Risk management

Be alert to conflicts of interestDoes your firm have a system in place for checking whether there is any conflict of interest when instructed by a client? If so, is it used every time someone in the firm enters into a retainer, whether or not it is a new client?Some conflicts may be obvious; for example, if you are approached by both parties in a dispute.

But remember that in conveyancing matters, you cannot normally act for both vendor and purchaser unless they fall within one of the exceptions noted in Law Society practice rule 6.

Solicitors should:l Check carefully that one of these exceptions applies;l Make a file note to record that the point was considered, and the reasons for your decision;l Ensure that the clients have been informed of the rule and the reason why you believe that you are able to act in this case, and;l Get both the clients to confirm their consent in writing.Don't forget that, although there may be no apparent conflict at the outset of the instructions, one may develop as the matter progresses.

It is essential to be alert to the risk of any potential conflict of interest, and to act swiftly if one becomes apparent.What if, for example, you are instructed on behalf of a partnership in relation to a contractual dispute, and the defendant then alleges that one of the partners agreed to terms that were different from those on which you have been instructed? If a partnership dispute is emerging, can you continue to act?Be sure that you know who your client is - there are particular dangers in dealing with any matter in which the other party is not represented by a solicitor.

Be especially careful that you do not appear to be giving the other party advice, and that he or she understands that you are acting in the interests of your client.

Landlord and tenant is one such danger area.

So is probate - although you are instructed by the executors, you have certain duties to the beneficiaries.Beware also of the client who has instructed another member of your firm in a related matter, but who does not inform you of this.

Perhaps the most extreme example was the client who was seeking damages following a road accident, and who told his solicitors that he had lost his employment as a result of the injuries he received.It was some time later, and only by the chance misdirection of post, that his solicitor discovered that he had also instructed the firm's criminal litigation department.

You guessed it - he had actually been dismissed for providing false references, not because of the road accident, and was seeking advice on the consequent criminal charges.All of the above risks can be avoided by having - and using - systems which identify clients clearly, and which show all matters on which they have instructed your firm.l This column was prepared by the St.

Paul risk management team