Cameron Miranda
A conflict of interest arises when a lawyer's interests are placed ahead of their client's. This can occur when a lawyer has a personal stake in the outcome of a case or has an obligation to another party. If a lawyer fails to disclose a conflict of interest and it results in legal malpractice, the client may have grounds to sue for breach of fiduciary duty and violation of their ethical duty. However, it's important to note that not all conflicts of interest are intentional, and lawyers are required to perform conflict checks to prevent such issues. In some cases, informed consent from the client can allow the lawyer to continue representation despite a conflict.
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What You'll Learn
Suing for conflict of interest
A conflict of interest arises when a lawyer's interests are placed ahead of their client's interests. This can occur when attorneys have a conflict of interest—a situation that makes it difficult for a lawyer to put their best efforts into a case because they are attempting to serve their interests or those of another party rather than the client's.
Lawyers and law firms must not undertake or continue representations in which they have a conflict of interest. A conflict occurs when the representation will be directly adverse to another client, or there is a significant risk that the representation of one client will be materially limited by the lawyer’s responsibilities to another client, former client, or third party.
If you believe that your attorney has committed an act of legal malpractice or has an interest that conflicts with the issues in your case, you should speak to a local lawyer who specializes in such actions immediately for further legal guidance. If you find that your case has been compromised due to a conflict of interest, it’s important to find a law firm that has the necessary expertise and experience to successfully handle your case.
In addition to or even in lieu of informed consent, a firm may sometimes continue to represent a client, notwithstanding certain conflicts of interest, if timely and adequate screening measures are implemented. However, screening is not available to resolve every conflict.
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Malpractice lawsuits
A conflict of interest occurs when a lawyer's interests or efforts are divided between their own personal interests and their client's interests. This may occur when a lawyer has a personal stake in the outcome of a case, or when they represent two parties with competing interests. In such situations, it may be difficult for the lawyer to give impartial advice or sufficiently advocate for their client.
If a client believes that their lawyer has committed malpractice due to a conflict of interest, they may be able to sue for damages. However, the client will typically need to hire a new lawyer and file a malpractice claim in court, following the necessary legal procedures. The client must prove that the conflict of interest caused their lawyer to act negligently, resulting in a loss for the client. For example, the conflict may have caused the lawyer to negotiate less aggressively, resulting in a lower settlement for the client.
There are several actions by a lawyer that may constitute malpractice, including:
- Mishandling or commingling client funds: According to rules of professional ethics, each client must be given a separate trust account for their funds, which must be kept separate from the lawyer's personal and business accounts. It is illegal for a lawyer to use a client's funds for personal gains.
- Failing to disclose an offer to a client: A lawyer must disclose any offers for a plea deal or settlement to their client before acceptance, unless the client has provided specific prior instructions.
- Failing to file a claim on time: If a lawyer misses the deadline prescribed by a statute of limitations, thus preventing their client from bringing a lawsuit, they may be sued for malpractice. However, the client must prove that they would have recovered damages if the claim had been filed on time.
- Conducting business with a client: While this may not always lead to a malpractice lawsuit, a lawyer should generally refrain from entering into business transactions with their clients.
- Starting a sexual relationship with a client.
- Disclosing details about representation to unentitled third parties.
- Performing legal tasks for a client in a negligent manner.
It is important to note that not all conflicts of interest are intentional, and effective lawyers should have preventative measures in place to identify and address potential conflicts early in the attorney-client relationship. When a conflict does arise, the lawyer may have the option to withdraw from one of the representations or obtain informed consent from both clients to continue, depending on the circumstances and rules of professional conduct in the jurisdiction.
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Breach of fiduciary duty
A conflict of interest arises when a lawyer's interests are placed ahead of their client's interests. This can occur when a lawyer has a personal stake in the outcome of a case or has obligations to another party. For example, a lawyer may have investments in a company that could suffer financially if a client's case is successful, or they may have relatives associated with the opposing party. In such cases, the lawyer's ability to act in the client's best interests is compromised.
Lawyers have a fiduciary duty to their clients, which means they must act in the client's best interests at all times. If a lawyer breaches this fiduciary duty, they can be sued for legal malpractice. This is a serious allegation, as it implies that the lawyer has violated their ethical duty to the client. The client must prove that the lawyer's conflict of interest caused them harm, such as by compromising their case or resulting in financial loss.
To prove a breach of fiduciary duty, several elements must be established. Firstly, the existence of a fiduciary relationship between the lawyer and the client must be demonstrated. This relationship is typically established when the lawyer agrees to represent the client. The lawyer then owes the client a duty of care, which includes acting in the client's best interests, maintaining confidentiality, and avoiding conflicts of interest.
Secondly, it must be shown that the lawyer breached their fiduciary duty. This could include failing to disclose important information, acting in a way that benefits themselves or another party at the client's expense, or neglecting to identify and address conflicts of interest. For example, a lawyer may fail to disclose an offer for a plea deal or settlement, or they may engage in business transactions with a client without proper disclosure.
Thirdly, the client must prove that they suffered harm or loss as a direct result of the lawyer's breach of fiduciary duty. This could include financial losses, missed opportunities for settlement, or damage to the client's case. For example, if a lawyer fails to file a claim within the statute of limitations, the client may lose the opportunity to bring a lawsuit and recover damages.
Finally, the client must establish a causal link between the lawyer's breach of fiduciary duty and the harm they suffered. This may involve demonstrating that the lawyer's actions or inactions directly led to the negative outcome. For instance, if a lawyer fails to disclose a conflict of interest and continues to represent the client, any adverse outcome in the case could be attributed to the lawyer's breach of duty.
It is important to note that the consequences of a conflict of interest can be severe for both the lawyer and the client. Lawyers may face disciplinary proceedings, suspension of their law license, or disqualification from a case. Clients may suffer financial losses, damage to their legal case, or a breach of confidentiality. Therefore, it is crucial for lawyers to implement effective screening procedures to identify and address potential conflicts of interest early on.
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Preventative measures
Implement Systematic Procedures:
Law firms should establish clear and specific protocols for identifying and addressing potential conflicts of interest. This includes utilizing a comprehensive computerized system to check for conflicts, ensuring separate client accounts, and screening lawyers from electronic and paper files of conflicted matters.
Prioritize Client Consent and Disclosure:
Informed consent from clients is crucial. Lawyers must ensure clients understand the conflict, its risks, and alternatives. Both oral and written consent should be obtained, especially when representing multiple clients or when personal interests are involved. Disclose any potential conflicts to clients, such as relationships with opposing counsel, to avoid surprises.
Maintain Loyalty and Independence:
Loyalty to the client is paramount. Lawyers must avoid situations where their personal interests, business transactions, or relationships compromise their independence and professional judgment. This includes refraining from conducting business with clients, claiming false expertise, or ignoring client requests unless illegal or detrimental.
Address Conflicts Promptly:
When a conflict arises, it should be addressed immediately. Lawyers should seek advice from colleagues or outside counsel and consider the potential intensity of the conflict. If necessary, the lawyer should recuse themselves or decline representation to protect the client's interests and the firm's reputation.
Regularly Update and Review Systems:
Law firms should ensure their conflict-checking systems are up-to-date, reflecting new parties, counterclaims, and subpoenas as a case progresses. Lawyers should also be diligent in determining whether a party is friendly or adverse, as this is a critical legal question.
By following these preventative measures, law firms and lawyers can minimize the risk of conflicts of interest, protect their clients' interests, and maintain the integrity of the legal profession.
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Screening procedures
Identify Potential Conflicts:
Law firms should implement a comprehensive conflict-check process to identify potential conflicts early. This includes checking for conflicts with current and former clients, as well as any personal interests or relationships that may impact the lawyer's ability to represent the client effectively.
Informed Consent and Disclosure:
In some cases, informed consent from the client may be sufficient to continue the representation. However, it is important to provide full disclosure of the potential conflict in writing and obtain the client's consent. This consent should be specific and informed, and a general waiver for future conflicts is unlikely to be effective.
Screening Measures:
Adequate screening measures should be implemented to separate the conflicted lawyer from the case. This includes restricting access to both paper and electronic files related to the matter. Screening measures should also extend to the firm's computer systems, ensuring that the conflicted lawyer cannot access case-related information.
Refusal or Withdrawal:
If the conflict is significant, the lawyer or the firm may need to refuse to take on the case or withdraw from the representation. This decision should consider the intensity of the conflict and the potential impact on the lawyer's independence and judgment. In such cases, it is essential to protect client confidentiality and minimize harm to the client.
Seek Legal Guidance:
When facing complex or uncertain conflict-of-interest situations, law firms should seek guidance from legal professionals specializing in ethical practices. This can help ensure that the firm complies with relevant rules and regulations and protect the firm from potential malpractice claims.
Regular Screening Updates:
Conflicts of interest can evolve and change over time. Therefore, it is important to regularly update and review screening procedures. This includes screening new lawyers joining the firm, especially if they have previously worked on cases involving past clients or opposing parties.
By implementing robust screening procedures, law firms can minimize the risk of conflicts of interest and uphold their ethical obligations to their clients. These procedures help maintain the integrity of the legal profession and protect the interests of all parties involved.
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Frequently asked questions
A conflict of interest occurs when a lawyer's representation of a client is directly adverse to another client or there is a significant risk that the representation of one client will be limited by the lawyer's responsibilities to another client, former client, or third party. Conflict of interest can also occur when a lawyer has a personal stake in the outcome of a case.
If you believe your lawyer has a conflict of interest, you should speak to a local lawyer who specializes in such actions for further legal guidance. You will likely need to hire a new lawyer, file a malpractice claim in court, and follow the necessary procedures used in most lawsuits.
Examples of a conflict of interest include:
- Attorneys moving to a new employer and working on cases involving past clients from previous employers.
- Attorneys representing more than one individual involved in a case.
- Lawyers having investments in a company that could be adversely impacted by a client's case.
- Lawyers having relatives associated with the opposing party.
