A lawyer must not be in conflict between the interests of a client with his/her own interests or the interests of an associate. The foundation for this arises from the fiduciary duties of a solicitor and client. A lawyer must not put his or her interest before those of the client, the solicitor must act in the client's best interests , the solicitor has duties of loyalty and confidentiality.  In the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015, sets out the rules concerning any potential conflict ( the Rules). Breach of the Rules are capable of being professional misconduct or unsatisfactory conduct.

In the three following examples a lawyer must not be in conflict.

1. Representing one client against a former client:

Conflict of interest can occur when a lawyer represents a current client against a former client if the interests of the former client could be prejudiced by the representation of the current client, and the lawyer has confidential information about the former client that would be relevant to the current matter. Regulation 10 of the Rules states:

10 Conflicts concerning former clients

10.1 A solicitor and law practice must avoid conflicts between the duties owed to current and former clients, except as permitted by Rule 10.2.

10.2 A solicitor or law practice who or which is in possession of information which is confidential to a former client where that information might reasonably be concluded to be material to the matter of another client and detrimental to the interests of the former client if disclosed, must not act for the current client in that matter UNLESS:

- 10.2.1 the former client has given informed written consent to the solicitor or law practice so acting, or

- 10.2.2 an effective information barrier has been established.

2. Representing two or more individual clients with differing interests:

Conflict of interest can occur when a lawyer represents two or more clients with differing interests and the lawyer's ability to represent each client adequately is impacted, and there is a risk of confidential information being disclosed from one client to another. Regulation 11 of the Rules states:

11 Conflict of duties concerning current clients

11.1 A solicitor and a law practice must avoid conflicts between the duties owed to two or more current clients, except where permitted by this Rule.

11.2 If a solicitor or a law practice seeks to act for two or more clients in the same or related matters where the clients' interests are adverse and there is a conflict or potential conflict of the duties to act in the best interests of each client, the solicitor or law practice must not act, except where permitted by Rule 11.3.

11.3 Where a solicitor or law practice seeks to act in the circumstances specified in Rule 11.2, the solicitor or law practice may, subject always to each solicitor discharging their duty to act in the best interests of their client, only act if each client:

- 11.3.1 is aware that the solicitor or law practice is also acting for another client, and

- 11.3.2 has given informed consent to the solicitor or law practice so acting.

11.4 In addition to the requirements of Rule 11.3, where a solicitor or law practice is in possession of information which is confidential to a client (the first client) which might reasonably be concluded to be material to another client's current matter and detrimental to the interests of the first client if disclosed, there is a conflict of duties and the solicitor and the solicitor's law practice must not act for the other client, except as follows:

- 11.4.1 a solicitor may act where there is a conflict of duties arising from the possession of confidential information, where each client has given informed consent to the solicitor acting for another client, and

- 11.4.2 a law practice (and the solicitors concerned) may act where there is a conflict of duties arising from the possession of confidential information where an effective information barrier has been established.

11.5 If a solicitor or a law practice acts for more than one client in a matter and, during the course of the conduct of that matter, an actual conflict arises between the duties owed to two or more of those clients, the solicitor or law practice may only continue to act for one of the clients (or a group of clients between whom there is no conflict) provided the duty of confidentiality to other client(s) is not put at risk and the parties have given informed consent.

3. Where their own business or personal interests differ from those of their client:

Conflict of interest can occur when a lawyer's own interests conflict with the interests of their client, and the lawyer cannot provide impartial advice or representation to the client. This type of conflict of interest can arise when a lawyer has a financial or personal interest in the outcome of the matter they are handling for their client. Regulation 12 of the Rules state:

12 Conflict concerning a solicitor's own interests

12.1 A solicitor must not act for a client where there is a conflict between the duty to serve the best interests of a client and the interests of the solicitor or an associate of the solicitor, except as permitted by this Rule.

12.2 A solicitor must not exercise any undue influence intended to dispose the client to benefit the solicitor in excess of the solicitor's fair remuneration for legal services provided to the client.

12.3 A solicitor must not borrow any money, nor assist an associate to borrow money, from:

- 12.3.1 a client of the solicitor or of the solicitor's law practice, or

- 12.3.2 a former client of the solicitor or of the solicitor's law practice who has indicated a continuing reliance upon the advice of the solicitor or of the solicitor's law practice in relation to the investment of money,

UNLESS the client is:

(i) an Authorised Deposit-taking Institution,

(ii) a trustee company,

(iii) the responsible entity of a managed investment scheme registered under Chapter 5C of the Corporations Act 2001 (Cth) or a custodian for such a scheme,

(iv) an associate of the solicitor and the solicitor is able to discharge the onus of proving that a full written disclosure was made to the client and that the client's interests are protected in the circumstances, whether by legal representation or otherwise, or

(v) the employer of the solicitor.

If you need advice on any potential conflict of law scenario, please contact our office.

*Disclaimer: This is intended as general information only and not to be construed as legal advice. The above information is subject to changes over time. You should always seek professional advice before taking any course of action.*