Conflicts of Interest and the Proper Handling of Client Information
Conflict categories
There are three main conflict types: (1) conflict between the client's interests and the solicitor's own interests (personal interest conflict); (2) conflict between two current clients (concurrent conflict); and (3) conflict between a former client and a new client (successive conflict). Each is governed by the same core principle: a solicitor must not act where a conflict exists or is a real possibility, unless the conflict is fully disclosed and all affected clients give informed consent, and the solicitor is satisfied that no confidential information will be used against a former client.
Information barriers
Where a firm acts against a former client of the firm, an information barrier (screen) may be used, but only in limited circumstances and generally with the informed consent of the former client. The test is whether a reasonable observer, aware of the facts, would perceive a real risk that confidential information could be used to the former client's detriment. Mere assertion that a screen exists is often insufficient.
Handling client information
Solicitors must protect client information from unauthorised access, use secure systems, avoid discussing matters in public, and ensure that staff and contractors are bound by confidentiality. Personal information must be handled consistently with applicable privacy law.
Traps
- The "different teams" trap: questions suggest that separate teams cure a conflict. Screens help but do not automatically cure a conflict, especially where the same firm holds the information.
- The "former client" trap: the duty to a former client is not extinguished by the end of the retainer.
- The "informed consent" trap: consent must be given with full knowledge of the conflict, not merely a general waiver.
Rule of thumb
If you would be uncomfortable explaining the arrangement to the former client in open court, the conflict is not cured.