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Ethics in Practice |
Duties to Prospective Clients: Ethical Considerations
This article discusses the ethical and fiduciary duties owed by a solicitor to a prospective client.
The Ethics Committee, a committee of the Council of the Law Society, is tasked with providing guidance to members on their ethical obligations. The Committee responds to written questions from Law Society members by rendering a written opinion through a private and confidential letter. Members can submit a written inquiry to the Committee through the Representation and Law Reform Department at [email protected]. For detailed guidelines for inquiries to the Committee, please refer to the Council's Practice Direction 2 of 2009 which can be found on the Legal Ethics section of the Law Society's website at www.lawsociety.org.sg.
When reading this article, members should bear
in mind that the Committee has omitted facts which it does not consider crucial
to the ethical obligations of the lawyer in question or to the guidance given.
Members are advised to write to the Committee for a specific opinion on their
query in order to receive the Committee's specific guidance on their particular
situation with full knowledge of all the facts. If members wish to guide themselves
based solely on the Committee's opinion without writing in for a specific
opinion, they must accept that they run the risk that there could be crucial
differences of fact or in the applicable rules of ethics which could affect
their position and render them subject to discipline. Neither the Committee
nor the Law Society assumes any responsibility or liability in rendering the
Committee's opinions or for anything a member does or omits based on the Committee's
opinion and without seeking a formal opinion on the facts of their case from
the Committee.
Scenario
"Lawyer A meets the Wife in a brief consultation regarding her divorce matter. During the consultation, Lawyer A advises the Wife that the settlement proposal offered by Firm F representing the Husband seems reasonable. Lawyer A also informs the Wife about the difference between contested and uncontested proceedings, both for the divorce itself and the ancillary matters. The Wife does not disclose any information to Lawyer A which is confidential to her and does not subsequently retain Lawyer A. Would a conflict of interest arise if Lawyer A were then to act for the Husband in the ancillary proceedings resulting from the same divorce matter?"
At first glance, the answer to the Scenario seems clear: because the Wife did not retain or engage Lawyer A to act for her, Lawyer A owes no duties to the Wife and should be subsequently free to act for the Husband against the Wife. However, upon closer examination, this view needs to be re-assessed. A lawyer owes ethical and fiduciary duties to a prospective client, even if the latter does not subsequently retain or engage the lawyer. In this regard, the Ethics Committee has provided guidance to members on two queries involving prospective clients based on r 31 of the Legal Profession (Professional Conduct) Rules ("PCR"). This article summarises and consolidates the key aspects of the Committee's opinions; it is hoped that the following will be of benefit to members when encountering a similar situation.
Rule 31
Rule 31 PCR states:
Not to act against client
31.-(1) An advocate and solicitor who has acted for a client in a matter shall
not thereafter act against the client (or against persons who were involved
in or associated with the client in that matter) in the same or any related
matter.
(2) For the purposes of paragraph (1), the term
"client" includes a client of the law practice of which the advocate
and solicitor is a partner, a director, an associate or an employee, whether
or not he handles the client's work.
(3) Paragraph (1) shall apply even where the advocate and solicitor concerned
becomes a member of a different law practice.
(4) Nothing herein shall preclude a law practice from acting against a party in a matter provided that -
(a) the law practice has not previously acted for the party (or for persons who were involved in or associated with the party in that matter) in the same or any related matter; and
(b) any advocate and solicitor of the law practice
who has previously acted for the party in the same or related matter neither
acts nor is involved in that matter or related matter in any way whatsoever
and does not otherwise disclose any confidential information relating to the
matter or the party to any other member of the law practice."
Rule 31(1) - Disqualification of Individual Solicitor
Rule 31(1) PCR prohibits a lawyer who has acted for a client in a matter from thereafter acting against the client in the same or any related matter. A lawyer who is precluded under r 31(1) from acting against a client in the same or related matter remains precluded from doing so even if he moves to a different law practice: Rule 31(3).
Accordingly, whether Lawyer A can act against
the Wife in the Scenario under r 31(1) PCR depends on three factors:
1. Whether the Wife was Lawyer A's "client";
2. If so, whether Lawyer A previously "acted" for the Wife; and
3. If so, whether the divorce proceedings are "the same or related... matter" vis-à-vis the ancillaries.
"Client"
In the Scenario, on both a literal and purposive interpretation of r 31(1), the Wife was Lawyer A's "client".
Literal interpretation
Section 2(1) of the Legal Profession Act1 sets out an extended, non-exhaustive definition of "client" which includes "any person who retains or employs, or is about to retain or employ, a solicitor ..." [emphasis added]. Section 21 of the Interpretation Act2 provides that "[w]here any Act confers powers to make any subsidiary legislation, expressions used in the subsidiary legislation shall, unless the contrary intention appears, have the same respective meanings as in the Act conferring the power." Hence, the LPA's extended definition of "client" applies when interpreting r 31(1).
This means that r 31(1) on its face prohibits a lawyer not only from acting against a person who has previously actually retained him, but also prohibits the lawyer from acting against a person who was "about to retain" him. In the Scenario, when the Wife consulted Lawyer A, she was indeed "about to retain" him in connection with her divorce and the consultation was for that purpose. On a literal interpretation of r 31(1), therefore, the Wife was Lawyer A's "client" in connection with the divorce matter, regardless of the duration of the consultation or the eventual non-retention by the Wife.
Purposive interpretation
Section 9A of the IA mandates that "an interpretation [of r 31] that would promote the purpose or object underlying [it] shall be preferred to an interpretation that would not promote that purpose or object." The purpose underlying r 31 operates on two levels. The first level is as between the solicitor and client. On this level, "[t]he underlying rationale for such a rule is to ensure that the trust between lawyer and client is not compromised and that, on the contrary, the confidence of the client is in fact maintained" [emphasis in original].3
The second level on which the purpose underlying r 31 operates is as between the profession and the public. On this level, the underlying rationale for the rule is to uphold "public confidence in the administration of justice and the basic principles of fundamental fairness".4 As the Singapore Court of Appeal said in Seah Li Ming Edwin, "[t]here is, indeed, a larger public interest that underscores such a rule."5
Given that the definition of "client" in the LPA is non-exhaustive, that definition is therefore sufficiently open-ended to accommodate within it persons who are about to retain or employ a solicitor. Thus, this purposive interpretation leads to the conclusion that a "client" within the meaning of r 31(1) includes a person who communicates with a solicitor with a reasonable expectation that the solicitor is prepared to consider forming a lawyer-client relationship with that person and with a reasonable expectation that the solicitor will keep the discussion confidential.
Hence, even on a purposive interpretation, the Wife was Lawyer A's "client".
"Acted"
In the Scenario, Lawyer A "acted" for the Wife by supplying legal advice and information to her within the meaning of r 31(1). A lawyer-client relationship was thereby established between the Wife and Lawyer A even though no actual retainer eventuated.
For the purposes of r 31(1), a lawyer has "acted" for a particular client if he does an act in his capacity as an advocate and solicitor on behalf of or in relation to that client. Whether a lawyer has "acted" for a client is therefore a question of fact in every case.
In principle, it would be very difficult to escape the conclusion that a lawyer has "acted" for a client for the purposes of r 31(1) if he has given legal advice to that client on a matter with or without a retainer. In Turner (East Asia) Pte Ltd v. Builders Federal (Hong Kong) Ltd,6 the High Court held that "an act is an act of an advocate and solicitor when it is customarily (whether by history or tradition) within his exclusive function to provide, eg giving advice on legal rights and obligations, drafting contracts and pleadings and pleading in a court of law."7
Professor Tan Yock Lin has also commented as follows:
| no one can doubt, after Turner's case at any rate, that giving legal advice which may never give rise to litigation would also be acting as an advocate and solicitor.8 |
Although the precise outcome in Turner has been reversed by legislation,9 the statements of principle continue to be good law. Thus, the High Court's observations in Turner would be highly persuasive even though there are no Singapore cases which have defined the term "acted" for the purposes of r 31(1).
In the Scenario, Lawyer A did give legal advice to the Wife to the effect that, on the face of it, the proposal by the Husband's then solicitors appeared reasonable. Lawyer A also supplied legal information by going on to explain the difference between contested and uncontested proceedings, both for the divorce itself and the ancillary matters. Hence, Lawyer A did "act" for the Wife.
"Same or ... related matter"
In the Scenario, the divorce proceedings are not "the same or related ... matter" vis-à-vis the ancillaries.
The term "matter" for the purposes of r 31(1) does not mean a particular law suit, petition or other set of formal legal proceedings. Instead, what is a single "matter" is a question of substance, not form, and will depend upon the nature of the inquiry being undertaken by the Court in the two proceedings which are said to be the same or related and upon the questions of law or fact in issue before the Court in those proceedings. Hence, divorce proceedings and the resulting ancillary proceedings are not the "same" matter as the Court's inquiry and the questions in issue are fundamentally different.
Ordinarily, however, divorce proceedings and ancillary matters arising therefrom would indeed be "related" matters. But this is a question of fact in every case. In the Scenario where Lawyer A meets the Wife in a brief consultation and no information confidential to the Wife is disclosed to Lawyer A and where no actual retainer eventuates as a result of the consultation, the two matters are not "related".
Therefore, Lawyer A is not precluded by r 31(1) from acting against the Wife in the ancillary proceedings in the Scenario.
Rule 31(4) - Disqualification of Law Practice
Now let's add a twist to the Scenario.
"After Lawyer A met the Wife, Lawyer B joined Lawyer A's firm, Firm C. Lawyer B had already acted for the Husband in his former law firm and brought the Husband's brief with him when he joined Firm C. Can Firm C act for the Husband in view of Lawyer A's previous brief consultation with the Wife?"
This situation, which we will call Scenario 2,
would bring r 31(4) into play. Under r 31(4)(a), a law practice may act against
a party in a matter provided that it must not have previously acted for that
party in the same or any related matter. However, if a member of the law practice
(in this case, Lawyer A) had previously acted for that party in the same or
related matter, r 31(4)(b) requires that the law practice ensure that Lawyer
A:
1. neither acts nor is involved in the law practice's representation of the
Husband in the matter in any way whatsoever; and
2. does not otherwise disclose any confidential information to any other member of the law practice which relates to the matter or to the Wife.
Accordingly, whether Firm C can act against the
Wife in Scenario 2 under r 31(4) PCR depends at the first instance on three
factors:
1. Whether the Wife was a "party" in the divorce proceedings;
2. If so, whether Lawyer A previously "acted" for the Wife; and
3. If so, whether the divorce proceedings are "the same or related... matter" vis-à-vis the ancillaries.
"Party"
In Scenario 2, the Wife is no doubt a "party" in the divorce proceedings.
"Acted"
The above analysis on "acted" for the purposes of r 31(1) applies equally here because whether a law practice has previously acted for a party under r31(4)(a) necessarily depends on whether a member of that law practice has acted for a client under r 31(1). The phrase "acted for the party" in r 31(4)(a) therefore has the same meaning as the phrase "acted for the client" in r 31(1). Otherwise, r 31(4) would be overbroad in prohibiting a law practice from acting against a party in a matter even though that party was never a "client" of the law practice and no conflict of interest existed under r 31(1).
Moreover, r31(4) was enacted in September 2001 as a result of members' feedback to "ensure that a law firm or law corporation is not precluded from acting against any party just because a particular advocate and solicitor within the law firm or law corporation is conflicted from doing so provided that there are adequate safeguards to ensure that there is no risk of confidential information being disclosed."10 Rule 31(4) must therefore be interpreted permissively.
Based on the above analysis for "acted"
for the purposes of r 31(1), it is the case that Lawyer A previously "acted"
for the Wife because she was a "client" and he gave legal advice
to her. However, a different view may be taken if, for example:
1. The Wife did not seek any legal advice from Lawyer A;
2. Lawyer A told the Wife that she should seek counsel to advise her specifically; or
3. Lawyer A only expressed an opinion on the Wife's divorce matter and did not advise her on her legal rights and obligations in the matter.
"Same or ... related matter"
Applying the above analysis for "same or … related matter" for the purposes of r 31(1), the divorce proceedings and the resulting ancillaries are not the same or related because the Wife disclosed no information confidential to her during her consultation with Lawyer A.
Therefore, Lawyer A has not previously acted for the Wife in the same or any related matter and Firm C is not precluded by r 31(4)(a) from acting against the Wife in the ancillaries. Thus, it is not necessary to go on to consider the operation of r 31(4)(b).
Practical Points
It is not uncommon in cases involving prospective clients for there to be materially conflicting versions of the relevant events which occurred during the consultation between the lawyer and the prospective client. The prudent lawyer will of course have ensured that he took and kept a contemporaneous attendance note of the meeting with the prospective client no matter how preliminary it appeared. Also, if resources permitted, he would have ensured he did not attend the meeting alone.
But when members seek guidance from the Ethics Committee, the Committee is obviously not in a position to resolve conflicts of fact. Members who have received the Ethics Committee's guidance should therefore consider the risk that a court or other body which may eventually be called upon to adjudicate upon their conduct may resolve the conflicts of fact adversely to them, and come to a different conclusion on whether they have properly complied with their ethical duties.
In addition, members should also take into account the dangers of continuing to act for the current client where the other party has objected to them doing so and there are clear disputes of fact affecting their entitlement to act. Apart from ethical duties under r 31 and any issues of confidential information, a lawyer may owe certain fiduciary duties to the prospective client under the general law.11 Such a duty could arise from the lawyer having given certain information to the prospective client on which a reasonable person may rely, such as Lawyer A's explanation of the difference between contested and uncontested proceedings. Notwithstanding that the prospective client does not appear eventually to have relied on the lawyer's information and although the exact scope of any such fiduciary duties will depend on the precise findings of fact which may be made by the court or other tribunal, the mere existence of such duties may lead the court or other tribunal to restrain the lawyer from acting for the current client even where there is no breach of the ethical duty under r 31.
Conclusion
A lawyer may owe a prospective client both ethical and fiduciary duties, even if the consultation is brief and the lawyer is not subsequently retained or engaged. Further, the scope of these ethical and fiduciary duties may be different. When considering acting against a prospective client, members should be aware of whether the situation under consideration concerns disqualification of the individual solicitor (r 31(1)) or the law practice (r 31(4)). So, hold on to this article. The next time a prospective client knocks on your door, you may just need it.
Ethics Committee
The Law Society of Singapore
Notes
1 Cap. 161, 2001 Ed. [LPA].
2 Cap. 1, 2002 Ed. [IA].
3 Law Society of Singapore v. Seah Li Ming Edwin and Another [2007] 3 SLR 401 at 409, para. 24 [Seah Li Ming Edwin].
4 Popowich v. Saskatchewan et al (195) 132 Sask. R. 48 at para. 19.
5 Supra, note 3.
6 [1988] SLR 1037 [Turner].
7 Ibid. 1042F.
8 The Law of Advocates and Solicitors in Singapore and West Malaysia (Second Edition, 1998) at 135.
9 Section 35(1) of the LPA
10 Yasho Dhoraisingam & Sivakumar Murugaiyan, "Understanding the Recent Amendments to the Professional Conduct and Publicity Rules" (2001) Singapore Law Gazette, online: Singapore Law Gazette <www.lawgazette.com.sg/2001-12/Dec01-focus.htm>.
11 See Law Society of Singapore v. Ahmad Khalis
bin Abdul Ghani [2006] 4 SLR 308 at 325, para. 38.