Conflicts of Interest: What process & policies do you have in place?

Legal Practice Directors of incorporated legal practices must ensure they have appropriate management systems in place, but QLS Ethics and Practice Centre recommends all practices (whether ILP, sole trader or partnership) have appropriate management systems in place. 1

There are 10 areas identified in which appropriate management systems should be implemented to comply with the Legal Profession Act 2007 (Qld). Providing for the timely identification and resolution of conflicts of interests is one of the 10 areas.

Conflicts of interest can arise between current clients, former clients and between your own interests and the client.

When we think of conflicts of interests, we often think about conflicts that may arise if acting for both parties to a transaction (i.e. buyer/seller, landlord/tenant). Still, current client conflicts can arise where you have multiple clients2 – does your client agreement protect you?

On the question of conflicts arising with former clients, in a 2018 NSW Supreme Court decision the Court restrained a solicitor from acting against a former client in circumstances where the solicitor had knowledge of the plaintiff’s character and tendencies, that is that he had obtained information about how they thought, acted and conducted themselves generally and in the context of litigation – this information was considered to be confidential information.3

This month, we are highlighting resources to help you ensure you have appropriate management systems in your office in respect of identifying and resolving conflicts of interest. Keep a lookout on our QLS Solicitor Support LinkedIn Group, Facebook and Instagram for further posts.

We will look at:

  • What is a conflict of interest?
  • What steps are involved in identifying a conflict of interest?
  • What should you do if a conflict of interest arises?
  • Have you made disclosure and obtained informed consent if proposing to act for multiple parties?
  • Does your client agreement protect you where you are acting for multiple parties?
  • Taking instructions from one spouse in a joint retainer situation.
  • What does “fully informed consent” entail?
  • Can I accept a gift from a client or referrer?
  • In conflict matters is the best avoidance strategy – ‘when in doubt, don’t?’

Importantly, are all of your staff trained on your office’s conflict identification and resolution procedures? What systems do you have in place?

The Practice Advisory Service is a complimentary service for sole / micro-practices across Queensland. For further information or to book a practice visit contact QLS Ethics and Practice Centre on 07 3842 5843 or email ethics@qls.com.au.


Footnotes:
1 Legal Profession Act 2007 (Qld), s117(3).
2 R v Pham [2017] QCA 43, Legal Profession Complaints Committee and Staffa [2020] WASAT 58.
3 Gordana v Steingold [2018] NSWSC 1390.

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