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Conflicts of Interest
Acting for two clients
Our advice to any client must not be limited by any duty to someone other than that client. We have many clients, and it is not unusual to be requested to act for two clients in the same, or closely related, matters. In such cases we, and you, must be aware at all times of the potential difficulties.
If asked to act for more than one party in a conveyance, we look first to our professional rules. In general, we may not act for both seller and buyer, but there are some specific exemptions. Only if the case falls within one of the exemptions may we act at all.
If we can act, then you, and we, must still judge whether, a conflict of interest might arise. Is there anything to prevent us giving one client the unrestrained advice which we want to give, and that client expects? Is the transaction complicated, or unpredictable in some way as to allow a conflict to arise? Conflicts can be difficult to anticipate.
Often the risk of conflict seems remote, and the savings, in time and legal fees can be real. However amicable a matter is, something might happen where one client would wish to ask us a question, but not necessarily have the other client, for whom we also act, hear, either the question or the answer. In general, we will not act if such a conflict is foreseen, and must cease to act if one arises.
There are, inevitably, limitations on what we can do when acting for two clients. Where we do act for more than one client, we cannot act as umpire in any way. Our job is to work for our client as strenuously as we may. That aim is not compatible with the position of somebody who is asked to judge between two clients. Thus we cannot conduct any negotiations between the clients.
We ask clients to authorise us, to release to the other party any information relative to that transaction. If at any point the client feels disquiet about us giving unfettered advice to the other client, it is preferable that we are told immediately, and that both clients are given the opportunity, which is always present, of contacting other solicitors to defend their interests. Our assessment may change as the matter progresses. Where we begin a matter acting, but a conflict of interest arises, we must normally withdraw entirely from the transaction, and act for neither party. To act for only one client is usually possible only if both clients and ourselves are quite happy with such arrangement. To cease acting in this way is expensive and very frustrating for all involved. There is no point in clients setting out on such an arrangement without acknowledging this as a possible consequence.
If both clients wish us to act for them, we accept instructions if the potential for conflict appears genuinely remote, and both clients explicitly state that they wish us to continue, after recognising and acknowledging these difficulties. We particularly ask you, as a client in this situation, to make quite sure that you understand the risks and limitations, and to raise with us, any doubts or questions you may have before we start.
|Important: Please note that our law-bytes are retained for archival purposes only. The law changes, and these notes are often, now, out of date. You must take direct advice on your own personal situation and the law as it currently stands.|
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