Ethics FAQs - Conflicts

This will depend on two issues. Firstly, the nature of the gift and secondly, whether you continue to represent the client. If your retainer has ended then a small gift given in gratitude by the client is acceptable. The gift should be modest, it should not be money or a voucher, nor should the gift be such that it would bring your independence into question. Any gift that is not modest, or is of great value, or is disproportionate to the work that has been done should be returned to the client with a note of thanks and a short explanation that you couldn’t accept such a gift. You should remember that it is always important to preserve your independence.

QLS Council was the first Law Society in Australia to release a formal Guideline on Collaborative Law. Released in January 2008 the Guideline reads:

"Where a solicitor agrees to act for a client utilising a ‘collaborative law’ arrangement the following Guideline, endorsed by the Queensland Law Society Council (“Council”) on 31 January 2008, should be observed:

Council recognises the growing interest and acceptance in Australia of Collaborative Law as a method of alternative dispute resolution. As the participation agreement and collaborative law contract results in limitations to the retainer usually entered into by practitioner and client, and as these limitations may potentially conflict with the best interests of clients, Council is of the view that a competent and diligent solicitor should take the following steps prior to entering into the Collaborative Law process:

• Ensure clients are fully informed of:

• the limitations placed on the advocacy and advice provided by the practitioner when entering into a participation agreement or similar contract as part of a Collaborative Law process. It should be clearly stated to the client that such limitations will prevent the practitioner from acting on behalf of the client should the collaborative process fail and it is in the client’s best interest to litigate.
• the possible additional cost to the client should the process not result in a mutually agreed settlement and the practitioner is required to withdraw from the retainer in compliance with the collaborative law contract.
• alternative methods of non-court dispute resolution, including mediation.

• Obtain written consent: Practitioners should prepare and have their client sign a written agreement in which the client:

• acknowledges they have been fully informed of the issues outlined above, and 
• gives their consent to their, and their solicitor’s participation in the collaborative law dispute resolution process."

Clearly there are ongoing obligations to maintain the confidences of former clients  and any cross-examination in violation of this obligation is prohibited. But what if the cross-examination dealt only with matters on the public record, such as the criminal record of the former client?

The Western Australian case of Fordham v Legal Practitioners Complaints Committee (1997) WAR 467 involved a barrister in just such a situation.  The practitioner in this case was found guilty of unsatisfactory professional conduct for cross-examining a recently former client even though the court conceded that confidentiality had not been breached. Exacerbating the issue, however, was the fact that the cross-examination involved facts common to her own retainer with that client. The court found that:

• her actions amounted to a breach of loyalty to her client irrespective of any breach of confidentiality;
 

• her actions could have led a reasonable observer to conclude that she had indeed used confidential information to the detriment of her former client.
 

• she had breached a duty not to adopt a position hostile to a former client in the same or a related matter.

We can possibly dismiss the first of these as the idea of loyalty beyond the retainer appears to have gone the way of the fob watch and waistcoat (with the possible exception of Victoria).  The other two reasons, however, display the court’s jealousy to preserve public confidence in the law and the legal profession. I believe these last two reasons would continue to be influential in a similar situation today.

Does this amount to a prohibition on acting? No, but you must keep in mind how a reasonable observer would consider such a move. There are some factors you should consider before proceeding:

• Confidentiality: Clearly there is a prohibition on using confidential or privileged information gained during the retainer against your former client.

• “Getting-to-know-you” factors: Not all confidential information is found in your files. In criminal and family matters in particular, the court considers the impressions you gained about the person – their character, habits, strengths, weaknesses, attitudes – as also being “information” gained during the retainer, and places restrictions on its use due to concerns over its prejudicial effect. 

• Relevance to the current matter: Clearly if you are representing a client in a matter arising from the same set of facts for which you represented the former client, then cross-examining the former client becomes problematic. The challenges of navigating a course through your duties to your current client and your duties of confidentiality to your former client would likely place you in an irretrievable conflict of duties. Learn from Fordham and steer clear.

• Proximity to the current matter: Obviously this is related to the point above but focuses on the period of time since you represented the former client. Someone you represented 10 years ago in an unrelated matter is less likely to raise ethical barriers to cross-examination than someone you represented a short time ago.

• Strength of the relationship with the former client: If you were this person’s lawyer over an extended period, your former client may well regard you as “their lawyer” far more than someone you represented fleetingly as a duty lawyer. In such a situation you would also have built up a sizeable bank of ‘impressions’ that may preclude you from cross-examining a former client even if the matters are unrelated.

There are so many variables that a 'one size fits all' answer is not possible. As always, your informed discretion based on the facts of each case will decide what is appropriate. It appears to my mind that a continuum exists with proximity to the original representation(s), relevance to the present matter and strength of lawyer-client relationship weighing heavily against the appropriateness of cross-examining a former client. At the other end of the scale is a former client whose remoteness in time, relationship and relevance to the current matter would be less likely to offend our ‘reasonable observer’.
 

(Reproduced from N. Watt, "Former Client in the Cross-hairs" 'That Ethics Guy' column Proctor May 2010 (See 'materials' below)

('Information barrier' is the current preferred term for what have been known as 'Chinese Walls').

In 2005/06 the Law Society of New South Wales and the Law Institute of Victoria jointly developed Information Barrier Guidelines. In 2006 both bodies adopted these guidelines for use by their members.

More recently the Queensland Law Society Council has approved these guidelines for use by its members.

The Victorians have provided a useful 2 page précis of the full version of the Guidelines.

For Queensland solicitors the relevant conduct rules are the Solicitors Rule 2007 sections 3 'Confidentiality' and 4 'Acting against a former client'. The guidelines need to be read in conjunction with these rules and the law relating to confidentiality.

The guidelines are for law practices which need to quarantine information to avoid a breach of confidentiality in cases where the law practice wishes to act in a matter where it has information relevant to the matter but which is confidential to a former client. The guidelines aim to assist law practices with measures to guard against a breach of the duty of confidentiality owed to the former client. In the absence of an effective information barrier the law practice would normally not be able to act due to the conflict of interest. The conflict is between the duty of confidentiality to the former client and the duty to the current client to disclose and or use all information at the law practice’s disposal for the benefit of the current client’s matter. The law practice should be able to act where it can establish that there is no unacceptable risk of breach of confidentiality. This may be possible by compliance with the guidelines. The burden of establishing that there is no unacceptable risk will fall on the law practice.

The guidelines may also be used to address similar issues created by ‘migratory lawyers’, that is lawyers moving between law practices who have had some involvement with a relevant matter at their previous practice.

The guidelines may also be used to rebut the presumption of imputed knowledge, that all solicitors in a law practice are presumed to have the knowledge of all other solicitors in the practice.

The guidelines state that they are not intended to apply to 'concurrent retainers' where a law practice acts concurrently for two or more clients with conflicting interests, as different considerations apply. A barrier is not, of itself, a solution to a situation where there is a conflict between current clients. It does not remove the duty of undivided loyalty owed to each current client. However, in such situations a law practice may be able to act with the fully informed consent of each client. Consent may be obtained on the basis that confidentiality is to be preserved by an effective information barrier. Alternatively, there would need to be waivers of confidentiality, but these may not be appropriate or forthcoming. See the Solicitors Rule s.8 'Acting for more than one party' and the article by Ross Perrett (see below) at pp 46-48. (Note that the article refers to the Solicitors Handbook and other Queensland rules which have since been replaced by the Solicitors Rule 2007).

The guidelines assist practitioners in assessing whether an information barrier can be used effectively and give guidance on what measures the courts have found to be effective.

In summary, the guideline measures are:

•established, documented protocols for maintaining information barriers
•a compliance officer to oversee the process
•the current client’s consent to non-disclosure of the former client’s confidential information
•identification of all ‘screened persons’(the persons in possession of the confidential information which is to be protected by the arrangements)
•undertakings that there will be no contact between the screened persons and those acting in the current matter
•securing of all confidential information, paper or electronic
•sanctions for any breach of the arrangements
•an ongoing education program about information barriers for all staff.

The first of these measures refers to established protocols. A barrier established ad hoc to meet a particular problem rather than one which is built on established institutional arrangements is unlikely to be seen as effective by the courts. The procedures and practices underpinning information barriers must be part of the culture and organisational structure of the law practice.

An effective barrier must prevent not only deliberate disclosure of confidential information but also accidental or inadvertent dissemination, and as illustrated in Asia Pacific Telecommunications Limited v Optus Networks Pty Limited [2007] NSWSC 350, even any inadvertent involvement in a matter by a ‘screened person’.

Whilst acknowledging that they are intended for all law practices, the guidelines state, in “Common Questions”, that it may be extremely difficult for small practices to demonstrate compliance with the guidelines as a question of fact, particularly the requirements to keep staff and files physically separate. In fact, it has been said in one case that it will be 'almost impossible' for a small firm to construct an effective information barrier (see Ross Perrett's article (below) p.53). Almost all of the reported cases have involved large firms.

Whether an information barrier will be effective depends on the facts of each case and ultimately is a question for the court. The guidelines have not been endorsed by the courts, but they do refer extensively to, and are based upon, relevant case law.

The guidelines refer to solicitors having a 'duty of loyalty' to former clients in Victoria. In his article (see below) Ross Perrett deals with this question (at p.49) and concludes, on the basis of the decision in Flanagan v Pioneer Building Society Ltd [2002] QSC 346, that there is unlikely to be such a duty in Queensland.

Please note that the Queensland Law Society, the New South Wales Law Society and the Law Institute of Victoria are currently (July 2009) reviewing these guidelines, in particular in relation to the decision in APT v Optus (see above). Accordingly, for the time being practitioners should take note of that decision, and may also read an article which looks at that case Sshhh! The (Chinese) walls have ears.. by Neil Watt in Proctor June 2007 pp.41-42.

The article by Ross Perrett of Clayton Utz, Chinese Walls appeared in The Verdict Vol 2 2007 pp.46-56. This was published in March 2007 and so predates both the APT v Optus case and the current Solicitors Rule 2007.