Lawcovernotes March 2019

9. Acting for two or more clients in the same matter may appear manageable, efficient and profitable; but it is likely to attract unwanted risks for solicitors. In a recent professional negligence claim, the solicitor acted for both the lessor and lessee of commercial premises. During negotiations between the parties, complex issues arose around the maintenance of the premises, rent review and the option to renew the lease. The solicitor acted until what was thought to be successful completion. Later, the lessor and lessee fell into dispute over the lease and litigation commenced. The solicitor was joined to the litigation. It was alleged that the solicitor failed to: ^ ^ advise the parties to obtain independent legal advice ^ ^ acted in a position of conflict ^ ^ compromised the position of the parties by disclosing confidential information without instructions, and ^ ^ failed to properly advise either party on the aspects of the lease which later came into dispute. In light of the difficult negotiations surrounding the lease, the allegations against the solicitor were difficult to defend. The solicitor was further disadvantaged by only maintaining one file for the transaction rather than maintaining separate and distinct files for each party. The complexities arising from acting for more than one party are recognised by Rule 11 of the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015. Rule 11 outlines that acting for more than one client in a single matter can lead to the interests of one /either party being compromised, due to there being a conflict between the duties owed by the solicitor to each client. Failure to comply with Rule 11 may not only give rise to a claim of negligence against the solicitor but may also give rise to a finding of professional misconduct. Lawcover receives a number of claims arising from solicitors acting for one or more parties in a matter. Those claims typically arise in transactional matters involving property, distribution of estates and/ or the creation of binding financial agreements. It is important that solicitors are acutely aware of the risks of acting for more than one party in a matter, and the higher duty of care and due diligence required in those circumstances. Tony Reynolds Claims Solicitor A common practice that is not without risk