Introduction to Conflicts of Interest Symposium: Ethics, Law and Remedies

Article excerpt

John F. Sutton, Jr.*

The profession is indebted to The Texas Center for Legal Ethics and Professionalism and to the Julius Glickman Research Chair in Business and Professional Ethics for providing this opportunity, with The Review of Litigation, to explore the problems of conflicts of interest. These problems are among our most inescapable and disconcerting areas of professional responsibility.

The focus of The Review of Litigation naturally is on conflicting interests in litigation, which have high visibility from many disqualification decisions. Transactional lawyers, however, also face similar conflicting interest issues, covered by the same disciplinary rules.

This introduction is an overview of three basic systems for controlling conflicting interests: disciplinary sanctions, procedural sanctions, and personal ethics. The premise of this introduction is that these systems are not functioning satisfactorily, largely due to the failure to establish separate standards for disciplinary, procedural, and ethical purposes. The early confusion was in separating ethics and law. Now the main confusion is between the appropriate uses of procedural disqualification standards and disciplinary standards.

Emphasis is on the conflicts between former and current clients because in that setting are the most troublesome disqualification standards. There are, of course, other equally important issues of conflicting interests, particularly among present clients1 and between lawyer and client.2 These conflicting interest issues arise in office practice as well as in litigation.

I. Standards Governing Conflicting Interests: Ethics or Law?3

Is the lawyer confronted with a conflicting interest problem to be guided by "ethics"-by the lawyer's own sense of right and wrong and of loyalty to present and former clients and to the judicial system? By the locally enforceable law of professional discipline? By a court's procedural disqualification standards? By liability standards of tort, fiduciary, and contract law? In other words, by enforceable law or by personal ethics?

A careful lawyer will be guided by all of those controls, legal and ethical. A sense of morality or ethics helps avoid questionable entanglements. When enforceable legal standards leave room for the exercise of personal discretion, personal ethics should guide the lawyer.

II. Conflicting Interests Standards: Disciplinary and Procedural

A pressing but inadequately probed issue is the extent to which legal standards for conflicting interests should vary according to the remedy being sought. A single standard cannot be effective and fair as a hortatory guide to personal ethics, a quasi-penal law punishing lawyers by disbarment or other penalty, a procedural disqualification rule, and a tort or fiduciary standard for the recovery of damages by an injured person.

Each remedy serves particular policy interests. A procedural remedy should safeguard prompt, fair trials. A motion to disqualify invokes a primary concern whether disqualification will be just and fair to each party. Fairness of the trial, not fault of the lawyer, is the key.

The comprehensive disciplinary systems4 of the states are designed to determine whether a lawyer has violated disciplinary law and, if so, the proper punishment. Disqualification motions are not a part of that disciplinary process. The appropriate action for a court, upon learning during a disqualification hearing of a violation of disciplinary standards, is to notify the disciplinary authority, which should then determine fault and punishment. Appropriate action does not include use of disqualification as punishment.5 Rather, disqualification serves to guard against prejudicial or unfair trials. Most courts have eschewed giving extradisciplinary effect to disciplinary law6-except, unfortunately, when making procedural decisions in disqualification hearings.

Most courts, having failed to adopt specific disqualification rules, have filled the gap by using disciplinary standards as makeshift procedural rules. …