Conflicts of Interest: Recognition, Avoidance, Resolution

In this podcast, Ben Hubble QC and Charles Phipps discuss solicitors’ conflicts of interest – how to recognise them, how to avoid them and how to resolve them.

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This topic brings into focus two competing tensions; the first is the tension between the professional and ethical obligations of a solicitor on the one hand as opposed to the commercial factors that can be brought to bear, particularly under the partnership model. The second tension is between solicitors’ regulatory obligations and what can be seen as practical good sense because the law of conflicts is an area where doing the right thing can in fact lead you to the wrong place.

As law firms become larger and are forced to be more cost effective per retainer, the need for work grows. Combine this need with (i) increasingly sophisticated and challenging clients and (ii) ever more intense regulation, and the scene is set for problems relating to conflicts of interest.

In this podcast, we aim

  • to summarise the principles applicable to conflicts of interest and
  • to identify what can and cannot be done to manage the risks of and arising from conflicts of interest.

The law in this area is far from settled and the existence of conflicts and how they are best dealt with is very fact sensitive. Accordingly, what follows is not intended to be definitive or a panacea. But we hope it will serve as a helpful guide through what can seem rather a maze of law and regulation.

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Show notes

Ben and Charles discuss solicitors’ conflicts of interest – how to recognise them, how to avoid them and how to resolve them.

This topic brings into focus two kinds of tension. The first is the tension between the professional and ethical obligations of a solicitor, on the one hand, and, on the other, the commercial factors that can be brought to bear, particularly under the partnership model. The second tension is between solicitors’ regulatory obligations and what can be seen as practical good sense – because the law of conflicts is an area where doing what seems to be the right thing can in fact lead you to the wrong place.

As law firms become larger and the pressure for cost-effectiveness increases, the need for work grows. Combine this need with (i) increasingly sophisticated and challenging clients and (ii) ever more intense regulation, and the scene is set for problems relating to conflicts of interest.

In this podcast, Ben and Charles aim:

  • to summarise the principles applicable to conflicts of interest and
  • to identify what can and cannot be done to manage the risks of and arising from conflicts of interest.

The law in this area is far from settled and the existence of conflicts and how they are best dealt with is very fact-sensitive. Accordingly, the podcast is not intended to be definitive or a panacea. Nor is it legal advice. But it may serve as a helpful guide through what can seem rather a maze of law and regulation.

Charles revisits the definitions provided by Millett LJ in Bristol & West Building Society v Mothew, drawing out some of the essential distinctions between duty-interest conflicts and duty-duty conflicts, between existing clients and former clients, between conflicts of interest and conflicts of duty, and between potential conflicts and actual conflicts. He considers the nature of the relationship between two retainers which may give rise to a client conflict (Marks & Spencer v Freshfields), before discussing two possible approaches to addressing conflicts – contractual restriction of the retainer and informed consent. He also touches briefly on the duty of good faith and the no inhibition principle.

Ben analyses the definitions of client conflicts and own interest conflicts which appear in the SRA’s Code of Conduct 2011, identifying the problematic nature of those definitions and examining the equivalent provisions in the SRA’s new draft Code of Conduct 2019. He then turns to the practical problems faced by solicitors (e.g. the difficulties posed by such cases as Hilton v Barker Booth & Eastwood and Georgian American Alloys v White & Case) and looks at the practicalities of conflicts-handling for solicitors, providing lists of some recommended “dos and “don’ts”.

Charles then ends with SRA v Howell-Jones as a cautionary tale for solicitors who continue to act after the adequacy of their services has been called into question.

Speakers

Ben Hubble QC

Charles Phipps

Related Expertise

Disciplinary & Regulatory

Links

Disciplinary & Regulatory