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Ethics Committee Rulings: Conflicts of interest

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Cite as: April 2015 89 (4) LIJ, p.72

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

Wills and estates

Rules 8 and 13.4
(R4842 – June 2014)
Where a firm has accepted instructions to act for more than one of the joint parties in a matter, it may have to cease acting for all parties if one party engages alternative representation. Where it becomes apparent that a practitioner may be required to give evidence material to the determination of contested issues in a matter, the practitioner should cease to act.

Firm A obtained instructions in a deceased estate to act for all three executors, being the widower and two adult children. The first child’s instructions to Firm A were limited to initially obtaining probate, and were conditional on the matter not becoming contentious. It appears, however, that the matter was contentious from the outset as there was disagreement between the first child on the one part, and the widower and second child on the other, about what assets comprised the estate. Firm B then represented the first child and contended that Firm A was conflicted and should cease to act for all parties. The principal of Firm B was the first child’s domestic partner and was privy to a conversation, the subject matter of which might be relevant to a possibly contentious issue. Firm A wished to continue to represent the widower and the second child.

Ruling

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

Firm A should cease acting for the widower and the second child;

Firm B should cease to act for the first child if it becomes apparent that the principal of Firm B will be required to give evidence material to the determination of contested issues before the court.

Conflict of interest

Rule 13.4
(R4844 – July 2014)
A practitioner with the carriage of a matter who moves to another firm as a principal and is followed by a client, may not be permitted to act for that client in proceedings brought by the first firm against the client, and the second firm may have to cease acting.

Firm A, acting for itself, issued summonses for review of costs by a law practice against X in the Supreme Court of Victoria (the X proceeding) and Y in the same court (the Y proceeding) in respect of unpaid fees allegedly owed to it.

Concerning the matters forming the basis of the X proceeding and the Y proceeding, there were three employee solicitors who had previously had carriage of the matters, namely S1, S2 and S3. S2, supervised by S1, had had the day to day carriage of the matters forming the basis of Firm A’s claim in the X proceeding and the Y proceeding.

Firm B acted for X in the X proceeding, and Y in the Y proceeding. S2 subsequently became a principal at Firm B.

Firm A objected to Firm B acting for X and Y, stating, among other things, that S2 had intimate knowledge of the subject matter of both proceedings. Moreover, Firm A asserted that, if objections were taken to Firm A’s claims, S2 would be a material witness in the taxation, in which case Firm B would be faced “with a serious and hopeless conflict of interest and ought to withdraw immediately”.

Ruling

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

A properly informed reasonable observer would regard it as contrary to the administration of justice for a lawyer previously employed by Firm A to now be acting on behalf of alleged former clients of Firm A in subsequent costs proceedings when the employee lawyer had had the day to day carriage of the corresponding original matter when employed by Firm A. In those circumstances, Firm B should cease acting in the costs proceedings brought by Firm A.

In the light of this ruling, and based on the information provided, the Ethics Committee does not propose to comment on the issue of whether or not the employee lawyer is likely to be called as a witness in the proceedings.


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/For-Lawyers/Ethics.aspx 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. Back To Issue

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