#16641 - Professional Conduct In Blp - Business Law and Practice
CONDUCT IN BLP
| Issue | Principle | Outcomes | Indicative Behaviours | |
|---|---|---|---|---|
| Multiple individuals approach you and ask you to act for all of them in relation to the formation of their partnership. What should your response be and why? | 4 | O(3.4), O(3.5) – generally, a solicitor cannot act if there is an own interest/client conflict, or a significant risk of an own interest/client conflict. Check if exceptions in O(3.6) [the clients have a “substantially common interest”] or O(3.7) [the clients clients are “competing for the same objective”] apply. In the case of the formation of a partnership, the clients may well have a “substantially common interest” under O(3.6). | IB(3.3) – declining to act for where you may need to negotiate on matters of substance on the client’s behalf IB(3.5) – declining to act for clients under O(3.6) where the clients cannot be represented even-handedly or will be prejudiced by lack of separate representation IB(3.11) – you may not have not achieved these Outcomes if acting for multiple clients under O(3.6) where the clients’ interests in the end result are not the same IB (3.12) – you may not have achieved these Outcomes if acting for multiple clients in a conflict of interests under O(3.6) where it is unreasonable to act because there is unequal bargaining power between the clients |
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| A trainee is asked by a client to give an undertaking on his behalf. The trainee gives it, knowing that the firm has a policy that trainees cannot give undertakings. The client was not aware of this policy but did know that they were a trainee. | 2,6 | O(11.2) – “you perform all undertakings given by you in a reasonable timescale or within a reasonable amount of time.” | IB (11.5) – “maintaining an effective system which records when undertakings have been given and when they have been discharged.” | An undertaking is binding even if it is to do something outside your control. Unless stated to the contrary, The trainee will be expected personally to make the payment. Undertakings can be enforced against your firm by the court. Therefore, the firm will be expected to implement the undertaking as a matter of conduct. |
| It is a separate question as to whether the undertaking binds the firm as a matter of agency. There may be a claim against the firm as a matter of agency, but clearly here there was no actual authority. If the person to whom the undertaking was given did not know the trainee to be a partner, it may be difficult to establish apparent authority. | ||||
| The firm used to act for a partnership of A and B, now acting for A in a partnership dispute against B | 4 | 4.4 – Do not act for A in a matter where A has an interest adverse to B, and B is a client for whom you hold confidential information which is material to A in that matter… Definition of ‘Client’ | 4.5 - If the firm have any confidential information about B, or the partnership, they must cease to act for A in relation to the dispute |
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| One partner wishes to leave the partnership and the other partner has agreed to buy their interest, can you act for both of them? | 4 | 3.4; 3.5 – There is a general prohibition on acting in conflict situations whether that be an own interest conflict or a client conflict 3.6 – Substantially common interest exception does not apply as the client conflict is not peripheral | 3.3 – Declining to act for clients where you may need to negotiate on matters of substance on their behalf e.g. price between a buyer and seller 3.11 – decline to act where the clients’ interests in the end result are not the same |
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