Attorney negligence for serving clients with whom they may have conflicts of interest is the most common type of legal malpractice claim in the U.S., reports a prominent insurance broker in its 10th annual survey of 10 lawyer malpractice insurers. Professional duties of advocacy, loyalty and confidentiality can all be compromised when legal counsel represents a client whose interests are in conflict with another client, a former client, the lawyer’s own interests or those of a family member or third party, another attorney at the firm or another similar relationship.
Law firms must set up vigorous conflict-checking systems
Attorneys and law firms must maintain robust procedures to check for conflicts before taking on a client. For example, did anyone in the firm already represent a party with interests adverse to the potential new client? Has anyone conducted business on a personal basis with the client or the client’s adversary?
Attorney-client relationships involving conflict of interest can put a lawyer into a position where they may be uncomfortable advocating aggressively for a client, such as when the advocacy could harm another client with adverse interests. Or they may have confidential information from a previous client relationship that impacts the new representation – and to whom is the lawyer to be loyal at that point?
The answer is that a comprehensive conflicts analysis early on should have unearthed the conflict, precluding the representation. But if the conflict later comes to light, the lawyer should immediately act to either resign from representation or get informed consent from both clients to continue, depending on the circumstances and what the rules of professional conduct in the jurisdiction allow.
In some situations, a judge may disqualify legal counsel with a conflict of interest in a case.
Legal malpractice lawsuit for damages
When a client believes that their legal counsel represented them while having a conflict, it may be the basis of a legal negligence lawsuit. However, the conflict of interest alone is not enough to recover in the suit – the negligence or malpractice involving the conflict must have caused the client to suffer a loss.
For example, did the conflict cause conflicting loyalties for the lawyer that pressured them not to negotiate as aggressively as they should have, resulting in a lower settlement? Or, did the conflict impact the quality of preparation for and presentation of the client’s case in court, causing an unusually low damage award?
Another situation in which a conflict of interest can cause harm to a client is when the lawyer represents both sides of a dispute or in a transaction such as both spouses in a divorce or parties negotiating a contract. When the two sides have competing interests, it is difficult for the attorney to sufficiently advocate for each party.
Anyone who thinks they have been harmed because of legal representation involving a conflict of interest should speak with a legal malpractice attorney to understand their potential legal remedies.