Legal Profession (Professional Conduct) Rules 2015

Conflict, or potential conflict, between interests of 2 or more clients

20.—(1) The following principles guide the interpretation of this rule.

Principles

(a)

A legal practitioner owes duties of loyalty and confidentiality to each client of the legal practitioner, and must act prudently to avoid any compromise of the lawyer-client relationship between the legal practitioner and the client by reason of a conflict, or potential conflict, between the interests of 2 or more clients of the legal practitioner.

(b)

A law practice owes duties of loyalty and confidentiality to each client of the law practice, and must act prudently to avoid any compromise of the lawyer-client relationship between the law practice and the client by reason of a conflict, or potential conflict, between the interests of 2 or more clients of the law practice.

(2) Paragraphs (3), (4) and (7) apply where —

(a)	a legal practitioner or law practice intends to act for 2 or more different parties (each called in those paragraphs a relevant party) to a matter or transaction; and
(b)	a diversity of interests exists, or may reasonably be expected to exist, between those parties.

(3) Before accepting any instructions from any relevant party in relation to the matter or transaction, the legal practitioner or law practice —

(a)

must communicate directly with each relevant party —

(i)

to explain to that relevant party —

(A)	how the interests of all or any of the relevant parties diverge or may diverge;
(B)	how the legal practitioner or law practice may be prevented from disclosing to a relevant party information obtained from another relevant party, despite the relevance of the information to the matter or transaction; and
(C)	how the legal practitioner or law practice may be prevented from giving to a relevant party any advice that is prejudicial to another relevant party;

(ii)

to inform that relevant party that the legal practitioner or law practice must cease to act in the matter or transaction if, in the course of the retainer, the legal practitioner or law practice has difficulty in advising on and dealing with the relevant parties’ divergent interests competently, evenly and consistently;

(iii)

to receive and deal with any queries which that relevant party may have on the matter or transaction, or on the risks of all or any of the relevant parties being jointly represented in the matter or transaction by the legal practitioner or law practice; and

(iv)

to ascertain precisely the intentions of that relevant party;

(b)

in the case of a transaction that is ostensibly or potentially disadvantageous to a particular relevant party, must also communicate directly with the relevant party —

(i)	to explain the relevant party’s position before the transaction, and how the relevant party’s position will or may be altered to the relevant party’s detriment by the transaction;
(ii)	to verify whether any instructions purportedly given on behalf of the relevant party do in fact reflect the relevant party’s intentions; and
(iii)	to remove any doubt as to whether the relevant party may have been misled by, or may be acting under the undue influence of, another person;

(c)

must advise each relevant party to obtain independent legal advice;

(d)

if a particular relevant party does not obtain independent legal advice, must obtain a written confirmation from the relevant party, or maintain a written record, that the relevant party declines to do so; and

(e)

must obtain each relevant party’s informed consent in writing to the legal practitioner or law practice acting for all relevant parties, despite the relevant parties’ divergent interests.

(4) The legal practitioner or law practice —

(a)

must throughout the course of the retainer for the matter or transaction —

(i)	continue to be vigilant of any conflict or potential conflict between the interests of any of the relevant parties; and
(ii)	inform each relevant party of any conflict or potential conflict that arises or may arise between the interests of any of the relevant parties; and

(b)

must cease to act in the matter or transaction if, in the course of the retainer, the legal practitioner or law practice has difficulty in advising on and dealing with the relevant parties’ divergent interests competently, evenly and consistently.

(5) Paragraphs (6) and (7) apply where —

(a)	a legal practitioner or law practice acts for 2 or more different parties (each called in those paragraphs a relevant party) to a matter or transaction; and
(b)	a diversity of interests arises between those parties during the course of the retainer for the matter or transaction.

(6) The legal practitioner or law practice —

(a)

must, throughout the remainder of the course of the retainer for the matter or transaction —

(i)	continue to be vigilant of any conflict or potential conflict between the interests of any of the relevant parties; and
(ii)	inform each relevant party of any conflict or potential conflict that arises or may arise between the interests of any of the relevant parties; and

(b)

(7) Despite paragraphs (4)(b) and (6)(b), the legal practitioner or law practice may continue to act for a relevant party in the matter or transaction, if —

(a)	the legal practitioner or law practice ceases to act for all other relevant parties whose interests diverge from the interests of that relevant party; and
(b)	all of those other relevant parties give their informed consent in writing for the legal practitioner or law practice to continue to act in the matter or transaction.

(8) Where a legal practitioner or law practice has prepared a document on behalf of 2 or more parties concerning their rights and obligations, and 2 or more of those parties become involved in a dispute arising from the document, the legal practitioner or law practice must not represent any disputing party in the dispute.

Conflict, or potential conflict, between interests of current client and former client

21.—(1) The following principles guide the interpretation of this rule.

Principles

(a)	The duties of loyalty and confidentiality owed by a legal practitioner to his or her client continue after the termination of the retainer.

(b)	The duties of loyalty and confidentiality owed by a law practice to its client continue after the termination of the retainer.

(2) Subject to paragraphs (3), (4) and (5), a legal practitioner or law practice must decline to represent, or must withdraw from representing, a client (called in this rule the current client) in a matter, if —

(a)	the legal practitioner or the law practice holds confidential information relating to a former client (called in this rule the former client) that is protected by rule 6;
(b)	the current client has an interest that is, or may reasonably be expected to be, adverse to an interest of the former client; and
(c)	that information may reasonably be expected to be material to the representation of the current client in that matter.

(3) Paragraph (2) does not prevent a legal practitioner or law practice from acting, or continuing to act, for the current client, subject to any conditions agreed between the legal practitioner or law practice and the former client, if —

(a)	the legal practitioner or law practice has adequately advised the former client to obtain independent legal advice; and
(b)	the former client gives the former client’s informed consent in writing to the legal practitioner or law practice acting, or continuing to act, for the current client.

(4) Where the requirements in paragraph (3)(a) and (b) are not met despite reasonable efforts by the legal practitioner or law practice to meet those requirements, paragraph (2) does not prevent the legal practitioner or law practice from acting, or continuing to act, for the current client, if —

(a)

there are adequate safeguards in place to protect the former client’s confidential information; and

(b)

the legal practitioner or law practice has made reasonable efforts to notify the former client —

(i)	of those safeguards; and
(ii)	that the legal practitioner or law practice will act, or continue to act, for the current client.

(5) Where it would be illegal for the legal practitioner or law practice to meet the requirements in paragraphs (3)(a) and (4)(b), paragraph (2) does not prevent the legal practitioner or law practice from acting, or continuing to act, for the current client, if —

(a)	there are adequate safeguards in place to protect the former client’s confidential information; and
(b)	the legal practitioner or law practice ensures that the former client’s confidential information is not accessed, used or disclosed without the former client’s consent in writing.

Conflict, or potential conflict, between interests of client and interests of legal practitioner or law practice, in general

22.—(1) The following principles guide the interpretation of this rule and rules 23, 24 and 25.

Principles

(a)

A legal practitioner owes duties of loyalty and confidentiality to a client of the legal practitioner, and must act prudently to avoid any compromise of the lawyer-client relationship between the legal practitioner and the client by reason of a conflict, or potential conflict, between the interests of the client and the interests of the legal practitioner.

(b)

A law practice owes duties of loyalty and confidentiality to a client of the law practice, and must act prudently to avoid any compromise of the lawyer-client relationship between the law practice and the client by reason of a conflict, or potential conflict, between the interests of the client and the interests of the law practice.

(2) Except as otherwise permitted by this rule, a legal practitioner or law practice must not act for a client, if there is, or may reasonably be expected to be, a conflict between —

(a)	the duty to serve the best interests of the client; and
(b)	the interests of the legal practitioner or law practice.

(3) Where a legal practitioner, any immediate family member of the legal practitioner, or the law practice in which the legal practitioner practises has an interest in any matter entrusted to the legal practitioner by a client of the legal practitioner —

(a)

in any case where the interest is adverse to the client’s interests, the legal practitioner must withdraw from representing the client, unless —

(i)	the legal practitioner makes a full and frank disclosure of the adverse interest to the client;
(ii)	the legal practitioner advises the client to obtain independent legal advice;
(iii)	if the client does not obtain independent legal advice, the legal practitioner ensures that the client is not under an impression that the legal practitioner is protecting the client’s interests; and
(iv)	despite sub-paragraphs (i) and (ii), the client gives the client’s informed consent in writing to the legal practitioner acting, or continuing to act, on the client’s behalf; or

(b)

in any other case, the legal practitioner must withdraw from representing the client, unless —

(i)	the legal practitioner makes a full and frank disclosure of the interest to the client; and
(ii)	despite sub-paragraph (i), the client gives the client’s informed consent in writing to the legal practitioner acting, or continuing to act, on the client’s behalf.

(4) Where a law practice has an interest in any matter entrusted to it by its client —

(a)

in any case where the interest is adverse to the client’s interests, the law practice must withdraw from representing the client, unless —

(i)	the law practice makes a full and frank disclosure of the adverse interest to the client;
(ii)	the law practice advises the client to obtain independent legal advice;
(iii)	if the client does not obtain independent legal advice, the law practice ensures that the client is not under an impression that the law practice is protecting the client’s interests; and
(iv)	despite sub-paragraphs (i) and (ii), the client gives the client’s informed consent in writing to the law practice acting, or continuing to act, on the client’s behalf; or

(b)

in any other case, the law practice must withdraw from representing the client, unless —

(i)	the law practice makes a full and frank disclosure of the interest to the client; and
(ii)	despite sub-paragraph (i), the client gives the client’s informed consent in writing to the law practice acting, or continuing to act, on the client’s behalf.

Search within Legislation