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Conflict of Interest - Problem Question Structure
- Module
- LPC - Legal Practice Course
- Institution
- LPC - Legal Practice Course
Complete structure on how to answer a problem question on Conflict of Interest (Business Law)
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SG3: Conflict of InterestCould we have acted for more than one client?
Acting for both of the potential clients requires consideration of Para
6.2 of the Code of Conduct for Solicitors (hereafter Code). Para 6.2
states “You do not act in relation to a matter …. if you have a conflict
of interest or a significant risk of such a conflict in relation to that
matter or aspect of it…, unless
(a) the clients have a substantially common interest in relation to the
matter …, or
(b)the clients are competing for the same objective
and the conditions below are met, namely that:
(i) all the clients have given informed consent, given or evidenced in
writing, to you acting;
(ii) where appropriate, you put in place effective safeguards to protect
your clients’ confidential information; and
(iii) you are satisfied that it is reasonable for you to act for all the
clients.”
Is there conflict of interest?
Conflict of interest is defined as “a situation where your separate
duties to act in the best interests of two or more clients conflict.”
Principle 7 of the SRA principles requires us to act in the best interests
of each client. Thus, if at any time our separate duties to act in the best
interests of (both partners) conflicted, there is conflict of interest,
which prevents us from acting for both.
Application
Generally, acting for more than one client of the same business gives
rise to conflict of interest. Although the capital contributions of (both
partners) are equal, there seems to be inequality on the (time spent
devoted to their partnership business). Thus, there needs to be a
further investigation on all of the areas of inequality within what they
have agreed to. That is likely to cause our duties to each partner to
conflict, as they may need separate advice. On the basis that there is
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