Wisconsin Lawyer: Ethics Facts Matter: Identifying Nonwaivable Conflicts of Interest:

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    September
    01
    2016

    Ethics
    Facts Matter: Identifying Nonwaivable Conflicts of Interest

    Determining which conflicts of interest cannot be waived by current clients requires lawyers to carefully examine each situation’s facts and circumstances. Analysis begins by reviewing SCR 20:1.7.

    Dean R. Dietrich

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    Question

    I often hear lawyers talking about a nonwaivable conflict of interest. What does that mean?

    Answer

    Conflicts of interest arise in many settings. As is generally recognized, a conflict of interest arises when a lawyer is considering representing a client but the representation (and the interests of that client) would be adverse or contrary to the interests of another client of the lawyer or law firm. In almost all cases, if a lawyer has a conflict of interest, every other lawyer in his or her law firm has the same conflict of interest under the provisions of SCR 20:1.10 of the Wisconsin Rules of Professional Conduct.

    Dean R. Dietrichcom ddietrich ruderware Dean R. Dietrich, Marquette 1977, of Ruder Ware, Wausau, is chair of the State Bar Professional Ethics Committee.

    Whether or not a particular conflict of interest is considered nonwaivable will depend on the specific facts that caused the conflict to arise. An analysis starts with a review of SCR 20:1.7. This Rule provides as follows:

    SCR 20:1.7Conflicts of interest current clients.(a) Except as provided in par. (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if:

    (1) the representation of one client will be directly adverse to another client; or

    (2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.

    (b) Notwithstanding the existence of a concurrent conflict of interest under par. (a), a lawyer may represent a client if:

    (1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;

    (2) the representation is not prohibited by law;

    (3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and

    (4) each affected client gives informed consent, confirmed in a writing signed by the client.

    Under this Rule, a lawyer may not represent another client even if each client is willing to give a waiver, in those instances when:

    • The lawyer’s representation of the new client would be materially limited by the interests of the lawyer aligned with another client, another former client, or another person or even the personal interests of the lawyer;

    • The representation of the new client is prohibited by law (this is not a common occurrence but could happen if the representation involves applying certain federal or state laws that would not allow steps to be taken by the lawyer on behalf of the client);

    • The representation of the new client would be directly adverse to the representation of a current client in a litigation matter (affectionately called the “V” Rule); or

    • The representation of the new client would involve advocating for a position on behalf of the new client that could directly and adversely impact the current client by resulting in a ruling that would damage a legal position held by the current client.

    These are the typical instances in which a waiver of a conflict is not appropriate and the conflict must be considered a nonwaivable conflict of interest.

    There are two other instances when a representation of a client would be considered nonwaivable; these instances are often not fully assessed by a lawyer who wants to pursue a waiver of the conflict from a current client to allow representation of a new client.

    The first instance involves those situations in which the lawyer is unable to give sufficient information to the new client to allow the new client to give a waiver of the conflict of interest. Any time a lawyer pursues a waiver of a conflict of interest, the lawyer must obtain informed consent from both the current client and the anticipated new client. The informed-consent standard requires the lawyer to disclose enough information for each client to fully understand and appreciate the reason for the waiver request and the positive and negative consequences that could arise by giving the waiver of the conflict of interest.

    If the current client has made it clear that the representation provided by the lawyer should not be discussed with anyone, the inability of the lawyer to give information to obtain an informed-consent waiver may prevent the lawyer from obtaining the permission to represent the new client.

    If the current client has made it clear that the representation provided by the lawyer should not be discussed with anyone, the inability of the lawyer to give information to obtain an informed-consent waiver may prevent the lawyer from obtaining the permission to represent the new client. The Wisconsin Supreme Court has authorized consideration of some changes to the language on confidentiality of client information that might allow lawyers in this situation to disclose sufficient information to obtain an informed consent for a waiver of a conflict.

    A second situation arises when the current client, for example a client with diminished capacity, does not have the capacity to give informed consent to the lawyer to allow the lawyer to represent another client. An analysis of whether the client is capable of giving informed consent to a waiver of a conflict or whether someone else serving as agent for the client could provide informed consent to a waiver must occur. These instances do not occur often but require sensitivity by the lawyer to ensure that the client from whom the waiver is being sought has appropriate capacity to provide the waiver. If not, the waiver cannot be obtained and the representation of the new client could not occur.

    The concept of nonwaivable conflict of interest is used very loosely, especially in arguments between lawyers over whether a lawyer should be disqualified from representation of a client because of a conflict of interest. The requirements of SCR 20:1.7 must be reviewed very carefully to determine whether or not a conflict is actually waivable and then whether informed consent can be obtained so to allow a proper waiver of a conflict of interest.




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