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Ethics Committee rulings

Every Issue

Cite as: December 2011 85(12) LIJ, p.71

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

Wills & estates

Conflict of interest
(R4708 – June 2011)

A firm must cease acting against a former client when the firm is in possession of confidential information which is relevant and material to the current matter and could be used to the detriment of the former client.

Firm A acted for the wife and son in relation to a possible Part IV claim on the estate of the deceased husband. Firm B acted for the estate and the principal of Firm B was also the executor.

Nineteen years ago, Firm A acted for the deceased in relation to a company he controlled that was fending off an attempt by a bank as mortgagee to recover possession of its commercial premises. Firm A also acted for the deceased in relation to some domestic conveyancing matters at around the same time and had not acted for him since that time. Firm A advised that it no longer held any of the files for the previous retainers outlined above.

Firm B was of the opinion that a possible conflict of interest may become evident in the course of examining the deceased’s historical personal and business records and that Firm A should cease acting.

Ruling

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

In the absence of any confidential information being acquired from the deceased in the 1990s that might be relevant to the current matter, there is no apparent justification for Firm A to cease acting for the wife and her son in any Part IV application brought by them against the estate of the deceased.

Wills & estates

Conflict of interest – confidentiality
(R4712 – July 2011)

It is the duty of the deceased’s executor/executrix to seek to uphold the will of the deceased in a Part IV application.

A firm was instructed to act for an applicant in a Part IV application against the estate of his late de facto partner. The deceased’s will appointed her aunt as sole executrix and left the whole of her estate to her mother. No provision for the applicant was made in the deceased’s will.

In 2010 the firm had acted for the deceased’s mother in the preparation of her will. In the course of that retainer the firm became aware of confidential information regarding the mother’s interests.

The firm was concerned that it might be in a possible breach of confidence and conflict of interest situation if it acted for the applicant in a Part IV application in that any provision made for the applicant from the estate would diminish the financial interest of its former client. On the other hand, it was noted that it is the duty of the executor and not the former client to attempt to uphold the will of the deceased.

Another firm acted for the estate of the deceased and did not believe there was any problem with the other firm acting for the applicant.

Ruling

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

There is no ethical objection to the firm acting for the applicant in a Part IV application against the estate of the deceased.



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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