LLB197 Lecture Notes - Lecture 8: Chinese Wall, Undue Influence, Casebook
TOPIC 7: Duty of Loyalty and Conflict/ Duty to Account
Concurrent conflict (Part 1)
Successive Conflict (Part 2)
Former client conflicts
See RULE 10
‘in possession of confidential information’
- ‘material’ to current and ‘detrimental’ to former
• Informed written consent
• Information barrier
Courts have jurisdiction to disqualify a lawyer from acting against a former client – injunction. See Newman v
Phillips Fox [1999] WASC 171. 3n Text pp. 316-320.
Judicial intervention threshold
“Confidential Information”
Originally communicated in confidence
o Remains confidential and may reasonably be considered remembered or capable, on the memory being
triggered, of being recalled; and
o Relevant to the subject maGer of the subsequent proposed retainer
See Prince Jefri Bolkiah v KPMG (1999) – casebook reading 14 and text p. 318
“Material” and “Detrimental”
o “A solicitor is liable to be restrained from acting for a new client against a former client if a reasonable
observer, aware of all the relevant facts, would think that there is a real, as opposed to a theoretical
possibility that confidential information given to the solicitor by the former client might be used by the
solicitor to advance the interests of a new client to the detriment of the old client”:
- Carindale Country Club Estate Pty Ltd v Astill (1993) 115 ALR 112 at 118 5 per Drummond J
Judicial Intervention threshold
o The information that might be seen as ‘material’ to current client and ‘detrimental’ to former can
extend to information on business practices, not just information concerning legal issues - Ausmedic
Australia Pty Ltd v Whitely Medical Supplies Pt Ltd [2012] NSWSC 1270 (see text pp 319-320).
o Note Rule 10 focus is now on the ‘material’ and ‘detrimental’ aspect as opposed to the possibility/ risk of
disclosure.
Current clients conflict
‘A lawyer cannot give his exclusive, undivided attention to the interests of his client if he is torn
between…his client’s interests and those of another client to whom he owes the self-same duty of loyalty’
- Davey v Woolley, Hames, Dale & Dingwall (1982) 133 DLR (3d) 647 (Canadian case)
Uniform Conduct Rules (Solicitors)
• RULE 11
• Adverse interests informed consent + satisfy duties
• Information barriers might be required – r 11.4.2
• Where actual conflict - could act for one with informed consent – BUT may have to cease both – r 11.5
Solicitor-client conflict (topic 3)
A lawyer must avoid a conflict of interest between themselves (the practice or associate) and their client
- see r 12
o Law Society of NSW v Harvey (casebook – reading 13)
o Reflects the application of fiduciary duties
o Fiduciary principle – lawyers must give undivided loyalty to their client . This is important for the public
perception of profession.
Solicitor-client conflict
Can be avoided by informed consent
o As the duty is owed to a client they can relax the rules by giving informed consent to the action of
the solicitor
o Essential to informed consent is …“full candour and appropriately complete disclosure to the
client by the lawyer” - O’Reilly v Law Society of New South Wales (1988) 24 NSWLR 204
¨ Prudent lawyer would insist client get independent advice
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