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Conflict Waivers: When are they Enforceable?

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I must apologize first for posing a question in the title of this blog that doesn’t have a definitive answer. I can give you some tips for making your conflict waivers as enforceable as you can, but there is no iron-clad way to ensure enforceability. Whether a conflict waiver will be effective, or upheld if challenged, depends in part upon whether the client reasonably understood “the material risks that the waiver entailed.”  Rule 1.7, Comment [22].  In other words, does the client truly appreciate what they are giving up by signing the waiver.

Since the burden will be upon the lawyer trying to enforce the waiver, here are the key items to keep in mind.  First, make sure the waiver is in writing and signed by the client. Needless to say, a court will necessarily be looking to the language of the waiver to determine whether it should be enforced. Second, make the waiver clear and concise.  This would not be the time to use complicated or flowerly language. The key is clarity and simplicity, so that a client would easily understand the risks of consenting to the conflict. Third, and most importantly, make sure that you identify the possible future conflict of interest with specificity.  Even if you cannot precisely identify the type of conflict that may arise, you should at a minimum be able to identify the possible adverse party and the nature of the conflict.  For example, if sharing confidential information between co-plaintiffs is necessary for effective representation, then consent to share relevant confidential information amongst co-plaintiffs must be addressed in the waiver.  At the same time, the failure of one party to allow the lawyer to share clearly relevant information amongst co-plaintiffs becomes a foreseeable future conflict of interest, and should be discussed in the conflict waiver.  Furthermore, any kind of conflict that you can envision at the outset (e.g., dispute arises among multiple claimants as to how to proceed, cross claims developing between co-plaintiffs, etc.) should be described with specificity in the waiver.  The more specific a waiver, the more likely it will be upheld if challenged.

Now, a conflict waiver that is more open ended and less specific in nature may also be upheld, especially where the client is sophisticated in legal matters and has access to independent counsel in signing the waiver.  Rule 1.7, Comment [22].  For example, Law Firm has been asked by large Insurance Company to render corporate tax advice.  Another department of Law Firm regularly handles personal injury matters against Insurance Company.  Law Firm asks Insurance Company to give informed advanced consent to Law Firm representing any of its other clients against Insurance Company in matters unrelated to the corporate tax advice.  Clearly, the firm may not know who will hire them in the future, but it does know the kinds of cases it generally handles and the nature of the conflict.  While the consent to the conflict is rather vague and open-ended, Insurance Company is a sophisticated client with in-house counsel who can review the consent/waiver.  This waiver will likely be upheld.  Law Firm must also obtain waivers from any personal injury clients who are adverse to Insurance Company during the time firm is representing Insurance Company.

There are also circumstances under which a waiver to a future conflict should not be sought: the representation is prohibited by law, the client lacks capacity to consent, one client will assert a claim against the other in the same litigation, or the lawyer will not be able to provide adequate representation to one or more of the clients. In addition, if a lawyer must disclose confidential information of one client to obtain informed consent by the other client, and there is no authorization to disclose that confidential information, the conflict waiver cannot be obtained.

Finally, regardless of the client’s sophistication, it is always a good idea to advise the client in writing to seek independent counsel and to give a reasonable opportunity to do so before signing any waiver.

Stay tuned for a future blog on when waivers can be revoked by the client for cause.