SUMMARY
We have seen in this chapter that the degree of protection offered to clients varies significantly between practices. Where full-scale Chinese walls are used, the most secure seem to be those erected by the large City firms, or those that exist naturally within multi-office national practices.
These firms have the personnel and facilities to enable them to separate all relevant staff and documentation. Yet such walls are rarely used. In most cases a simple undertaking is given by fee-earners that they will not disclose relevant confidential information. In these circumstances there is bound to be a risk that information will pass within a firm to the detriment of one or more clients.It is difficult to assess the protection afforded to clients in these circumstances. Much depends upon the ethos of the firm concerned. Smaller firms certainly believe they have high ethical standards and can trust colleagues not to abuse a system that operates almost entirely on trust. Larger firms, on the other hand, tend to adopt a pragmatic approach, distinguishing between different types of conflict. They too rely on trust, but where there is a conflict and they still wish to act, they have a range of protective measures which they are then able to apply. Where there is a direct conflict they may impose a full-scale Chinese wall. In other situations they will rely on what they describe as ‘mini-walls’, these being, in effect, no different from the procedures adopted by medium-sized firms in similar circumstances. It may be more difficult for very large firms, given the number of fee earners involved, to establish beyond question that a form of protection which is essentially based on trust can indeed be relied upon.
Some firms appear to believe that physical separation is not required provided their clients consent to the firm acting.
The difficulty with this strategy is that clients will not necessarily understand all the implications of giving consent. The degree of understanding possessed by the corporate client of a large City firm may be very different from that of an inexperienced private client. This is presumably why the Law Society prohibits firms from acting in conflict situations even when clients give their consent.Firms may respond by saying that their members are meticulous when acting in a conflict situation and that, if there were any risk that a client’s interests would be compromised, the firm would decline to act. It is questionable whether it is reasonable, given the commercial pressures on solicitors, to place absolute reliance upon their adherence to the highest ethical standards. Arguably, the leading judgements in this field have taken the changed commercial environment into account when reviewing protections that have to be in place before a firm can be allowed to act in a conflict situation. Whether we should accept at face value solicitors’ own claims to professional integrity is something that needs to be considered in the context of a broader review of conflicts of interest. This is a topic that I shall address in the concluding chapter of this book.