Tuesday, March 1, 2016

Risk News: Contractor Conflicts, ICC Conflicts Policies & More



"More Tips for Firms Hiring Contract Attorneys" --
  • “Many law firms, faced with clients who want to reduce their legal spend, utilize contract attorneys to provide legal services at a reduced rate. As previously discussed, there are risks associated with hiring contract attorneys that implicate issues like the duty to supervise, the exclusivity of contract attorneys, overtime, and documentation of the employment arrangement. Those risks materialize in various ways, from ethical challenges and undetected conflicts of interest to wage and overtime claims.”
  • “While some legal malpractice insurers specifically ask about the use of contract attorneys in writing coverage for law firms, many do not. This type of ambiguity creates one of the greatest malpractice risks for law firms using contract attorneys.”
  • “Many policies require that, for coverage to exist, the services performed must arise out of an attorney-client relationship. For those law firms who retain contract attorneys as independent contractors (subject to IRS standards), this can be especially complicated. The law firm may find itself arguing that, on one hand, an independent contractor attorney does not represent the law firm's client for conflict purposes, but, on the other hand, does represent the client enough to fall within the firm's legal malpractice insurance coverage.
  • “Because of this potential struggle, it is recommended that law firms define their relationships with any contract attorneys and to confirm during the insurance application process that the legal malpractice insurer will provide coverage should a claim arise.”
"ICC clarifies when arbitrators should disclose potential conflicts of interest" --
  • “The International Chamber of Commerce (ICC) International Court of Arbitration has detailed the circumstances in which an arbitrator should disclose a potential conflict of interest. It has adopted new guidance to help arbitrators decide whether to disclose possible conflicts of interest in cases that they work on.”
  • “It is up to each arbitrator to decide whether a disclosure should be made, the ICC said. But the guidance note describes specific situations that may call the arbitrator's impartiality into question, including if the arbitrator or his or her law firm has represented one of the parties, has a business relationship with a party, or has a professional or close personal relationship with counsel for one of the parties or its law firm.”
  • “The ICC recently announced that it will now publish the names and nationality of arbitrators sitting on ICC cases on its website, with details of whether the appointment was made by the court or by the parties, and which arbitrator is the tribunal chairperson, as well as clear information on the cost consequences of delays in submitting draft arbitration awards.”
"Gibbons Shouldn’t Be DQ’d From Pollution Suit, Rexam Says" --
  • “Rexam Beverage Can Co. on Thursday urged a New York federal judge to reject Quanta Resources Corp.’s efforts to disqualify its counsel Gibbons PC from a suit alleging Rexam contributed to contamination at a Queens refining center owned by Quanta, saying the company’s motives were purely tactical.”
  • “Rexam argued in a memorandum of opposition filed by Frankfurt Kurnit Klein & Selz PC, its special professional responsibility counsel, that Quanta waited too long to argue that Gibbons should be disqualified because the firm had advised Quanta during its bankruptcy proceedings in the 1980s.”
  • “On Thursday, Rexam said that Quanta knew in August 2012 that two attorneys representing Rexam in the matter had joined Gibbons. Quanta waited a year before filing its original motion to disqualify and waited three years before filing the instant motion, according to Rexam.”

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