INTRODUCTION

In chapter 6 I examined the way solicitor firms respond when confronted with a decision whether to act in the face of conflict. In this Chapter I shall explore the measures which are put in place when a firm decides that it will con­tinue to act in the face of what, at least under a strict interpretation of the rules, is a conflict of interest.

Although Law Society rules are designed to prevent solicitors from acting in conflict situations, there is no rule of law prohibiting such action.^[418] As discussed in chapter 2, the law recognises that, provided certain conditions apply, solici­tors may act where there is a conflict. Much depends on the nature of the con­flict. When acting against former clients, for example, the courts have determined that ‘reasonable measures’ must be in place to prevent information from moving within a firm.^[419] Such measures have been held to include Chinese walls or ‘other similar arrangements’ provided that:

—they are not established ad hoc but form part of the established working arrangements of firms;

—there is an on-going educational programme in place for all staff;

—there are strict and carefully-defined procedures for staff who wish to cross the wall;

—walls are monitored by compliance officers;

—disciplinary sanctions are enforced where there is a breach of the wall.^[420]

Where, on the other hand, a conflict arises because a firm wishes to represent separate clients who may have opposing interests in the same transaction (same matter conflicts), or where the firm acts for various clients whose interests may conflict (separate matter conflicts), client consent is the crucial requirement. Informed consent must be obtained for same matter conflicts but implied con­sent may be sufficient for separate matter conflicts.^[421]

In law, therefore, a distinction is drawn between different types of conflict when determining the action which needs to be taken by firms. The most strin­gent measures are required where a firm seeks to act against a former client. In these cases physical barriers must be in place to prevent information moving within the firm. However, no physical barriers are required for other types of conflict.

Some two-thirds of the firms which participated in this study reported that they had acted in a conflict situation.^[422] Of these, the majority said that they did so on a regular basis.^[423] This chapter examines what ‘special measures’ firms adopt where there is a conflict, whether such measures comply with the legal requirements, and whether they offer clients adequate protection. In order to evaluate the appropriateness of the protective measures used by firms, it is first necessary to review the mechanisms available and to assess whether the type of conflict ought to make any difference to the measures selected.