When Clifford Chance General Counsel Chris Perrin talks about conflicts of interest, lawyers pay attention. The man whom the Financial Times calls the “czar” of conflicts has been working on the subject for nearly a decade, most recently as chair of the City of London Law Society’s Committee on Professional Rules and Regulation. It’s in that capacity that he has now called for a “significant widening of client conflict rules,” according to a story in today’s edition of The Lawyer:
Currently the rules permit law firms to act on conflicting instructions only where the clients share a common interest and consent or where two clients are competing for the same asset, such as in an auction sale. “In addition to these two exceptions,” proposed Perrin, “there should be a wider exception to be used by sophisticated clients, which would enable them to waive conflict in any circumstances.”
Perrin argued that if two sophisticated clients want to get a deal done and both have historically used the same firm, it is impeding their desire to get the transaction done to prevent them from using that firm. And if both parties are happy that a firm will look after both their interests, he said, there is no reason why it should not. The proposed definition of ‘sophisticated clients’ would include clients, which have received independent legal advice or which have in-house legal departments and the exception would not apply in litigation matters.
This rang a bell with me, and sent me off into National‘s archives to find an article published in the March/April 2004 issue (not online, unfortunately) about a proposed change to the Law Society of British Columbia’s professional conduct handbook. Proposed Rule 6.3.1 would have enabled lawyers to act against current “sophisticated” clients without their consent if (a) the matters are substantially unrelated and (b) the lawyer has no confidential information that might reasonably affect the other representation. (The law society’s contemporary bulletin on the subject provides more information.) Continue Reading