In and Around the Bar Cba Ethics Committee
| Publication year | 2012 |
| Pages | 17 |
| Citation | Vol. 41 No. 3 Pg. 17 |
2012, March, Pg. 17. In and Around the Bar CBA Ethics Committee
March 2012
Vol. 41, No. 3 [Page17]
Formal Opinion No. 68-Conflicts of Interest: Propriety of Multiple Representation, Adopted April 20, 1985; Revised December 9, 2011
Introduction
The Colorado Bar Association (CBA) Ethics Committee (Committee) has issued several opinions regarding conflicts of interest. Despite the guidelines provided in previous opinions, concern remains over the application of these guidelines to specific conflict situations. This opinion considers the propriety of multiple representation in the following common conflict situations:
1) representation of both a husband and wife in negotiating a property settlement before dissolution proceedings commence;
2) representation of both the buyer and seller in a residential real estate transaction;
3) representation of both the buyer and seller of a business; and
4) representation of individuals in drafting an entity agreement, and representation of solely an entity in its formation.
Syllabus
The Colorado Rules of Professional Conduct (Colorado Rules or Colo. RPC) may prohibit a lawyer from representing both a husband and wife in drafting an uncontested divorce settlement agreement, because this agreement ultimately must be approved by a court. Representation of both parties in a filed dissolution of marriage proceeding is not permissible. The other three scenarios present transactional rather than litigation situations and require thorough analysis as to whether the representation is proper. The Committee does not adopt a per se rule prohibiting a lawyer from representing opposing parties in a transactional matter; however, a lawyer should proceed very cautiously. Before accepting employment, the lawyer must determine whether the lawyer can adequately represent the interests of each party to the transaction. In those situations in which a lawyer ethically may accept such a role and agrees to do so, the lawyer must obtain the informed consent of each client, confirmed in writing. The nature of the disclosures required and the ability to represent each party adequately will depend on the situation in question. Under no circumstances should a lawyer representing multiple parties be considered a mere "scrivener" in a transaction.
Analysis
I. General Conflicts Analysis: Current Clients
Colo. RPC 1.7 addresses conflicts of interest for current clients. It provides:
(a) Except as provided in paragraph (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 paragraph (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 writing.
The structure of Colo. RPC 1.7 provides an analytical framework: (1) identify whether there is a concurrent conflict, based on either direct adversity between the lawyer's clients or a significant risk of a material limitation on the lawyer's representation of the client; (2) if a conflict is present, determine whether each client can consent to the conflict or if it is nonconsentable; and (3) if the conflict is consentable, determine what must be communicated to the client to obtain informed consent, confirmed in writing.
A. Does a concurrent conflict of interest exist?
Colo. RPC 1.7(a) provides that a concurrent conflict of interest exists both where there is direct adversity and where there is a significant risk that a lawyer's other responsibilities or interests will materially limit the lawyer's ability to represent the client.(fn1) If a concurrent conflict exists, the lawyer must consider whether, despite the existence of the conflict, the lawyer will be able to provide competent and diligent representation. If more than one client is involved, the issue must be resolved as to each client.
The lawyer's duty to assess conflicts does not end with the initial consent of each client. If there is any significant change in the circumstances of the representation, the lawyer should repeat the analysis and again obtain informed consent.
B. If a conflict is present, may the client consent to the conflict?
Some conflicts may not be resolved by consent. Colo. RPC 1.7, cmts. [14]-[15]. If a conflict is nonconsentable, the lawyer must decline the representation. Both Colo. RPC 1.7 and the Restatement (Third) of the Law Governing Lawyers (Restatement) identify three categories of nonconsentable conflicts: (1) representation prohibited by law; (2) representation of opposing parties in the same proceeding; and (3) where a lawyer is unable to provide competent and diligent representation to each affected client. Colo. RPC 1.7(b) and Restatement, § 122. Representation prohibited by law includes, for example, limitations on the ability of some government entities to consent to conflicts. Colo. RPC 1.7, cmt. [16]. The second category, representation of opposing parties in the same litigation, undercuts our adversarial system of justice. Colo. RPC 1.7, cmt. [17].
Determining whether representation falls in the third category can be difficult. The lawyer must reasonably conclude that the lawyer will be able to provide competent and diligent representation to both clients. Colo. RPC 1.7(b)(1) and cmt. [15]. The Restatement standard asks whether a disinterested lawyer would conclude the conflict would result in an adverse effect on the lawyer's relationship with or representation of either client. Restatement, § 122, cmt. g(iv).(fn2) If so, the conflict is nonconsentable. Id. Nonconsentable conflicts include joint representation of criminal co-defendants with irreconcilable interests and conflicts among members of a class action, despite informed consent of the class representative. Id. See also Colo. RPC 1.7, cmts. [16], [33]. A nonconsentable conflict also exists when a lawyer's duty of confidentiality to others precludes the lawyer from providing sufficient information to obtain another client's informed consent. See Thomas D. Morgan, Lawyer Law: Comparing the ABA Model Rules of Professional Conduct with the ALI Restatement (Third) of the Law Governing Lawyers,§ 4.A.5 (2005).
No per se prohibition exists against representing more than one client on the same side in a litigation or transaction as long as the lawyer determines that the representation...
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