Conflict of Interests

The main provisions relating to conflict of interests are to be fund in rule 3 of the Solicitors Code of Conduct 2007 (as amended). These principally replace the provisions previously to be found in Practice Rule 16D and Rule 6 (avoiding conflicts of interest in conveyancing, property selling and mortgage related services) and they deal with:

• the duty not to act (3.01)
• exceptions to the duty not to act (3.02)
• conflicts that arise when the firm is already acting (3.03)
• accepting gifts from clients (3.04)
• conflict arising from a public office or appointment (3.05)
• alternative dispute resolution (3.06)
• conveyancing and mortgage related conflicts (3.07 – 3.22)

The rule dealing with conflicts of interest should be read in conjunction with rule 4 which deals with confidentiality and disclosure, since often both issues can arise in relation to the same matter, and you should also be aware of the provisions set out in rule 5.01(1)(d) and rule 5.02(c), namely:

5.01 Supervision and management responsibilities
(1) If you are a recognised body, a manager of a recognised body or a recognised sole practitioner, you must make arrangements for the effective management of the firm as a whole, and in particular provide for:
……………..
(d) the identification of conflicts of interests;
……………..

(2) If you are a solicitor or REL employed as the head of an in-house legal department, you must effect supervision and management arrangements within your department to provide for:
……………..
(c) identification of conflicts of interests.

and the provisions in rule 18.03 dealing with conflict of interests in relation to property selling.

It is worth noting also that there is a substantial amount of guidance concerning conflict of interests which can be found in the notes to rule 3. In particular you should note the following:

• definition of conflict (notes 1-4)
• provisions as to when a firm can act with a client’s consent in defined circumstances with suitable safeguards (notes 5 – 11)
• limited and defined retainers (notes 12 & 13)
• professional embarrassment (notes 14 – 16)
• in-house practice (notes 17 – 22)
• provisions relating to co-defendants (notes 23 – 35)
• insolvency practice (notes 38 – 54)
• accepting client gifts (notes 55 – 62)
• property related issues (notes 70 – 88)

Various aspects relating to conflicts of interest will be dealt with elsewhere on this web site from time to time. In particular, you should be aware of the section entitled “Conflict Checking and Identification” which looks at the procedures which firms should consider putting in place in order to ensure not only that they comply with rule 5.01(1)(d) but also so that from a practical point of view conflicts do not arise.