Lawyers have a duty of care to look after their clients' interests. They also have a duty to avoid any conflict of interest.
What is a 'conflict of interest' and how does it arise?
A conflict of interest can arise when a lawyer’s own interests, relationships, duties or obligations means they cannot act in their client’s best interests.
Your lawyer must identify and manage any conflict between the duties they owe you, the duties they owe to another client, or their own personal interests.
Examples could include when your lawyer:
- is representing you against another former client
- is representing you and another client in the same legal issue but you have differing interests in the outcome
- has a personal or business interest that conflicts with their ability to provide independent advice to you.
Your lawyer cannot act in these types of circumstances, even if there is just the potential for a conflict of interest, unless they ensure you are fully aware of all of the relevant information and you can then provide your informed consent in writing (see below).
Representing you against a former client
Lawyers and law practices have an obligation to avoid conflicts between the duties they owe to their current clients and their former clients. The lawyer-client relationship does not completely end when a legal issue comes to an end or when the client goes to a different lawyer. Lawyers and law practices have an ongoing duty to their former clients to maintain their confidentiality.
If a lawyer or law practice has confidential information about a former client, they should not agree to act against their former client in any issue where having that information could have a negative impact on the interests of their former client if it was disclosed, unless the former client has agreed to the information being disclosed or there are barriers in place that prevent the information being used.
If you are a former client
If your former lawyer is now working for others on the other side of a legal issue it, doesn’t always mean there is a conflict of interest.
First, However, your former lawyer must protect confidential information they obtained while acting for you. If they hold information about you that could be important to a future matter, and harmful to your interests if disclosed, they may not be able to act for the new client.
There are some exceptions, including where your former lawyer has contacted you, provided information to you and then received written consent from you to the information being disclosed and used or alternatively there are effective information barriers in place. You should only give your consent to this if you are confident that no confidential information the former lawyer holds about you could be used against you, and if you are sure this is a separate issue to any previous dealings you had with that lawyer. That said, should you find yourself in this position, you should consider obtaining independent legal advice.
How can information be kept confidential?
Information barriers can be used by law practices to isolate lawyers in a practice who do have conflicts. The barrier prevents them from being involved in, or having a say in, an issue involving one of their former clients. The courts recognise that these information barriers, if enforced effectively, can be enough to prevent confidential information from being misused.
It may be necessary for example, if a lawyer moves from one law practice to another, and their new employer is acting against one of their former clients. It can also happen in regional areas where there may be a small amount of law practices for consumers to choose from.
Acting for you and someone else in the same legal issue
A lawyer can sometimes act for more than one client in the same or related matters. This most commonly happens when two people buy a property together. However, acting for more than one client can create difficulties in their interests differ or change.
Before the lawyer or law practice starts acting for both clients, they have to formally advise them of the arrangements, and both clients must have given their informed consent to proceed.
If an actual conflict arises between the clients’ interests, the lawyer or law practice must stop acting for one or both parties immediately. The lawyer or law practice may still represent one client provided their duty of confidentiality is maintained, and the other client has given their informed consent to the new arrangements.
Lawyers or law practices who don’t obtain informed consent from one or all clients before starting to act in a legal issue, may have disciplinary action brought against them by the Victorian Legal Services Commissioner.
When your interests and your lawyer's personal interests conflict
Lawyers and law practices must not allow their own interests to come into conflict with the interests of their clients.
Lawyers are not permitted to put their own interests (personal, financial or other interests) ahead of their client. This means that a lawyer must not advise their clients to become involved in their business interests, or the interests of their associates (business partners, friends or relatives).
Lawyers are also not allowed to borrow money from their clients, or from a former client of their law practice (save for very limited circumstances as set out in Rule 12.2 of the Australian Solicitors Conduct Rules).
Case study examples
Example 1
Callum and Daniel were together charged with making drugs in a lab and selling them on the street. They both employed Lorenzo as their lawyer to defend the charges.
Callum has a long criminal history and his partner told him that if he goes into prison again for a long time she will leave him and take their children interstate. She has asked him to talk to his lawyer about pleading guilty and possibly giving evidence against Daniel with hopefully a reduction in the number of charges and potentially a shorter prison term. If Callum does this it will make it difficult for Daniel to plead not guilty in court.
Once Callum told their lawyer Lorenzo that he wants to do what his partner wants, he cannot act for them both as the outcomes Callum and Daniel want from his representation are different. It is a conflict of interest.
Example 2
Tom and Rebecca have been married for 10 years, but the relationship has broken down. Tom consults a local family lawyer about obtaining a divorce and has an initial meeting at which he shares sensitive financial details with them. After that first meeting, Tom decides he does not want to retain this lawyer.
Subsequently, Rebecca approaches the same lawyer to act for her in the divorce matter with Tom. The lawyer cannot act for Rebecca because of the conflict of interest created through Tom’s initial disclosures to them.
Conflict of interest and informed consent
A lawyer can act for two or more clients in the same or related issues where the clients’ interests are inconsistent if the lawyer has taken all relevant clients through an informed consent process, and gains written consent. This is only allowed if the lawyer continues to be able to act in the best interests of all clients.
The requirements for informed consent will depend on all the circumstances of each case. If you are planning on providing consent for your lawyer to act where there is the potential for conflict of interest, you should only do so if you are fully aware of all the relevant information including:
- information about the conflict or potential conflict
- the potential advantages or disadvantages of the lawyer acting for all relevant clients
- that you can seek another alternate legal representative
- how your lawyer intends to manage the conflict of interest, protect your interests and keep your information confidential.
It is your lawyer’s responsibility to make sure that you understand the situation and are comfortable to go ahead. You should also consider seeking independent legal advice before providing consent.
Questions to ask your lawyer if you are concerned about conflict of interest
- Have you done a conflict of interest check?
- How will you, and your law practice, put my interests first?
- Are you, or anyone else at your law practice, working for someone else related to my case?
- Have you, or anyone else at your law practice, ever worked for someone else related to my case?
- If so, what will you do to make sure others at your law practice working for someone related to my case don't have access to and can't see information about me and my case?