Conflicts of interest under the SRA Code of Conduct

Ethics is examined across SQE1, and conflicts of interest are among its favourite scenarios. The relevant provisions sit in the SRA Standards and Regulations, principally the SRA Principles and section 6 of the SRA Code of Conduct for Solicitors, RELs and RFLs.

Two kinds of conflict

• Own-interest conflict: a conflict, or significant risk of conflict, between you or your firm and the client. The Code generally prohibits acting in those circumstances.
• Client conflict: a conflict, or significant risk of one, between two or more current clients in the same or a related matter. Paragraph 6.2 prohibits acting unless the clients have a substantially common interest, or are competing for the same objective, and safeguards are in place. Those safeguards include each client giving informed consent, given or evidenced in writing, to you acting, and your being satisfied that the benefits to the clients outweigh the risks and that it is reasonable to act for all of them. Sharing one client's confidential information with another needs its own consideration.

Whether there is a conflict is judged by the facts, and whether it can be managed depends on the exceptions above. If the conflict cannot be managed, you cannot act for both, and must consider whether you can continue for either.

Confidentiality

Conflicts and confidentiality are related but distinct. A solicitor owes a continuing duty of confidentiality to former clients as well as current ones. In Prince Jefri Bolkiah v KPMG [1999] 2 AC 222 the House of Lords held that a firm which holds confidential information from a former client may be restrained from acting against that client where there is a real risk of disclosure. Mere assertion that information barriers are in place is not sufficient; the court looks at the effectiveness of the measures.

The Principles in the background

These provisions are applications of the Principles, particularly acting in the best interests of each client, acting with integrity and maintaining the trust the public places in the profession. When a scenario feels uncomfortable, ask which Principle is engaged and then find the Code paragraph that gives it practical effect.

An exam method

1. Identify every client and every interest in the scenario. Are they current or former?
2. Is the matter the same or related, and is there a conflict or a significant risk of one?
3. If it is a client conflict, do the 6.2 exceptions apply, and are the safeguards and informed written consent in place?
4. Separately ask whether the firm holds confidential information that would need to be disclosed or that could be misused.
5. Choose the option that complies with both the conflict and the confidentiality obligations. Often the best answer is to decline to act or to stop acting for one party.

Always check the current text of the Code, because the SRA can amend it.

General educational information only. It is not legal advice, it does not predict any exam result, and UK SQE Course is not affiliated with or endorsed by the Solicitors Regulation Authority. Check the SRA website for current exam information.