Role of professional conduct rules in conflict of duties injunctions

On the relationship of the conduct rules to injunctions to restrain lawyers acting in the face of a conflict of duties, Goubran cites some useful authorities. I have always been astonished by what I thought was the Australian courts’ universal and complete disregard in these kinds of applications to the professional conduct rules’ conflicts provisions. All the moreso since the introduction of the rule dealing with current-client and past-client confidential information conflicts was introduced into the Law Institute’s rules of conduct for solicitors. But Goubran’s diligence has turned up the following judicial comments on the use to be made of the rules:

  • In Farrington v Rowe McBride & Partners [1985] 1 NZLR 83 Richardson J said at 92:

‘Now the ethical standard set by the professional body concerned is not to be taken as the measure of a practitioner’s fiduciary obligation in equity to his client … But that insistence on obtaining the prior consent of both parties in every case before acting in the transaction reflects a peer recognition of the importance of disclosure.’

  • Everingham v Ontario (1992) 88 DLR (4th) 755, 761–2 (Callaghan CJOC, Hartt and Campbell JJ) is also apparently releavnt on this point.
  • In Uncle Toby’s Co Pty Ltd v Trevor Jones Steel Fabrications Pty Ltd (in liq) (Unreported, Supreme Court of Victoria, 12 October 1995) Batt J said at 29ff:

‘counsel for Austcom relied on R3.3(a) and R3.3(b), R3.4 and R4.4(a) of the Rules of Conduct and Practice of the Victorian Bar and contended that, in the light of them, junior counsel should have declined the brief of 27 October 1993 and both counsel should have declined the brief of 11 March 1994, and, more relevantly, that the continued retainer of them on behalf of the insurers should not be allowed. The general principle is that, whilst the terms of professional conduct rules are to be taken into account in determining whether or not to restrain a lawyer from acting, actual or threatened breach of professional conduct rules does not necessarily result in a restraining order being made: [Matt Connock, ‘Restraining Lawyers from Acting in the Face of a Conflict: Discussion and Advice in Australia’ (1995) 12 Australian Bar Review 244,] 263. But in Victoria these Rules are recognised by statute by virtue of being rulings made by the Victorian Bar Council for the purposes of s14B(c) of the Legal Profession Practice Act 1958. Accordingly I do not accept in its entirety the insurers’ submission that ethical consequences are irrelevant and I find it necessary to consider those Rules further.

The Rules were not formally proved but no objection was taken by counsel for the insurers to the handing to me of a purported extract from the rules. They read as follows:

“3.3 DUTY OF CONFIDENCE – SUBSEQUENT PROCEEDINGS

(a) Where a barrister obtains confidential information or knowledge of a person’s business or personal affairs and is later placed in a position where that information or knowledge could be used against that person, the barrister shall not act or continue to act against that person.

(b) A barrister shall not use confidential information or knowledge which he or she has obtained concerning a person to the detriment of that person in subsequent proceedings whether that person is involved in those proceedings or not.

3.4 DUTY OF CONFIDENCE – OTHER USE OF INFORMATION

A barrister shall not, whether during or after the cessation of the relationship of barrister and client –

(a) communicate to any person information which has been confided in him or her in the course of that relationship and which is still confidential; or

(b) use such information to the detriment of the client or of any person who is entitled to the benefit of the confidence.

4.4 REFUSAL OR RETURN OF BRIEF – MANDATORY A barrister shall refuse to accept or retain a brief in the following circumstances:

(a) Where the barrister has already advised or drawn pleadings and is then offered a brief from the other side in the matter, unless the first client, on being informed of the offer of the brief by the other side, states that there is no objection to the barrister accepting the brief.”

R3.3 and R3.4 require no comment because, in my view, they do not go beyond the principles which I have applied earlier. R4.4(a) does go beyond those principles. However, I accept the submission for the insurers that it is inapplicable. R4.4(a), as I read it, postulates that a barrister has already advised or drawn pleadings against “the other side” in a pre-existing litigious dispute from whom the barrister is then offered a brief. Here counsel had not drawn or settled pleadings or advised against the insurers and indeed at the time they drew and settled the defence in the third party proceeding and advised about it the insurers were not another “side” (or parties) in any litigious dispute. Nevertheless, I had throughout the hearing and retain an uneasy feeling that it is unseemly for counsel’s names to appear on the pleadings of more than one party or group of parties in one whole proceeding. It is certainly, in my experience, out of the ordinary.’

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