What Happens if a Lawyer Violates Conflict of Interest Rules?
WHAT HAPPENS IF A LAWYER BREAKS THE CONFLICT OF INTEREST RULES?
Lawyers have a duty to identify conflicts of interest and handle them properly.
If a California lawyer breaks the conflict of interest rules, (s)he may be subject to:
- disqualification/an order to recuse himself or herself from representing the relevant client
- in some cases, disqualification applies not only to the lawyer, but to the entire firm for which the lawyer works
- professional discipline by the California Bar (this may include fines, suspension, or loss of the license to practice law)
WILL THE BAR ASSOCIATION PUNISH LAWYERS WHO HAVE CONFLICTS OF INTEREST?
Violations of the conflict of interest rules are evaluated on a case by case basis. If a lawyer willfully violates these rules, (s)he may be subject to discipline. It’s important to note, however, that the threshold for discipline or penalties is different from the threshold for disqualification or recusal from representation.
In fact, a court has the power to remove a lawyer from representing a client even if there has been no breach of the ethics rules. (This is because courts have inherent power to govern the matters they oversee.)
WHAT ARE THE PENALTIES FOR VIOLATING ETHICS RULES?
As you might expect, the penalties for violations of ethics rules vary significantly–and “ethics” covers more than merely conflicts of interest. However, the penalties for breaking the conflict of interest rules in California can include the following:
- An order to return any fees received from the client (usually, where a lawyer agreed to represent a client even though a conflict of interest existed)
- The inability to collect fees from the client and/or invalidation of the retainer agreement
- Civil liability to the client, for breach of fiduciary duty, professional negligence (legal malpractice), or breach of contract
- Monetary penalties (fines)
Willful violation of the conflict of interest rules can have legal consequences for the client, too. Courts have reversed both civil and criminal judgments where a party’s (or defendant’s) lawyer had a non-waived, or non-waivable, conflict of interest.
Given the severity of the potential consequences, it’s critical for lawyers to run conflict checks, and ensure all conflicts of interest are identified and cleared (if possible) before accepting representation of clients.
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