New Zealand Law Society - Lawyers fined $4,000 each after failing to recognise ‘obvious’ conflict of interest
A Standards Committee (Committee) determined that two lawyers, Mr X and Mr Y, engaged in unsatisfactory conduct after they failed to recognise a conflict of interest when acting as counsel in a criminal trial. The Committee found that they had breached rules 6 and 6.1 of the Lawyers and Conveyancers (Lawyers: Conduct and Client Care) Rules 2008 (RCCC) and agreed that the conduct was at the more serious end of the spectrum. Mr X and Mr Y were censured, ordered to pay a fine of $4,000 each and costs of $500 each.
Mr X and Mr Y were acting as senior and junior counsel for the defendant in a criminal case. Around three months later, Mr Y was assigned to act for one of the Crown witnesses in the defendant’s case for a separate criminal matter. Mr X and Mr Y discussed the potential conflict and considered the matters to be separate. They intended for any cross-examination in the defendant’s case to be carried out by Mr X.
The police officer in charge of the criminal case was alerted to the arrangement by a member of the public. The Crown solicitor then raised the issue with Mr X and Mr Y, who explained that, in their view, no conflict arose.
A memorandum was filed by the Crown solicitor, stating that there was a conflict of interest in the case and the trial should be aborted as a result. This application was opposed by Mr X on the basis that he had instructions to continue acting for the defendant as sole counsel.
Ultimately, a judgment was delivered finding a conflict of interest with Mr Y acting, which also extended to Mr X. The jury was discharged and the trial was aborted.
Mr X and Mr Y self-reported the matter to the New Zealand Law Society Te Kāhui Ture o Aotearoa. The Crown solicitor also filed a complaint about their conduct, arguing that they should have been aware that there was a conflict of interest. She asserted that they had failed to advise their clients or the Crown of the issue, which caused the trial to be aborted.
The Committee considered whether Mr X and Mr Y had failed to promote the interests of their clients to the exclusion of the interests of third parties, in breach of rule 6 of the RCCC. The Committee also considered whether they had acted for more than one client where there was a more than negligible risk of being unable to discharge their obligations in breach of rule 6.1.
The Committee was particularly concerned about Mr X and Mr Y’s belief that the conflict could be mitigated. This evidenced to the Committee a lack of professional insight from two senior and experienced lawyers. The Committee also considered that there was no ambiguity or complexity in the application of the professional rules in this area. The idea that the conflict could be avoided was inconsistent with the principle of rule 6 of the RCCC, which provides confidence in the impartiality of representation.
In the Committee’s view, the existence of a conflict ought to have been readily apparent to Mr X and Mr Y. It was clear that there was a more than negligible risk that Mr Y would be unable to discharge his obligations owed to both clients. The Committee pointed to the fact that the conflict was raised by a member of the public, which underscored the obviousness and gravity of the situation. The divergence between the interests of the Crown witness and the defendant was so obvious to the Committee that rule 6.1 immediately applied.
The Committee concluded that Mr X and Mr Y breached rules 6 and 6.1 of the RCCC by failing to take appropriate steps regarding a conflict that was “so obvious it ought never to have been denied.” This was determined to be unsatisfactory conduct.
When considering the appropriate penalty, the Committee credited Mr X and Mr Y for self-reporting the matter to the Law Society and for acknowledging the steps they should have taken in the circumstances. However, the Committee noted that this acceptance came belatedly and only after the trial was aborted as a direct consequence of the mis-managed conflict.
Mr X and Mr Y were both experienced practitioners who should have been aware of the circumstances that might result in a conflict of interest. It was concerning to the Committee that they both continued to act after recognising a conflict. The Committee also noted the far-reaching consequences that the abortion of the trial had on both the prosecution and defence.
The Committee censured Mr X and Mr Y. They were ordered to pay a fine of $4,000 each and costs of $500 each.