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Ethics Committee rulings

Every Issue

Cite as: April 2011 85(4) LIJ, p.77

Ethical dilemmas are part of everyday practice for solicitors. The LIV Ethics Committee is available to help.

Criminal Law

Water Prosecution – Conflict of interest (former client)
(R4669 – September)
When assessing whether there has been a breach of Rule 4 of the Professional Conduct & Practice Rules 2005, the following three tests should be considered:
  • whether there is a risk of disclosure of relevant confidential information that is material to the (current) matter and may be used to the former client’s detriment;
  • the duty of loyalty; and
  • the perception that the proper administration of justice is being done.

Firm A acted for a “water corporation” in proceedings against a defendant, whom it was alleged had interfered with and wrongfully taken water from the water corporation. Firm B acted for the defendant.

Firm A has multiple offices throughout country Victoria. In mid-2010, Firm A realised that a conflict check had not been conducted on the client’s file. Upon checking with the other country offices, Firm A realised that one of the offices had previously acted for the defendant on two prior occasions in relation to a property law matter.

Upon discovering that the defendant was a former client, Firm A telephoned Firm B and explained the result of the recent conflict check. Firm A further stated that in its view, there was no conflict as the property law matter was not relevant to the current water prosecution and it did not hold any confidential information that could be used to the defendant’s detriment.

Firm B sought instructions from the defendant and argued that Firm A was in a position of conflict.

Ruling

In the opinion of the Ethics Committee and on the (limited) information presented:

There does not appear to be a conflict of interest in this case.

Family

Conflict of interest
(R4664 – October)
A client’s right to their choice of legal practitioner should not be downplayed. In order to require a practitioner to cease acting in an alleged conflict, there must be a real risk of a conflict of duties arising.

A firm acted for a wife in relation to a family law matter. Another firm acted for the husband. Both husband and wife owned farming properties that were part of several farming properties jointly owned by members of their extended family.

The husband’s firm had previously acted for the husband’s mother in relation to several unrelated commercial matters. The husband’s firm had never acted for the wife, nor had she received any legal advice from them.

The wife was concerned that, given the complex nature of the family arrangements (farming properties), the husband was using alternative means to move assets out of her reach. The wife claimed that the total sum of the assets was significantly higher than what the husband claimed, however they had not yet agreed on an asset pool.

The mother was not yet joined to the current family law proceedings, but it was anticipated by the wife’s firm that they would be joining her to the proceedings. The reason for the joinder was that one of the farms had been transferred out of the “matrimonial assets” into the list of “non-matrimonial” assets (now controlled by the mother).

The wife’s firm alleged that the husband’s firm should cease acting for the husband as they had previously acted for the mother. Additionally, the wife’s firm alleged that the husband’s firm would be in a position of conflict if they joined the mother to the currently family law proceedings, given that the husband’s interests in the assets were different to that of his mother.

Ruling

In the opinion of the Ethics Committee and on the information presented:

As the mother is not a party to the family law matter, it is not apparent that a conflict of interest presently exists.

Should the mother be joined to the family law matter and provided her interests and the husband’s interests remain aligned, then the husband’s firm may continue to act for both clients.

However, the husband’s firm should cease to act if the mother is joined and either:

  • the husband’s interests diverge from the mother’s interests (such that a conflict of duties between concurrent clients arises); or
  • one of the practitioners from the husband’s firm is called to give evidence in the proceedings and anticipates a breach of Rule 13.4 of the Professional Conduct & Practice Rules 2005.

The ETHICS COMMITTEE is drawn from experienced past and present LIV Council members, who serve in an honorary capacity. Ethics Committee rulings are non-binding. However, as the considered view of a respected group of experienced practitioners, the rulings carry substantial weight. It is considered prudent to follow them. The LIV Ethics website, www.liv.asn.au/Practising-in-Victoria/Ethics, is regularly updated and, among other services, offers a searchable database of the rulings, a “common ethical dilemmas” section and information about the Ethics Committee and Ethics Liaison Group. For further information, contact the ethics solicitor on 9607 9336.

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