Wednesday, October 19, 2011

Concerning Conflicts...

An assortment of conflicts management scenarios in the news recently:
  • BofA seeks to oust AIG law firm from $10 billion case – They allege a partner working on behalf of AIG previously defended entities now owned by BofA: “…a London-based partner at Quinn Emanuel Urquhart & Sullivan. He is no longer working on the American International Group Inc case following Bank of America's objections, the bank said in the filing, made late on Monday.”
    • Fordham law professor and legal ethics expert James Cohen weighed in against the motion to disqualify : "I don't think there is a conflict. They are unrelated matters and his representation of Merrill and First Franklin is more than two years in the past. The mere claim that a lawyer developed a strategy for defending this kind of lawsuit does not mean the lawsuits are significantly related." He also noted "...it could prove 'problematic' if presiding judge Barbara Jones decided Becker was not screened fast enough, but that an effective screen could address this issue."
  • Firm disqualified 9 years after client interview – Prudential Insurance successfully disqualified a firm it argued received confidential information about the litigation at hand when it interviewed it as potential counsel: “Prudential representatives had spoken with lawyers from DeCotiis in November 2002 so that the firm could represent Prudential in the litigation, but Prudential decided to go with another firm the next day.”
  • John Edwards affirms retention of counsel accused of conflicts – “Earlier this month, federal prosecutors filed a motion with the court requesting a hearing on the government’s contention that Lowell’s previous representation of two likely prosecution witnesses could impact Edwards’ constitutional rights to an attorney free of conflicts.” (For his part, Edwards says he’s “waiving any such conflict.”)
  • Reexamining conflicts of interest in the current economic environment – Argues that clients should be cautious about identifying and waiving conflicts: “…one takeaway from the Great Recession, and specifically from the proliferation of litigation that has followed, is the importance of thoroughly vetting potential conflicts of interest when choosing outside counsel.” The author explores a recent case of a firm accused of representing both a mutual fund and advisor to the fund.
  • Do contingency agreements create conflicts? – DLA Piper tried to get King & Spalding disqualified, arguing that its contingent fee agreement would cause the firm to push back against a settlement offer short of its own $35m “break even” point. A judge denied the motion, citing factors including the high cost to the client of having to change firms five years into the litigation.

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