Friday, January 23, 2015

Conflicts Waivers – "Still Waiving After All These Years"



The New York Law Journal Reports: "Judge Rejects Disqualification of Law Firm in Joint Defense" --
  • "A Commercial Division judge has rejected a motion to disqualify a law firm from representing parties in a joint defense because 'virtually all conflict waivers would be unenforceable' if the court did so."
  • "The Ridgeline parties argued that Eilender and his firm should be disqualified, even though a waiver of conflict was signed. Eilender represented Ridgeline and other parties who were once codefendants in a lawsuit challenging the sale of a company that owns a biodiesel refinery in Carthage, Mo. But now they on the opposite sides in litigation."
  • "Justice Shirley Werner Kornreich  rejected that request for disqualification in an opinion earlier this month in Gem Holdco v. Changing World Technologies, 650841/2013: 'If disqualification was warranted in this case, it would follow that virtually all conflict waivers would be unenforceable, a result which is at odds with this state's legal policy,' Kornreich said. 'Such a result would significantly impair the ability of co-defendants to mount a joint defense, leading to significant litigation inefficiencies and increased legal costs for litigants, who would unnecessarily have to hire more lawyers to perform duplicative and expensive work.'"
  • "Eilender said in an interview that the motion to disqualify his law firm was 'completely a litigation strategy' undertaken by a 'sophisticated consumer of legal services.'"
  • "While there is a school of thought that rejects advance waivers of conflicts of interest, Eilender said his firm's engagement letter was meant to deal with the uncertainty of the future and plan ahead for conflicts arising between the jointly represented parties. If his firm's letter had been rejected by the judge, there was no way the firm could ever represent multiple clients without being conflicted out, Eilender said. 'The contract actually meant what it was supposed to mean and the court backed it up,' Eilender said."

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