an end by operation of law.
Firing a client 2
Your client is a committed conservationist who wishes
to challenge a government decision to allow
construction of domestic dwellings in an
environmentally sensitive area.
On examining the grounds for appeal you realise this is
a hopeless case and instruct your client accordingly.
Your client insists on proceeding.
Is this just cause for terminating the retainer?
What are the issues you need to consider?
The curious case of Buxton v
Mills-Owen
[2008] EWHC 1831 (QB) – Justice Mackay
[2010] EWCA Civ 122; [2010] WLR (D) 49 – Court
of Appeal
Entire contract?
Can you claim your fees?
Duties to the Court v Duties to Client?
What if the case is truly ‘hopeless’?
Hopeless Cases
“[I]t is one thing to present a case which is barely arguable
(but arguable nevertheless) but most likely to fail; it is quite
another to present a case which is plainly unarguable and
ought to be so to the lawyer who presents it. In my opinion,
with respect, it is improper for counsel to present, even on
instructions, a case which he or she regards as bound to fail
because, if he or she so regards it, he or she must also regard
it as unarguable.”
Davies JA, Steindl Nominee Pty Ltd v Laghaifer [2003] 2 Qd R 683 at [24]
See Legal Profession Complaints Committee v Carlose [2012]
WASAT 104 for an example of disciplinary proceedings being
brought against a lawyer as a result of pursuing a hopeless
case.
And don’t forget….
Our conduct and behaviour should reflect the character we aspire to have as
a profession.
This means that as individuals engaged in the profession and as a profession:
We primarily serve the interests of justice.
We act competently and diligently in the service of our clients.
We advance our clients' interests above our own.
We act confidentially and in the protection of all client information.
We act together for the mutual benefit of our profession.
We avoid any conflict of interest and duties
We observe strictly our duty to the Court of which we are officers to ensure the
proper and efficient administration of justice
We seek to maintain the highest standards of integrity, honesty and fairness in
all our dealings.
NSW Law Society Statement of Ethics
“Riley’s” NSW Solicitors Manual
In the end, it all comes down to 10
words