A conflict of interest arises when members act for two or more clients who have competing interests. In particular, a conflict exists where members, or members’ firms, owe separate fiduciary duties to act in the best interests of two or more clients in relation to the same or related matters, and those duties conflict or there is a significant risk that they may conflict. A conflict of interest may interfere with, or give the appearance of interfering with, a member’s ability to act ethically and with integrity, thereby undermining a client’s trust in the member.
If an actual or potential conflict of interest arises, members should either cease to act for one or both of the clients or should properly disclose the nature of the conflict to both clients. Members may only continue to act for both clients if both give their informed consent. If consent cannot be obtained from both clients, members may be able to continue acting for one of the clients so long as the duty of confidentiality owed to the other client is not put at risk and the other client’s position has not been prejudiced.
Conflicts of interest are not resolved by use of an information barrier (sometimes termed a “firewall”). An information barrier is properly used to prevent the disclosure of confidential information. (For further details, see section 4). Members must never have a financial interest in the outcome of a claim that they are handling e.g. shareholding or other ownership or beneficial rights in a client, their customer or other material party to a claim. Members and members’ firms must be transparent with their clients, the client’s customers and other material parties to a claim regarding any perceived or improper advantage that they receive which arises from a claim, and seek their informed consent to keep such a benefit. For example, members and members’ firms must declare any benefit received from the introduction of a supplier, contractor or service provider on a claim.