Tuesday, February 9, 2010

Joint Defense Can Create New Conflicts and Imputation Challenges

Hinshaw & Culbertson have posted another interesting risk article on how joint defense agreements may put firms at increased conflicts risk tied to non-client parties. They explain that information learned from non-clients in these scenarios could be imputed to the firm and raise conflicts issues on future matters, unless involved lawyers are adequately screened.

This example stemmed out of a matter before the DC Bar's Legal Ethics Committee. With regard to screening requirements:
  • "...the Committee opined that the new firm could represent a client against a joint defense member by timely and effectively screening the lawyer, thus effectively eliminating any appreciable risk of an adverse effect on the representation. Regarding the latter, the Committee noted that two factors complicate the imputation issue. First, the firm itself might be a party to the joint defense agreement, and second, given the possibility that other members of the firm came into contact with confidential information from the joint defense members, enacting a retroactive screen could be quite difficult. The Committee therefore concluded that the firm likely could not represent a client against a joint-defense member unless the firm and its other lawyers were not bound by the joint defense agreement, and the other lawyers were not exposed to any confidential information related to the joint defense agreement."
The Committee also suggested preventative internal screening when non-client parties become involved may be a prudent protective measure in avoiding future risk and disqualification.

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