The duty of loyalty and conflicts of interest

| Mar 23, 2017 | Professional Malpractice Law

One of the duties attorneys owe to their clients is loyalty, which entails zealously representing their interests over and against the interests of others. When an attorney takes actions which run adverse to the interests of a client, it can prove detrimental to one or both clients’ cases. Lawyer’s have the duty, therefore, to avoid conflicts of interests so that they can wholeheartedly advocate for their clients.

Conflicts of interests can occur with both current clients and former clients, and different rules apply for each. As to current clients, lawyers are not supposed to agree to represent an individual if doing so would be directly adverse to the interests of another client or if there is a significant risk that representing that individual would be materially limited by responsibilities owed to another client, a former client, a third person, or one of the lawyer’s personal interests.

Conflicts of interests involving current clients can generally be waived if each affected client gives written consent after full disclosure of the conflict and the lawyer believes it is possible to provide effective representation to each client. That being said, waiver is not possible for some types of cases.

There are a number of specific rules laid out in the New Jersey Rules of Professional Conduct regarding specific types of conflicts of interest lawyers must avoid. For example, lawyers are not allowed by the ethics rules to enter into business transactions with clients or to acquire ownership interests which are adverse to the client unless specific conditions apply. Neither are lawyers allowed to use information related to the representation of a client to that client’s disadvantage unless the client provides informed consent. Solicitation of gifts and negotiation of literary or media rights based on a case are disallowed, and there are specific requirements dictating when a lawyer may accept compensation for representation from someone other than the client and when a lawyer may provide financial assistance to a client.

That these and other rules apply is important for clients to understand so that they understand when a lawyer’s unethical behavior may have resulted in harm to their interests. In our next post, we’ll look at the duties attorneys owe to former clients, as well as the rules that apply to conflicts of interests in the context of representation provided by a law firm.