You should be able to identify many conflict or potential conflicts at the outset of your contact with a new client. However, it is also important to remember that conflicts of interest can arise throughout the course of a legal relationship. You should always remain aware of this potential and turn your mind to conflicts both at the inception of and throughout the lawyer-client relationship. The following are examples of conflicts that may arise during a retainer.
- You jointly represent business partners who subsequently have a falling-out regarding the direction of their enterprise.
- You act as plaintiff’s counsel for the driver and the passenger of vehicle involved in an accident. The insurer denies liability and alleges negligence by the driver. Since a serious issue has been raised as to whether the driver was negligent, effective representation of the passenger would likely require an action against the driver. You could not continue to act for both the driver and the passenger.
- You jointly represent co-accused. You anticipate that one of them will plead guilty and provide evidence that the other was not party to the crime. At trial they change their mind and plead “not guilty”.
- You represent two clients on unrelated criminal matters. When you receive disclosure from the Crown on Client A’s matter, Client B is listed as a witness that the Crown intends to call to testify against your client. You cannot cross-examine your own client on issues such as credibility, given your duty of loyalty to Client B and given that you could use confidential information you possess regarding Client B to impugn their credibility.
A conflict of interest may also arise when a lawyer has a personal or economic interest (other than payment of reasonable fees) that conflicts with a client’s interests and impacts the lawyer’s ability to provide unbiased counsel. Consider how each of the examples below constitutes a personal interest conflict:
- You own 15% of the shares of a privately held company. Your client intends to purchase the company and take it public and asks you to paper the deal.
- Your client wants to invest in your spouse’s free-range llama farm and asks you to help negotiate the deal.
- Your long-term client is having financial difficulties and you decide to loan them money to see them through a rough spot.
For more examples of areas where conflicts of interest may occur, please see Commentary  under section 3.4-1 of the Code of Conduct.