Some practitioners mistakenly assume, when acting for multiple parties in a matter, any conflict of interest concerns will be overcome by the clients’ consent to act.
The requirements to obtain consent under rules 8.3 and 8.5 of the Professional Conduct and Practice Rules 2005 (the rules) do not trump a practitioner’s obligations to avoid conflicts of interest.
The combined effect of rules 8.1A, 8.1B, 8.2 and 8.4 is a practitioner has an ongoing duty to avoid conflict of interest between two or more clients and not act where the practitioner:
- determines they cannot act for all clients without acting in a manner contrary to the interests of one or more of them or
- reasonably believes a material conflict of interest is likely to arise.
Rule 8.1A specifically provides that nothing in rule 8 limits or restricts any common law, equitable or statutory duty or obligation a practitioner owes.
In addition, practitioners should not overlook the fact that client consent cannot overcome the absolute prohibitions on acting in circumstances described in rules 8.6 to 8.8.
LPLC’s claims show that practitioners who act for multiple parties in a matter are often caught unawares by conflicts, which can be difficult to anticipate and arise before the practitioner has realised the danger. Consequently, the practitioner is left exposed to allegations of breach of the rules and duties at common law and in equity, as well as allegations they preferred the interests of one client over another.
We recommend practitioners do not act for multiple parties in a matter. However, any practitioners who choose to do so notwithstanding the clear risks need to remain vigilant about the possibility of conflicts throughout the course of the matter.