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Date: Tue, 20 Jun 2006 18:04:30 +1200 From: Barry Allan Subject: Lawyer's No Conflict Rules
I've had a colleague who is into legal ethics raise a question which has so far gone unanswered in a New Zealand context, and am looking for thoughts. We both actually thought there would be a simple and straight forward answer, but haven't seen it. The concern is with a duty upon law firms not to take on competing instructions - not necessarily in the same matter, although that is an obvious context. We have had a case where a firm mounting a hostile takeover used the same law firm as that used by the target, a situation which was saved (according to our court) by the construction of a fairly leaky chinese wall between the two legal teams. Clients would be alarmed if they thought their lawyer's attentions are not fully with them as a result of divided loyalties, and not all divided loyalties lead to measurable outcomes - such is in a contested custody case. There are various statements made in the cases which accept such a duty, and conflicts of interest are an obvious concern of any rules of professional practice. The question is: insofar as we might recognise such a duty, where might we locate it? Tort seems dubious, as it would involve proof of loss, and here we're talking more in the context of suspicion of pulling punches rather than being able to prove it. If lawyers were actually good about talking to clients about potential for conflicts and how they might be resolved, we might find a contractual duty of loyalty, but it could also provide for a ready exclusion of liability. My particular stance would be to see the lawyer as fiduciary, which does not seem a big claim to make, although saying that brings with it a duty of loyalty of the sort contended for (or in Lionel Smith's terms, a consequent prophylactic duty) is not exactly a given. By locating this sort of duty within a fiduciary context, we have an appealing strictness of obligation, without any need to test for loss. But, at least in this part of the world, there seems to be very limited support for such an approach. Any thoughts?
Barry
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