conflict of interest
posted on
Feb 24, 2010 12:32AM
Conflicts of Interests cases involving lawyer which laypersons may claim show a lawyer "switching sides" are sometimes difficult because the lawyers do not see a conflict and laypersons do. These cases involve the "delicate and sometimes difficult task of balancing competing interests: the individual right to be represented by counsel of one's choice, each party's right to be free from the risk of even inadvertent disclosure of confidential information, and the public's interest in the scrupulous administration of justice." Brown v. Eighth Judicial Dist. Court, 14 P.3d 1266, 1269-70 (Nev. 2000).
[ΒΆ12] "Loyalty is an essential element in the lawyer's relationship to a client." Comment, Model Rule Conduct 1.7. "The duty of confidentiality continues after the client-lawyer relationship has terminated." Comment, Model Rule Conduct 1.6. "An integral purpose of the rule of confidentiality is to encourage clients to fully and freely disclose to their attorneys all facts pertinent to their cause with absolute assurance that such information will not be used to their disadvantage." Damron v. Herzog, 67 F.3d 211, 215 (9th Cir. 1995). "'Clients must feel free to share confidences with their lawyers. This will not occur if we permit lawyers to be today's confidants and tomorrow's adversaries.'" Clinard v. Blackwood, 46 S.W.3d 177, 188 (Tenn. 2001) (quoting Penn Mut. Life Ins. Co. v. Cleveland Mall Assocs., 841 F. Supp. 815, 818 (E.D. Tenn. 1993)). As the court said in Analytica, Inc. v. NPD Research, Inc., 708 F.2d 1263, 1266-67 (7th Cir. 1983) (citations omitted):
"For rather obvious reasons a lawyer is prohibited from using confidential information that he has obtained from a client against that client on behalf of another one. But this prohibition has not seemed enough by itself to make clients feel secure about reposing confidences in lawyers, so a further prohibition has evolved: a lawyer may not represent an adversary of his former client if the subject matter of the two representations is "substantially related," which means: if the lawyer could have obtained confidential information in the first representation that would have been relevant in the second. It is irrelevant whether he actually obtained such information and used it against his former client, or whether--if the lawyer is a firm rather than an individual practitioner--different people in the firm handled the two matters and scrupulously avoided discussing them."
Model Rule Prof. Conduct 1.9 provides a lawyer who has formerly represented a client in a matter shall not thereafter:
(a) Represent another person in the same matter in which that person's interests are materially adverse to the interests of the former client; or
(b) Represent another person in a substantially related matter in which that person's interests are materially adverse to the interests of the former client unless the former client consents after consultation; or
(c) Use information relating to the representation to the disadvantage of the former client in the same or a substantially related matter except as Rule 1.6 would require or permit with respect to a client. Thus, without a former client's consent, a lawyer may not represent another client in the same or a substantially related matter in which that client's interests are materially adverse to the interest of the former client.
It is generally said by the courts that in determining whether a law firm is disqualified, "the firm whose disqualification is sought bears the burden of proof." E.g., see, Heringer v. Haskell, 536 N.W.2d 362, 365 (N.D. 1995) "[A]ny doubt must be resolved in favor of disqualification." Heringer, at 365.
The substantial relationship test presumes a lawyer acquired confidential information from a former client if the current representation of a client whose interests are adverse to those of the former client is the same as or substantially related to the former representation. ABA/BNA, Lawyers' Manual on Professional Conduct 51:201 (2002). "[W]hen an attorney engages in a conflict of interest on the same matter, he or she is in a position to act on the confidential information learned from the relationship with the first client, whether or not that information is actually disclosed or acted upon in advising the new client." Damron v. Herzog, 67 F.3d 211, 215 (9th Cir. 1995). "The test does not require a detailing of the confidences allegedly transmitted, nor must confidences actually have passed between the former client and the lawyer." Annotated Model Rules of Prof. Conduct Rule 1.9, p. 153 (3d ed. 1996).