Lawyer-Client Conflict of Interest, Slides of Acting

Download Lawyer-Client Conflict of Interest and more Slides Acting in PDF only on Docsity! Lawyer-Client Conflict of Interest (1) Is there a lawyer client relationship? - Yes - No – doesn’t apply (2) Rationale - Conflicts of interest threaten to compromise the professional’s duties of loyalty, diligence, confidentiality and care to the interests of the client. (3) Is it financial or non-financial? - Financial: o Such a conflict arises where a practitioner, or person associated with a practitioner, stands to gain some material benefit in connection with the retainer, apart from the practitioner’s proper professional fee - Non-financial: cannot bring required degree of independence! o A conflict of interest may also arise where a practitioner cannot bring the necessary degree of objective and independent judgement to a case because of the nature of their personal interest in the client, or the client’s case. FINANCIAL INTERESTS - (1) GENERAL RULE (r 12.1): Lawyer must not act for 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 - (2) Identify lawyer’s interest (see below) o Misconduct need not amount to an ‘offence’ o It must fall within the legal definition of wrongdoing - (3) What should the lawyer do? o Serious conflicts – avoid/remove the conflict o Less serious conflicts – fully disclose the conflict to the client and obtain the client’s consent to continue (cf. Harvey) (a) Fees and billing - [L] must not exercise undue influence to encourage [C] to give any benefits to L beyond fair remuneration for legal services provided: 12.2 ASCR; 46 BR (b) Gift from Client to Lawyer – receiving a benefit under a WILL [L] must not receive moneys from a client’s will unless the client was [immediate family of L or colleague of L]: 12.4 ASCR [L] will NOT have breached this rule, merely by drawing a will appointing him/her/associate as executor, provided the client is informed and signs the will: 12.4.1 ASCR i. Any entitlement of solicitor/firm/associate to claim executor’s commission ii. Inclusion of provision entitling solicitor to charge legal costs in relation to administration of estate iii. If solicitor/firm/associate has entitlement to claim commission, that the client could appoint someone who might make no claim for executor’s commission Will not amount to a breach, per 12.4.2 ASCR if will/other instrument is drawn under which solicitor [practice/associate] will or may receive a substantial benefit (beyond proper entitlement to fees) provided the person instructing the solicitor is either: i. Member of solicitor’s family ii. Solicitor or member of immediate family of a solicitor, who is a partner, employer, employee of the solicitor (c) Referrals (kickbacks) Rule 12 not breached merely by receiving a financial benefit from a third party [i.e. referral fees] provided the solicitor advises the client per 12.4.3 ASCR: i. That a commission/benefit is or may be payable to the solicitor in respect of the dealing or referral and the nature of that commission/benefit ii. That the client may refuse any referral a. The client has given informed consent to the commission or benefit received or which may be received Acting for a client in any dealing in which a financial benefit may be payable to a third party for referring the client [i.e. client referral] provided the solicitor has first disclosed the payment or financial benefit to the client: 12.4.4. ASCR (d) Client dealing with Lawyer – Borrowing Transactions L must not borrow any money, nor assist an associate to borrow money from: 12.3 ASCR i. A client of the solicitor/practice ii. A former client of the solicitor/practice who was indicated a continuing reliance upon the advice of solicitor/practice in relation to investment of money Unless the client is - Authorised Deposit-taking Institution (i.e. bank or financial institution) - Trustee company - Responsible entity of managed investment scheme under Corporations Act - Associate of the solicitor and solicitor is able to discharge the onus of proving that full written disclosure was made to the client and their interests are protected - Employer of the solicitor NON-FINANCIAL INTERESTS - (1) GENERAL RULE (r 12.1): Lawyer must not act for 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 - (2) Problem with non-financial interest of solicitor: cannot bring the necessary degree of objective and INDEPENDENT JUDGEMENT to a case because of the nature of their personal interest in the client, or the client’s case. o Misconduct need not amount to an ‘offence’ o It must fall within the legal definition of wrongdoing - (3) What should the lawyer do?