Module 4a: Concurrent COIs

Consequences of failing to comply with COI rules (3)

• Subject to discipline,

• possibly disqualified from case,

• may be subject to civil liability for malpractice

If a conflict of interest is apparent before a lawyer takes on a client’s matter:

Lawyer must not take it on unless the conflict can be resolved (such as, for some conflicts, with informed consent)

If a conflict of interest is apparent after a lawyer takes on a client’s matter:

lawyer must withdraw unless the conflict can be resolved

COI Imputation rule + 2 exceptions

RULE: conflicts are contagious! If lawyer disqualified from case bc of COI, everybody else at firm is too!

EXCEPTIONS: other lawyers at firm can take case if

• conflict is uniquely personal to the disqualified lawyer;

• conflict can be cured by screening that lawyer from case (eg, blocking that lawyer’s access to case files);

• sexual relationships aren’t imputed

What is covered under ‘firm’ — 6 factors

law firm, govt agency, corp law dept, etc.

1) they have a formal agreement,

(2) they hold themselves out to the public as a firm,

(3) they share revenues and responsibilities,

(4) they have access to each other’s client files,

(5) they routinely talk about the matters they’re handling, and

(6) the purpose of the particular conflict rule would be served by imputing one lawyer’s conflict to the others

Concurrent Conflicts + 2 Types

Conflicts involving a current client,

2 Types: direct adversity or material limitation conflicts.

2 Requirements for Waiving Concurrent Conflicts + revocation note

• Reasonable belief of competent/diligent representation

• informed consent confirmed in writing from each affected client.

  • eg, Client gives oral informed consent + atty promptly memorializes via email/letter + sends that to client

  • EXCEPTION: if your duty of confidentiality means you can’t fully disclose the conflict to other client, then you cannot get informed consent

NOTE on revocation: can be revoked by client at any time

Definition of Informed Consent

Awareness of all relevant circumstances, reasonable alternatives, and foreseeable ways the conflict might harm the client.

Confidentiality Exception to Informed Consent

If the duty of confidentiality prevents full disclosure of the conflict, informed consent cannot be obtained.

Revocation of Informed Consent

Informed consent to a conflict of interest can be revoked by a client at any time.

2 types of ALWAYS non-waivable Conflicts

When the lawyer is on both sides of the same litigation before a tribunal

• eg, asserting a claim by one client against another client that you represent in the same litigation or other proceeding in front of a tribunal

Representation is prohibited by law.

Direct Adversity Conflict Rule + Exception

you can’t represent a client if the representation is directly legally adverse to another current client.

EXCEPTION: mere economic adversity (eg, biz competitors, provided the clients aren’t adverse to each other in any of the matters) = no conflict; unnamed class members DO NOT = clients

4 EGs of Direct Adversity Conflict

• Representing one client in a case and representing their opponent in a different matter

• Representing multiple clients in the same matter, and their interests are in actual conflict

• Vigorously cross-examining a current client while handling a matter for a different client

• Representation of a client in a matter adverse to an existing client of the lawyer or firm

Material Limitation Conflict Rule

You cant represent a client if there is a significant risk that representation will be materially limited by other loyalties or interests, UNLESS the conflict is properly waived

EGs of material imitation conflicts

• Multiple representation – representing co parties in a case

  • More likely a conflict in CRIMINAL PROCEEDING, so you should avoid

  • OK in CIVIL PROCEEDING IF:

    • Must reasonably believe you can represent all parties well

    • Must explain consequences

    • Must get informed consent, confirmed in writing

      • NOTE ON AC PRIVILEGE: You MUST tell them that, bc they’re joint clients, if they sue each other later on, they won’t be able to assert the AC privilege for their comms w you

      • lawyer should explain that whatever one client discloses will be shared with the other client

  • Must re-address conflict if potential conflict becomes real

  • Must withdraw if reasonable lawyer would advise any client against consent

  • Must get consent of dropped clients if you continue to represent any co-parties

  • EG: if you can’t advocate for one party w/o harming another → conflict can’t be waived, no proper way to get around addressing the conflict properly

• Representing 2 clients in 2 diff cases and they have inconsistent legal positions

  • RULE: a significant risk of material limitation may arise if one client’s case is likely to become the controlling precedent for the other client’s case. In that situation, the lawyer would have to address the conflict. If either or both clients won’t consent, the lawyer would need to ask the court’s permission to withdraw from one or both cases.

  • a lawyer may take inconsistent legal positions in different tribunals at different times on behalf of different clients, and that on its own doesn’t create a conflict of interest. However, a conflict exists if there is a significant risk that a lawyer's action on behalf of one client will materially limit the lawyer’s representation of another client in a different case: for example, when a decision favoring one client will create a precedent likely to seriously weaken the position taken on behalf of the other client

    • Taking inconsistent legal positions in separate cases poses a conflict in certain circumstances, such as when a decision favoring one client will create a precedent that will seriously weaken the other client’s position

• Conflicts Caused by Lawyer’s personal interests

  • Any financial interest or personal relationship that might affect your work on the case

  • Remember, uniquely personal conflicts are not imputed to the firm unless it would affect other lawyers at the firm.

• Conflicts Caused by Lawyer’s duties to a former client of 3rd party (eg fiduciary corp director)

  • RULE: Generally, when these conflicts exist, the lawyer may represent the client if: (1) the lawyer reasonably believes that the other persons’ interest (that is, the former client or third person) will not adversely affect the representation; and (2) the client gives informed consent, confirmed in writing.

    • EG: current client wants to sue former client and you have info ab former client that you can’t disclose to current client → this = material limitation

    • 3rd party EG: you are a BoD member to xyz corp and client wants to sue xyz corp

• Conflicts Raised by Liability Insurance

  • Liability insurance policies often provide that the insurance company will select and pay for a lawyer to defend the policyholder in suits arising out of events covered by the policy. The policyholder, in turn, promises to cooperate with the defense. Generally, the policyholder wants to minimize their risk of paying money out of their own pocket, while the insurance company wants to minimize what it must pay.

  • RULE: lawyer’s ethical obligations are governed by RPC, not insurance K

material limitation conflict: Co-Parties in Criminal vs. Civil Proceedings

Multiple representation is high-risk and discouraged in criminal cases, but permissible in civil cases with informed consent confirmed in writing.

material limitation conflict: Attorney-Client Privilege Risk in Joint Representation

Joint clients must be informed that attorney-client privilege does not apply between them if they later sue each other.

material limitation conflict: Inconsistent Legal Positions in Different Cases

Creates a conflict if a decision favoring one client will create a precedent that seriously weakens the position of the other client.

current client conflict — you can’t use info relating to the rep of the client to the client’s disadvantage, unless (2 things)

• client gives you informed consent (which does NOT need to be in writing); or

• Exception to duty of confidentiality applies, or disclosure is otherwise allowed under the rules

  • EG: you may need to tell the ct that client persists on committing perjury

Rule for entering biz transactions w your client + 4 exceptions

You can’t enter into a biz transaction w a client or knowingly acquire an ownership, possessory, security, or money interest that is adverse to a client UNLESS

• Transaction is fair + reasonable to client

• The terms are fully disclosed to the client in a writing that the client can reasonably understand

• The client is advised in writing to get the advice of an independent lawyer about the arrangement before entering into it (and given a reasonable opportunity to do so) ; AND

• ** client must give informed consent in writing that the client signs

NOTE: this rule doesn’t apply to standard commercial transactions bw you and client for goods that client regularly markets to others, or to ordinary fee agmt bw lawyer/client

Rule for acquiring an interest in the cause of action or subject matter of the litigation + exceptions

A lawyer cannot acquire a proprietary interest in the subject matter of the litigation — no client consent can fix this.

EXCEPTIONS

• Contingent fees

• Lien on client’s recovery (if authorized by that jx’s law)

• Lawyer may accept property (e.g., stock) instead of money if the business-transaction requirements are satisfied.

Acquiring an interest in the cause of action or subject matter of the litigation — literary/media rights

lawyer can’t have interest in book, movie, or other portrayal substantially based on info relating to the case during representation (but can afterwards)

Acquiring an interest in the cause of action or subject matter of the litigation — gifts (2 gen rules)

• Can’t solicit any substantial gift from a client to you or for your benefit (including gift in their will) UNLESS youre related to the client

• Can’t prepare any instrument (eg will) giving lawyer or lawyer’s relative a substantial gift UNLESS lawyer/donee related to client

Rule for lucrative appointments

A lawyer may seek a fee-paying role (e.g., executor or counsel), for themselves or their firm, but cannot do so if their self-interest taints their advice under conflict-of-interest rules.

Rule for financial assistance to client + 3 exceptions

no financial help to client in connection with pending or contemplated litigation AND can’t guarantee a loan from someone else to client

• EG: client wants loan from lawyer and lawyer has his wife make the loan on his behalf → NOT ALLOWED

3 EXCEPTIONS

1. May advance client court costs and litigation expenses (eg filing fees, expert witness fees)

2. May pay court costs and expenses for indigent clients

3. Pro Bono indigent clients ONLY – if representing indigent client pro bono, may provide client w modest gifts for basic living expenses – but can’t advertise/promise this nor ask for reimbursement

If its a gift to client, you can’t ask for reimbursement – must be a true gift

Aggregate settlement agmt rule: what is lawyer’s responsibility here? (rule + 2 exceptions)

lawyer must not participate in the making of an aggregate settlement agmt (meaning an agreement in which multiple parties, whether co-plaintiffs or co-defendants, settle their claim at the same time) , UNLESS

• Fully explain settlement, including claims involved + amts each person is getting

• Each client must give informed consent in writing + signed

3rd party paying client’s legal fees – ok if 3 reqs met

• Client must give informed consent (no writing req)

• 3rd party can’t interfere w lawyer-client relationship

• Cannot reveal client’s confidential info to 3rd party

rule + exceptions for sexual relationships w clients

Pre-existing = OK unless material COI; during representation = NO. Org client → no sex with your supervisor/contact.

A lawyer cannot have a sexual relationship with a client during the representation, even with consent and even if it doesn’t affect the representation.

• When representing an organization, a lawyer cannot have a sexual relationship with someone who supervises, directs, or regularly consults with the lawyer about the organization’s legal matters.

  • Not imputed to other lawyers at the firm.

EXCEPTION: A pre-existing sexual relationship is allowed unless it materially limits the lawyer’s judgment → then it’s a standard conflict

material limitation conflict: representing new client against a former client

Cannot represent a new client against a former client in the same or a substantially related matter without informed consent confirmed in writing.

Definition of Substantially Related Matters

The same transaction or legal dispute, or a substantial risk that confidential information would materially advance the new client's position.

Screening Requirements at New Firms

Disqualified lawyer must not work on the case, share specific fees, have file access, or discuss the case, and former client must receive written notice.

Prospective Client Definition

A person consulting with a lawyer in good faith about the possibility of forming an attorney-client relationship.

Prospective Client Conflict Rule

Cannot represent a client in a substantially related matter if confidential information obtained from a prospective client could significantly harm them.

Government Employee Moving to Private Practice

Cannot represent a private client in the same matter if the lawyer worked personally and substantially on it while in government, without agency consent.

Definition of a 'Matter' in Government Work

A specific set of facts involving specific parties, such as drafting a contract, as opposed to broad regulations.

Judge or Third-Party Neutral Moving to Private Practice

Cannot represent a client in a matter the lawyer was personally and substantially involved in as a judicial actor or neutral without consent of all parties.

Negotiating Private Employment while in Government Service

Government employees, judges, and neutrals must not negotiate private employment with any party involved in a matter they are personally and substantially working on.

Duty of Competence

Representing clients with the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation.

Handling Unfamiliar Legal Matters

A lawyer may handle an unfamiliar matter by associating with a competent lawyer, learning the law in time without undue expense, or handling an emergency.

Duty to Plan for Solo Practitioners

Solo practitioners must designate another competent lawyer to review client files and take protective action in case of untimely death or disability.

Duty of Diligence

Acting with reasonable diligence and promptness, pursuing a client's matter with zeal, and seeing the matter through to completion.

Ethics Violation as Evidence of Malpractice

Violating an ethics rule does not automatically constitute malpractice, but courts treat it as relevant evidence of malpractice.

Theories of Legal Malpractice

Intentional tort, breach of fiduciary duty, breach of contract, and negligence.

Elements of a Negligence Malpractice Claim

Duty of care, breach of duty, but-for causation, and actual damages.

Settling Malpractice Claims with Clients

Must advise the client in writing to obtain independent counsel and give them a reasonable opportunity to do so before settling.

Limiting Malpractice Liability

Agreements limiting liability are prohibited unless the client is independently represented by counsel when making the agreement.

Meritorious Claims and Contentions

Lawyers cannot bring frivolous claims or defenses lacking a good faith argument under current law or for changing the law.

Duty to Expedite Litigation

Make reasonable efforts to expedite litigation consistent with the legitimate interests of the client, avoiding delay for financial gain.

Definition of a Tribunal

A court, a binding arbitrator, or a legislative/administrative body acting in an adjudicative capacity.

Duty of Candor Regarding Controlling Law

Must disclose directly adverse controlling legal authority from the controlling jurisdiction if opposing counsel has not disclosed it.

Handling Known False Evidence

Lawyers cannot offer evidence known to be false, and must take reasonable remedial measures if false evidence is inadvertently introduced.

Payment of Expert Witnesses

Permissible to pay reasonable travel expenses and compensation for lost wages, but prohibited to pay contingent fees or testimony-based bonuses.

Ex Parte Communications

Prohibited from speaking ex parte with judges or court officials about the merits of a case without opposing counsel present, except as authorized by law.

Trial Publicity Rule

Lawyers connected to a case must not make public statements that they should know are substantially likely to cause material prejudice.

Advocate as Witness Rule

A lawyer cannot act as an advocate at trial if likely to be a necessary witness, subject to narrow exceptions like substantial hardship.

Communicating with Represented Persons

Cannot communicate about the subject of representation with a person known to be represented by counsel without that counsel's consent.

Entity Representation Conflict Rule

A lawyer employed by an organization represents the organization itself, not its individual officers, directors, or employees.

Sarbanes-Oxley Reporting Requirements

Securities lawyers with credible evidence of a material securities violation must report it to the chief legal officer or the board of directors.