The Gazette 1991

GAZETTE

JULY/AUGUST 1991

inability to be independent. The

consumer would accordingly

require to consult new pro-

fessional advisers.

MDPs will, in many instances,

jeopardise the professional

relationship with the client, the

judiciary and professional col-

"MDPs will jeopardise the

independence of the legal

profession and of the

advice given."

leagues. MDPs will jeopardise

the independence of the legal

profession and of the advice

given.

(iii)

Conflicts of Interest

The following is an extract from

the CCBE Information Gazette of

Ireland which highlights the

important area of conflicts of

interest. The author, Mr. H.

Collot d'Escury, a lawyer from

the Netherlands, highlights the

matter by reciting personal

experience.

"Conflicting professional

rules:

In the case of notaries in the

Netherlands, it is profession-

ally acceptable for the notary,

should two parties wish to

enter into an agreement, to

advise and draw up a draft

agreement for both parties

concerned.

Now let us assume that one

party is a client of one of the

notaries of your firm and the

other of one of the lawyers.

The first client (that of the

notary) regards it as normal

and insists that his notary

makes the draft for both sides

and does not accept that the

lawyer-partner advises the

other client, which client has

a much longer standing with

the firm. What do you do?

Conflicting interest:

The difference in the type of

practice may create diffi-

culties. The notary may have

clients who use his services

always for conveyancing

matters in real estate. Such a

notary client - certainly

where the mixed partnership

is fairly young - may not

necessarily use the same

MDP firm for lawyer services.

Now it may happen that

such a notary client is

engaged in a conflict leading

up to legal action against a

- client of one of the lawyer

partners. As the notary client

himself

has

instructed

another law firm to handle

this matter there seems to be

no problem. The lawyer

partner is acting for the

adversary of the notary client.

So far so good. What may

happen, however, as we

found out, was that suddenly

out of the blue the notary

client objected to the lawyer

partner acting in this matter

on the ground that the notary

partner has privileged know-

ledge of certain real estate

transactions he intended to

complete involving consider-

able amounts of money. He

felt that this was dangerous

for him.

It has been argued of

course that there was no

reason for the notary client to

be afraid, because the lawyer

partner will never try to have

and cannot have access to

this privileged knowledge.

Furthermore, we pointed

out that he himself had

chosen another law firm to

assist him in the legal

proceedings. All to no avail!

We decided in the end to

withdraw from the lawsuit,

but were not happy.

It created much com-

motion, also within the law

firm and brought us to the

conclusion that a "mixed

committee' to handle these

highly complicated conflicts

of interest problems - which

in this case we in fact had not

foreseen - was absolutely

necessary!

This example brings me to

another problem. How do you

realise as partners of the one

discipline that there may be a

conflicting interest with a

client of one of the partners of

the other discipline?

In our case we can ask the

administration whether the

name of the counterpart of

one of our clients appears in

the client administration of

either the law practice or the

notary practice and who is

the responsible partner. The

client administration is split in

two parts but the admini-

stration, at least the head of

the administration, can be this

check.

The question was put to me

whether one should not avoid

the possibility that the

partners of one profession

can get to know the names of

the clients in the section of

the other profession. In our

case we do not want to avoid

this unless the partner in

question in a very special

case decides that for reasons

such as protection of the

client, it should not be known.

One can, however, keep

this totally separate and avoid

this possibility if there were

reasons - for example, again,

the protection of the client.

This could arise in the case of

a mixed partnership with a tax

lawyer or accountant who do

not - like the lawyers -

enjoy the privilege of

professional secrecy in

criminal investigations.

One would then have to

keep the administration of the

law practice totally separated

from that of the tax practice

or accountant's practice and

include only the result in the

administration of the mixed

partnership.

In our case there remains

the question of professional

secrecy. We see no reason to

avoid the situation where a

practitioner on the one side

can find out whether a certain

person or company is a client

of one of the partners of the

other side. The knowledge he

thus obtains is privileged and

thus protected. In case of a

mixed partnership with tax

lawyers or chartered account-

ants one would have to

arrange a system whereby the

tax lawyer and/or accountant

would have no access to the

names of the clients of the

law practice, combined with a

warning system for the

lawyers".

(iv)

Foreign Dependence

If partners of the multi-

national accountancy firms

were to become partners of

Irish solicitors, it would not be

long before the financial

muscle of English, European

or American influence could

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