25
Jul
11

Mind Your Conflicts

As reported earlier here, an Ames & Gough survey reported that legal malpractice cases were on the rise and getting bigger, and the primary cause was the real estate recession.  It is worth making another point about this survey, and that is that conflict of interest claims were either the most common or second most common types of claims reported by all but one of the insurance companies surveyed, and conflict of interest claims were the largest cause of malpractice claims overall.
The most important factor in conflict of interest claims is the very beginning of the representation.  Attorneys have a duty to identify and address conflicts of interest, and sometimes it is important to raise mere potential conflicts of interest, not only for the client but also for the benefit of the attorney.  Raising the issue and identifying the potential conflict may make it more likely to be recognized if the potential becomes the actual. 

Conflicts of interest are best addressed on the front end by carefully screening new clients, seeking advance consent to conflicts to conflict when appropriate, and clarifying the identity of the client in each representation.

The failure to properly advise clients in connection with conflicts of interest may result in subsequent claims of legal malpractice.  Conflict of interest cases can also be the most serious type of legal malpractice claim.  They have the potential to create two claims rather than one (each client in the conflict may bring a claim), and conflict cases will often permit a breach of fiduciary duty claim that may permit the recovery of attorney fees and punitive damages.

So remember – with each new representation, the best defense may be simple due diligence.

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