Thursday, August 31, 2017

Catching up on Contentious Conflicts



Here are a few updates from earlier this Summer still worth noting:

"Report skewers law firm over conflicts" --
  • "A venerable Twin Cities law firm has come under sharp criticism for allegedly failing to address the conflicts of interests that arose in the course of its decades-long representation of a successful family-owned business that is now engulfed by multiple lawsuits involving warring family members."
  • "In a report commissioned by the board of directors of Twin City Fan Companies, former Minnesota Supreme Court Justice James Gilbert faults past and current attorneys at Lindquist & Vennum for the firm’s simultaneous representation of TCF, TCF’s former CEO Charles Barry, and other members of the Barry clan, including Charles Barry’s now ex-wife Melanie Barry and their son Michael Barry, TCF’s president."
  • “'Here Lindquist & Vennum failed to appreciate the risks presented by the many roles it undertook for TCF and the Barry family and as a consequence the clients were not make aware of those risks while many complicated intercompany and shareholder transactions were taking place,' wrote Gilbert, the principal at the Gilbert Mediation Center. 'As the events unfolded, those risks materialized into reality.'"
  • "Although Lindquist’s billings for both personal and corporate legal services were typically paid by TCF, Thomas Carlson, a Lindquist lawyer who handled estate planning services for Barry family members, said 'he deemed TCF as a third party beneficiary of any combined personal legal services,' according to the report."
  • "Carlson did not respond to an email or phone call seeking comment. Dennis O’Malley, Lindquist’s managing partner, said by way of email that the firm does not comment on matters involving clients or former clients."
In New Zealand: "Law firm Fitzherbert Rowe owes former client as much as $1.5m" --
  • "If a law firm had a proper process to check conflicts of interest, it may have avoided paying out as much as $1.5 million. Horse trainer Jeffrey Lynds has successfully sued Manawatu law firm Fitzherbert Rowe, after alleging its failure to declare a conflict of interest ended with him losing money on a bad business deal."
  • "Fitzherbert Rowe acted for Mitchell when he restructured his dairy business, as well as Mitchell's major lender, Lynds, and Lynds' and Mitchell's partnership. Various partners from the firm were involved."
  • "Lynds believed Fitzherbert Rowe knew about Mitchell's financial problems at the time of the pegasus transaction. He said that created a conflict of interest, which should have led to it going to him for informed consent, telling him he was entitled to independent legal advice due to what the firm knew."
  • "Fitzherbert Rowe denied any conflict, saying the firm was acting for Mitchell and Lynds jointly – a pair who both wanted the pegasus transaction to go ahead – and had not been asked to advise on the wisdom of the transaction."
  • "The judge found Fitzherbert Rowe breached the "double employment rule" – meaning its duty to one client could conflict another – at the point Lynds and Mitchell were about to sign the pegasus transaction...'Had they had such a system and carried out a conflict check before accepting the instructions [about the pegasus transaction], there would have been the opportunity to seek and obtain Mr Lynds' informed consent.'"
In Scotland "Litigant’s conflict of interest claim rejected after former lawyer ‘changed sides’" --
  • "A party litigant who argued that a solicitors’ firm instructed by the other party should be barred from acting because one of its consultants had previously represented her while working as a partner in a firm which merged with the opponent’s firm has her claim dismissed."
  • "By a majority of two-to-one, judges in the Inner House of the Court of Session ruled that there was no “conflict of interest” in BLM Solicitors acting for Ecclesiastical Insurance Office plc where the defender, Lady Iam Hazel Virginia Whitehouse-Grant-Christ, had previously consulted George Moore, then a partner in HBM Sayers, which had since amalgamated with BLM, with Mr Moore becoming a consultant."
  • "On behalf of the pursuers it was submitted that the court should follow the decision of the House of Lords in Bolkiah v KPMG [1999] 2 AC 222; that the real question was one of confidentiality, and it was only if there was a realistic risk of confidential information in the hands of Mr Moore being used to benefit the pursuers in the litigation that any difficulty might arise."
  • "The defender stressed that her concern about disclosure of confidential information, and, under reference to Bolkiah, asserted that there was a 'real risk of unlawful disclosure and unlawful use' by BLM of “private sensitive privileged and relevant confidential information', She also referred also to cases which supported not only the protection of such information but also a “duty of loyalty” and an “over-riding jurisdiction” of the court to intervene 'to protect the due administration of justice'."
  • "In a written opinion, Lord McGhie said: 'I have come to accept that there is no continuing obligation of loyalty in the present case and indeed that, unless there are special circumstances, there is no such duty on termination of a normal agency. Although I have come to the conclusion that dicta in Bolkiah need not be read as excluding consideration of the need to preserve public faith in the proper administration of justice, I do not think the circumstances of the present case call for intervention on that basis.' He continued: 'Mr Moore’s involvement was extremely limited and it is not suggested that the defender has had any dealings with him for about 15 years. Apart from the question of confidential material there is no practical reason to prevent his new firm acting against the defender.'"

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