Speaker 1: Hi, Tony DeWitt here, Missouri Appellate Attorney and a guy who likes to make the law make sense on YouTube. Today, we're going to talk about conflicts of interest, so stay tuned. In my view, there are two types of conflict of interest. The first is an actual conflict of interest that results from parties being crosswise with one another. And there are a whole bunch of rules that go into that, and I'll go over those in just a moment. But before we get there, let's talk about a prudential conflict of interest. A prudential conflict of interest recognizes that on the outside, there is no actual conflict of interest, but that it would still be better, all things being equal, if the person found a different lawyer to represent them. Let me give you an example. Our firm in Missouri uses a lot of doctors to testify in medical negligence cases. Now we don't use all the same doctors. We try to get degreed professionals from medical schools who are professors and teachers to go into the subject because they tend to be better at teaching the jury what the medicine is that they need to know to resolve a medical negligence case. But every now and again, one of those people will come a little bit short, or perhaps not come short, but a patient will believe that they have been injured by that particular doctor. Now, we have never represented that doctor in court, but he has testified on behalf of our clients in other cases. Is that a case that we should take? Well, the rules say you can certainly take that case because there's no actual conflict of interest. But if I were the patient, and I found out later that the doctor that I wanted to sue had been involved in cases with the people that were looking at suing him, I might have a number of really unkind things to say to those lawyers. So in that situation, even where there is not a clear conflict of interest under the rules, prudence dictates that a lawyer not take that case. And oftentimes we'll say, look, we just don't think we're the best lawyers for you in this situation. We just want you to go see the XYZ law firm down the road. And that tends to be the way that those sort of things are dealt with. Now you may wonder, okay, well, you know, you've had that doctor be a witness for you. Does that mean you're going to go and tell him when these people came in and said they wanted to sue Dr. X? Are you going to come in and tell him that so that he's, you know, so that he can take preventative action? No, we can't do that because as a potential client, you have, we have a duty of confidentiality to you. We could not tell that doctor anything about why you came to visit us. So I think that's a point that most people need to understand. Now let's talk about what conflicts of interest are according to the rules that govern lawyers. The American Bar Association's Rule 1.7, which in Missouri is designated Rule 4-1.7, says conflict of interest current clients, except as provided in Rule 1.7b, a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if, one, the representation of one client will be directly adverse to another client, or there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibility to another client, a former client, or a third person, or by a personal interest of a lawyer. So let's talk about what that means. Let's suppose that Billy and Bobby are arrested for burglary, and Billy and Bobby know a great lawyer. In fact, he's on YouTube, and he's all the time talking about criminal cases. So they come to me and they say, look, we want you to represent us in this criminal case. Well, when the lawyer is asked to do that, what most lawyers will do is they'll say, look, I can represent Billy, or I can represent Bobby, but I can't represent you both. Because there could be a chance at some point in time that the representation of one would be in direct conflict with the representation of the other. And in that situation, I'd have to withdraw, and I couldn't represent either of you. So usually, they'll decide that one of them wants to go to another lawyer. But if they don't, the problem arises in this context. As you go through and you look at the evidence that the police have collected, it's pretty clear that Billy and Bobby both are guilty as sin of this robbery. So you go to them and you say, look, your best bet here is to plead guilty. Billy says, but they don't have my face on the video camera. And while that may be true, that's likely to not be material, because if Bobby pleads guilty, he's going to be asked to testify against Billy, and now I've got a conflict of interest situation on my hand, because my representation of Bobby is going to be limited by my representation of Billy, or vice versa. As a result of that, I would have to withdraw from both their representations. So a lawyer will usually represent one or the other, but not both. Representing both people when there is a case against both of them is just not a very smart idea from the lawyer's standpoint. So let's look at Section B of that rule. Notwithstanding the existence of a concurrent conflict of interest, a lawyer may represent a client if the lawyer reasonably believes the lawyer will be able to provide competent and diligent representation to each affected client, the representation is not prohibited by law, the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal, and each affected client gives informed consent confirmed in writing. So if Billy and Bobby were just absolutely certain that they wanted me to represent them in that situation, I would have to give them informed consent, explain all the things that could go wrong, and get them to confirm in writing that they wanted me to represent them. But I wouldn't do that, and the reason I wouldn't do that is because it's not fair to either of them, and it will create nightmares for me as counsel for both. Now you might be thinking that that's the only conflict of interest rule that applies, right? No. There are other conflict of interest rules, let's look at one of those now. Conflict of Interest Prohibited Transactions. A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security, or other pecuniary interest in the client unless the transaction and the terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed, the client is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel on the transaction, and the client gives informed consent in writing signed by the client to the essential terms of the transaction and the lawyer's role in the transaction. A lawyer shall not use information relating to the representation of a client to the disadvantage of the client unless the client gives informed consent, except as permitted or required by these rules. A lawyer shall not solicit any substantial gift from a client, including a testamentary gift, or prepare on behalf of the client an instrument giving the lawyer or a person related to the lawyer a substantial gift. So there are a number of other rules, and they all boil down to you can't take advantage of a client. The bottom line is if somebody comes to me to write a will, I can't say, gee, you got a lot of money and you only have a couple of kids, I'd be happy to take some of that off your hands. Because if I did that, I'd be soliciting a testamentary gift, and that's wrong. And the reason that's wrong, frankly, is because it essentially allows someone to prey on the relationship that's already been developed with the client. So we don't do that. Similarly, we don't take back movie rights. We don't take back literary rights in a client's story. We can't do that because it conflicts with our duties to the client. When a client comes to a lawyer, the lawyer has one obligation, and that's to represent him to the best of his ability. And anything that touches on that is a conflict of interest, and for that reason should not be engaged as a lawyer-client relationship where there is such a conflict of interest. Another rule in that same area is a lawyer cannot provide financial assistance to a client. And the reason for that is because you don't want somebody who's lost their entire family to an air disaster, you know, an airplane goes down and their whole family is wiped out. You don't want that person to have legal services purchased, right? You don't want that person to go to a lawyer because he says, here, I'll pay you $1,500 to take your case. Now you're probably thinking, wait a minute, that's a pretty good deal because normally I have to pay the lawyer and yeah, he'll get a fee at the end, but this way I don't have to, you know, I don't have to worry about paying expenses or anything like that up front. Well the problem with it is, is it gives the lawyer an incentive to win that case. And you're probably thinking, well, doesn't a, doesn't a contingency fee agreement do that? Yes, it does, but not to the same extent as the lawyer having put in additional money. So we believe in the legal profession that that essentially corrupts a lawyer's independent judgment on the case and as a result of that, a prohibited transaction where the client is, you know, given financial assistance while a case is pending is just completely forbidden. Now all of that being said, there is one last rule and it's called the imputation of disqualification rule. When there are two or more lawyers in a firm, any one of them who is conflicted, so for example, Lawyer A represented a client and now is conflicted against that client and Lawyer B has an opportunity to sue that client, he can't do it because any disqualification that applies to one lawyer in a firm applies to all the lawyers in the firm. Now if Lawyer A leaves the firm, then Lawyer B could potentially take that case, but only if there was not, if the firm did not acquire information that could be used against the client and in addition, it's just never a good idea. It is never a good idea for any lawyer to take the exceptions in these rules and apply the exceptions because inevitably what happens is the exception becomes a rubber band and it gets stretched to the breaking point and that's how lawyers get disciplined. Conflict of interest rules are there to protect the client, not the lawyer. They are there to protect the client because if you have a lawyer and that lawyer has split loyalties, he has two people he has to worry about, then as a matter of course, he is not giving the clients, both clients, the full weight of his legal representation. So that's why conflict of interest rules apply and if you have any doubt that a lawyer might be, might have a conflict of interest, you should ask directly about it and you should ask for a response in writing because if there is a conflict of interest, you need to know about that and you need to either be okay with it or you need to find other counsel. So that's the story on conflicts of interest. If you have any questions, please leave them in the comments down below and as always, I thank you for watching and I hope you have a marvelous day.