01 Oct Conflicts of Interest

by Natasha Orr, Senior Associate

In the recent Federal Circuit Court decision of Rollinson & Chase, Judge Newbrun was asked to determine whether the wife’s solicitors could continue to act for her in circumstances where:

1. The Firm acting for her had initially spoken to the husband and booked him in for a free initial consultation at their office.
2. The husband attended their office that same day for a free initial consultation and they took his instructions in relation to property settlement matters and provided him with some general advice. A file note was made in relation to the matters discussed.
3. In March 2017, the wife engaged the Firm and they commenced corresponding with the husband.
4. The husband engaged another Firm who wrote a without prejudice letter to the wife’s solicitor in late March 2017 which in summary:

• Raised the conflict of interest issue;
• Sought to reserve the husband’s right to insist that the wife’s solicitors stop acting for her; and
• Stated that “ in the spirit of settling the issues between our respective clients without unnecessary delay and unnecessary legal costs we are instructed to respond to your client as set out hereunder ” and the letter proceeded to address the husband’s position in relation to property settlement matters and then make an offer of settlement.

The practice manager at the Firm engaged by the wife gave evidence that the solicitor who had advised the husband in the free consultation was not the same solicitor who was now acting for the wife and, the file note from the free consultation had been, in essence ‘quarantined’ from solicitor acting for the wife.

At the hearing, the husband objected to the file note being admitted into evidence. The Court allowed it, finding:

[28] The file note was admissible in proof of the wife’s contention that the information provided by the husband to the wife’s solicitors … was so general and brief in its nature as not to constitute confidential information …

[29] In any event, the file note was admissible in proof of the wife’s contention that the contents of the husband’s … solicitor’s letter … constitutes a waiver (at least an implied waiver) of any confidentiality or privilege arising out of the provision of information to the wife’s solicitors ….”

The Court found that the letter from the husband’s solicitor in March 2017 consisted of a waiver of any confidentiality and privilege saying “the copious factual information provided by the husband in his then solicitor’s letter of 21 March 2017 can be seen to be a very detailed elaboration of the basic information of the husband referred to in the file note.

Notably, the fact that the correspondence was marked “without prejudice’ did not prevent the wife from relying on it when making the contentions as to waiver.

Some important points to ‘take away’ from this case:

1. Firm’s offering free consultations need to limit the information collected and the advice given during those meetings. It is likely that a free consultation will prevent the solicitor from acting for the other party in that matter unless the party who attended the free consultation consents to them acting against them or waives the privilege.
2. If there is a concern about a conflict of interest, it should be raised immediately and you must be careful not to provide information or make statements which could be considered a waiver of privilege.

Parties should seek legal advice from a qualified family law lawyer to protect their interests. Fedorov Lawyers ensure that a conflict check takes place before your consultation to protect your rights. Call us now to make an appointment for advice that you can trust.