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Ethics Committee rulings: Conflicts of interest

Every Issue

Cite as: July 2015 89 (7) LIJ, p.71

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

Property law
R4852: October 2014 — Conflict of interest
It would be prudent if a solicitor acting for a vendor in a conveyancing transaction declined to accept a retainer from a purchaser’s financier’s settlement agent to attend settlement on its behalf.

The company was a settlement agent engaged in conveyancing transactions in Victoria. It was common practice for mortgagee banks to engage the company to attend settlement of conveyancing transactions on their behalf to pay over money and receive security documents in return. In country towns it was the business practice of the company to appoint one solicitor in the town to act as its agent in attending such settlements. From time to time, the solicitor appointed to act as agent for the company would also be acting for the vendor in the conveyancing transaction. The question arose as to whether the vendor’s solicitor would be put in a position of a conflict of interest by acting both for the vendor and the purchaser’s financier in that transaction.

Ruling

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

Given the potential for a conflict of interest to arise, it would be prudent if a solicitor acting for a vendor in a conveyancing transaction declined to accept a retainer from a purchaser’s financier’s settlement agent to attend settlement on its behalf.

Compensation
R4869: March 2015 — VOCAT, Conflict of interest
It would be prudent for a law practice to establish a policy to decline to act for victims of crime in Victims of Crime Assistance Tribunal (VOCAT) matters if that law practice has ever previously acted for the alleged offenders.

A law practice was in the process of expanding its practice to assist clients in making applications for compensation to the VOCAT. In many instances the law practice may have acted for the alleged offender in criminal law proceedings in respect of which the VOCAT application would be made or in other unrelated proceedings or matters, for example drink driving. As a general rule, VOCAT is not required to give any notification to the alleged offender about an application for assistance made by a victim and the alleged offender will not play any part in the VOCAT application. In some instances, the alleged offender may become involved in the VOCAT proceedings. The law practice wanted to ensure that in such matters it did not breach the ethical duties which it owed to former clients.

Ruling

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

The law practice should not act for a victim of crime in a VOCAT application where it has previously acted for the alleged offender.


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.

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