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Other Conflict of Interest Issues

Terms:

“Class Action Suits”
Where individual claims against a defendant are aggregated for ease of case administration. One firm may represent thousands of plaintiffs banded together in a suit against the defendant. Oftentimes those who opt into a class action suit waive rights to settle individually with the defendant. 

Lawyer-Family Relationships 

When two lawyers share an immediate family relation, they may not represent clients whose interests are directly adverse without obtaining consent of the clients after consultation. See Model Rule 1.8. 

Family relationships can bring about potential conflicts of interest in awkward ways. Take the following example:

Oinker, the general partner in the firm Oinker, Porker & Swine, assigns a divorce case to a young associate. The opposing client in the case is represented by Oinker’s sister. 

In most states, a familial relationship between attorneys who are with private law firms representing adverse interests does not per se disqualify either firm from handling the matter, provided that neither of the related attorneys has any contact, participation, or specific knowledge with respect to the case. State ethical rules often recommend that an ethical wall be erected to insulate the related attorneys from directly working against each other. Disclosure to the clients regarding the familial relationships is mandated. If one of the related attorneys are directly involved in the case, the firms must obtain fully informed consent from the clients. 

If neither Oinker’s sister nor Oinker were personally involved in the divorce, only a simple disclosure would be necessary in order to fulfill ethical obligations – a full written consent by the clients would not be necessary. However, since Oinker’s sister is participating in the representation of a client, full disclosure plus a formal consent would be required.

It might initially seem like a convenience for parties on the same side of a case to share representation with the same lawyer, but conflicts often arise that force a lawyer to choose sides among the clients.

For example, a lawyer who tries to represent two defendants being charged with robbing a bank. If the defendants both tell the same story, without implicating one another in the crime, perhaps the representation would go smoothly. But what if one of the clients tells a story that implicates the other in the crime? The clients will end up defending themselves against one another, as well as against the arm of the state. The lawyer will perhaps be forced to support one client to the detriment of the other. In a criminal case, this could result in an ineffective assistance of counsel claim in violation of a defendant’s Constitutional guarantee of representation in addition to a violation of the ethics rules.

The Model Rules hold, with some exceptions, that a lawyer who represents two or more clients in a case must not participate in making an aggregate settlement of the claims of the clients (a settlement for all the clients in one shot). In a criminal case, as in the case above, a lawyer may not make an aggregate agreement as to guilty or nolo contendere pleas, unless each client consents after consultation. The nature of all claims or pleas involved must be disclosed and each client must participate in the settlement or agreement. See Model Rule 1.8. 

An exception to the above rule may be found in “class action” suits. In a class action lawsuit, one lawyer may represent a host of clients who individually would have little motive or lack standing to sue. In class action suits, a lawyer may be authorized by a court to represent thousands of individuals. For example, millions of people may each be entitled to a $1 refund on their phone bill. None of these individuals would go through the time and expense to vindicate their rights to one dollar in court. However, for the good of corporate governance, lawyers may obtain authorization to represent many individuals who have been short-changed by the company. These lawyers are usually entitled to settle on behalf of those who agree to be involved in the class action suit. Most of the time, when you agree to be involved in a class action suit, you do not retain the right to settle individually with the defendant company. Generally, to settle on your own you have to opt out of the class and sue individually. See Federal Rule of Civil Procedure Rule 23.