Conflict of interest in a regular

lawyer-client relationship
Problem Areas in Legal Ethics
Arellano University School of Law Arellano Law Foundation

2015-2016

COI is everywhere
Conflicts of interest are not the exclusive headache of large,
urban, multi-office law firms. Conflicts of interest arise within
and affect law practices of every size, geographical location
and discipline. The number of clients, adverse parties, and
interested non-parties with whom attorneys become involved
throughout their careers is truly staggering and invariably
underestimated.

Extreme case of Conflict of Interest

The most obvious conflicts of interest are those in which the
lawyer's personal interests clash with those of the client.

Rule on Conflicting Interests

It is generally the rule based on sound public policy that
attorney cannot represent diverse interest. It is highly improper
to represent both sides of an issue.

Competitor Conflicts
Courts have found that a competitor conflict is present when
the lawyer attempts to represent two competitors on a
material aspect of their competition.

Whose interest?
It is, of course, a hornbook proposition that it is the client, and
not the lawyer, that defines the client's interests and instructs
the lawyer about them.

Degree of involvement
The greater the involvement in the client's affairs the greater the
danger that confidences (where such exist) will be revealed.

Closed file conflicts

Involve representation adverse to a former client in the same or
substantially related matters.

Absolute prohibition from

representation
Hornilla case provides an absolute prohibition from
representation with respect to opposing parties in the
same case.
In other words, a lawyer cannot change his
representation from one party to the latter's opponent
in the same case, as in this case. Tulio v. Atty.
Buhangin, A.C. No. 7110, April 20, 2016

Doctrine of imputed knowledge

Doctrine of imputed knowledge is based on the assumption that
an attorney, who has notice of matter affecting his client, has
communicated the same to his principal in the course of
professional dealings. The doctrine applies regardless of whether
or not the lawyer actually communicated to the client what he
learned in his professional capacity, the attorney and his client
being one judicial person.
Knowledge of one member of a law firm will be imputed by
inference to all members of that firm; free flow of information
within the partnership.

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Preliminary conflict of interest check

Whenever a prospective client seeking legal assistance contacts
an attorney, the attorney should politely but firmly decline to
discuss the matter in detail until a preliminary conflict of
interest check can be performed.
As the adjective suggests, preliminary conflict of interest
checks should ideally be performed before the prospective
client divulges additional confidential information which may
conflict the attorney out of current or future representations.
Rule 15.01. - A lawyer, in conferring with a prospective client,
shall ascertain as soon as practicable whether the matter would
involve a conflict with another client or his own interest, and if
so, shall forthwith inform the prospective client.

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CANON 21 - A lawyer shall preserve the confidence

and secrets of his client even after the attorney-client
relation is terminated
Rule 21.02 - A lawyer shall not, to the disadvantage of his client,
use information acquired in the course of employment, nor shall
he use the same to his own advantage or that of a third person,
unless the client with full knowledge of the circumstances consents
thereto.
Rule 21.07 - A lawyer shall not reveal that he has been consulted
about a particular case except to avoid possible conflict of
interest.

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General Rule in a law firm

Rule 21.04 - A lawyer may disclose the affairs of a client of
the firm to partners or associates thereof unless prohibited by
the client.

An information obtained from a client by a member or assistant

of a law firm is information imparted to the firm. This is not a
mere fiction or an arbitrary rule; for such member or assistant,
as in our case, not only acts in the name and interest of the
firm, but his information, by the nature of his connection with
the firm is available to his associates or employers. Hilado v.

David, et. Al., G.R. No. L-961, September 21, 1949

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CANON 15 - A lawyer shall observe candor, fairness

and loyalty in all his dealings and transactions with
his clients
Rule 15.01. - A lawyer, in conferring with a prospective client,
shall ascertain as soon as practicable whether the matter would
involve a conflict with another client or his own interest, and if
so, shall forthwith inform the prospective client.
Rule 15.03. - A lawyer shall not represent conflicting interests
except by written consent of all concerned given after a full
disclosure of the facts.
Rule 15.04. - A lawyer may, with the written consent of all
concerned, act as mediator, conciliator or arbitrator in settling
disputes.
Rule 15.05. - A lawyer when advising his client, shall give a
candid and honest opinion on the merits and probable results
of the client's case, neither overstating nor understating the
prospects of the case.
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 Rule 15.08. - A lawyer who is engaged in another profession or

occupation concurrently with the practice of law shall make
clear to his client whether he is acting as a lawyer or in another
capacity.

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Confidentiality of information is not

relevant in COI
The rule on conflict of interests covers not only cases in which
confidential communications have been confided but also those
in which no confidence has been bestowed or will be used. -

Atty. Jalandoni v. Atty. Villarosa, AC 5303, June 15, 2006

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Unqualified opposing interest of new

and former clients
The rule prohibits a lawyer from representing new clients whose
interests oppose those of a former client in any manner,
whether or not they are parties in the same action or in totally
unrelated cases. - Atty. Jalandoni v. Atty. Villarosa, AC 5303,

June 15, 2006

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 Another test of the inconsistency of interests is whether the acceptance of

a new relation will prevent an attorney from the full discharge of his duty
of undivided fidelity and loyalty to his client or invite suspicion of
unfaithfulness or double-dealing in the performance thereof, and also
whether he will be called upon in his new relation to use against his first
client any knowledge acquire in the previous employment.
The first part of the rule refers to cases in which the opposing parties are
present clients either in the same action or in a totally unrelated case;
the second part pertains to those in which the adverse party against
whom the attorney appears is his former client in a matter which is
related, directly or indirectly, to the present controversy. - Atty. Jalandoni

v. Atty. Villarosa, AC 5303, June 15, 2006

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Counsel of corporation cannot represent

members of board of directors
After due deliberation on the wisdom of this doctrine, we are
sufficiently convinced that a lawyer engaged as counsel for a
corporation cannot represent members of the same
corporations board of directors in a derivative suit brought
against them. To do so would be tantamount to representing
conflicting interests, which is prohibited by the Code of
Professional Responsibility.(Hornilla v. Atty. Salunat, A.C. No.
5804, July 1, 2003)

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Degree of adverse interest, intention or

motive are not material
An attorney owes to his client undivided allegiance. After being
retained and receiving the confidences of the client, he cannot,
without the free and intelligent consent of his client, act both
for his client and for one whose interest is adverse to, or
conflicting with that of his client in the same general matter.
The prohibition stands even if the adverse interest is very
slight; neither is it material that the intention and motive of
the attorney may have been honest- Lim Jr. v. Atty. Villarosa, A.C.

No. 5303, June 15, 2006

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As to who initiate engagement

is immaterial
To negate any culpability, respondent explained that he did not
offer his legal services to accused Avila and Ilo but it was the
two accused who sought his assistance in executing their
extrajudicial confessions. Nonetheless, he acceded to their
request to act as counsel after apprising them of their
constitutional rights and after being convinced that the accused
were under no compulsion to give their confession. - Perez v.

Atty. Dela Torre, AC 6160, March 30, 2006

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Retained counsel of either party cannot act

as mediator without consent
Even respondents alleged effort to settle the existing
controversy among the family members was improper because
the written consent of all concerned was still required. A
lawyer who acts as such in settling a dispute cannot
represent any of the parties to it. - Lim Jr. v. Atty. Villarosa, A.C.

No. 5303, June 15, 2006

Rule 15.04. - A lawyer may, with the written consent of all

concerned, act as mediator, conciliator or arbitrator in settling
disputes.

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Nature of the case is irrelevant

The claim of respondent that there is no conflict of interests in
this case, as the civil case handled by their law firm where
Gonzales is the complainant and the criminal cases filed by
Gonzales against the Gatcheco spouses are not related, has no
merit. The representation of opposing clients in said cases,
though unrelated, constitutes conflict of interests or, at the very
least, invites suspicion of double-dealing which this Court
cannot allow. - Gonzales v. Atty. Cabucana, A.C. No. 6836,

January 23, 2006

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Dismissed employee and counsel of

record incompatible
In the instant case, quite apart from the issue of validity of the 1990
compromise agreement, this Court finds fault in respondent's omission
of that basic sense of fidelity to steer clear of situations that put his
loyalty and devotion to his client, the faculty members of UST, open to
question. Atty. Mario both as lawyer and president of the union
was duty bound to protect and advance the interest of union
members and the bargaining unit above his own. This obligation was
jeopardized when his personal interest as one of the dismissed
employees of UST complicated the negotiation process and eventually
resulted in the lopsided compromise agreement that rightly or wrongly
brought money to him and the other dismissed union officers and
directors, seemingly or otherwise at the expense of the faculty
members. - Dr. Gamilla et. al. v. Atty. Mario Jr., A.C. No. 4763, March

20, 2003

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Client of law firm is the client of every

partners and associates
Respondent further argued that it was his brother who represented
Gonzales in the civil case and not him, thus, there could be no
conflict of interests. We do not agree. As respondent admitted, it
was their law firm which represented Gonzales in the civil case.
Such being the case, the rule against representing conflicting
interests applies. - Gonzales v. Atty. Cabucana, A.C. No. 6836,

January 23, 2006

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Vicarious disqualification
Traditionally, if a lawyer is ineligible to represent a particular
client, all members of the lawyer's firm also are ineligible.
The basis for vicarious disqualification is the "presumption of
shared confidences," which seeks to prevent disclosure of client
confidences, preserve counsel loyalty, and avoid the appearance
of impropriety.

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Professional engagement starts the moment

the lawyer listens to his prospective client
An attorney is employed that is, he is engaged in his
professional capacity as a lawyer or counselor when he is
listening to his client s preliminary statement of his case, or
when he is giving advice thereon, just as truly as when he is
drawing his client s pleadings, or advocating his client s
pleadings, or advocating his client s cause in open court. - Atty.

Catalan v. Atty. Silvosa A.C. No. 7360 [2012]

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Good faith is not a defense

Indeed, the prohibition against representation of conflicting
interests applies although the attorneys intentions were honest
and he acted in good faith. - Atty. Catalan v. Atty. Silvosa A.C.

No. 7360 [2012]

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Consent ineffective
A lawyer may not properly represent conflicting interests even
though the parties concerned agree to the dual representation
where:
1. the conflict is between the attorneys interest and that of a
client, or
2. between a private clients interests and that of the government
or any of its instrumentalities.
3. between an accused and counsel.
Section 12. (Article III of the Constitution)
(1) Any person under investigation for the commission of an offense shall
have the right to be informed of his right to remain silent and to have
competent and independent counsel preferably of his own choice. If the
person cannot afford the services of counsel, he must be provided with one.
These rights cannot be waived except in writing and in the presence of
counsel.

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Three tests to determine conflicting

interests
The first is when, on behalf of one client, it is the attorneys duty
to contest for that which his duty to another client requires him
to oppose or when this possibility of such situation will develop
(conflicting duties).

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 The second test is whether the acceptance of the new relation

will prevent a lawyer from the full discharge of his duty of
undivided fidelity and loyalty to his client or will invite suspicion
of unfaithfulness or double-dealing in the performance thereof
(Invitation of suspicion).

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 The third test is whether a lawyer will be called upon in his new
relation to use against the first client any knowledge acquired in
the previous employment (use of prior knowledge obtained).
Representing conflicting interests would occur only where the
attorneys new engagement would require her to use against a
former client any confidential information gained from the
previous professional relation.
The prohibition did not cover a situation where the subject
matter of the present engagement was totally unrelated to the
previous engagement of the attorney.
- Seares, Jr. v. Atty. Gonzales-Alzate, Adm. Case No. 9058

November 14, 2012

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 Remember: The test to determine whether there is a conflict of

interest in the representation is PROBABILITY, not certainty of
conflict.
It is of no moment that the lawyer would not be called upon to contend
for one client that which the lawyer has to oppose for the other client, or
that there would be no occasion to use the confidential information
acquired from one to the disadvantage of the other as the two actions are
wholly unrelated. It is enough that the opposing parties in one case,
one of whom would lose the suit, are present clients and the nature or
conditions of the lawyers respective retainers with each of them would
affect the performance of the duty of undivided fidelity to both clients. -

Quiambao v. Atty. Bamba, Adm. Case No. 6708 August 25, 2005

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Effects of Representing Adverse Interests

1. Disqualification as counsel of new client on petition of
former client.
2. Where such is unknown to, becomes prejudicial interests of
the new client, a judgment against such may, on that ground be
set aside.
3. A lawyer can be held administratively liable through
disciplinary action and may be held criminally liable for betrayal
of trust.
4. The attorneys right to fees may be defeated if found to be
related to such conflict and such was objected to by the former
client, or if there was a concealment and prejudice by reason of
the attorneys previous professional relationship with the opposite
party.

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What are the types of conflict of interest?

1. Concurrent or multiple or simultaneous representation:

A lawyer represents clients whose objectives are adverse to each other, no
matter how slight or remote these are
Take note of this minimal degree
Ex. A CPA-lawyer being part of a firm that represents the estate and being
part of the accountancy firm that represents the creditors. The conflict need
not arise from two legal relationships.
2. Sequential or successive representation:
Representation of present client who may have an interest adverse to prior
client.

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 Successive representation - when a lawyer or law firm seeks to

represent a client whose interests are adverse to a former client
without the former client's consent. The rule against simultaneous
representation is based principally on the duty of undivided
loyalty.
Unlike simultaneous representation, successive representation is
not prima facie improper. The duty to preserve client confidences
is the primary ethical consideration implicated by successive
representation.
Successive representation implicates both the duty of loyalty and
the preservation of the attorney-client relationship.

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Suspicion of Double-dealing even if the case is

unrelated
We do not sustain respondents theory that since the ejectment
case and the replevin case are unrelated cases fraught with
different issues, parties, and subject matters, the prohibition is
inapplicable. His representation of opposing clients in both
cases, though unrelated, obviously constitutes conflict of
interest or, at the least, invites suspicion of double-dealing. -

Quiambao v. Atty. Bamba, Adm. Case No. 6708 August 25, 2005

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Does the lawyer have to be the counsel-ofrecord for the other party to violate this
provision?
To be guilty of representing conflicting interests, a counsel-of-record
of one party need not also be counsel-of-record of the adverse
party. He does not have to publicly hold himself as the counsel of
the adverse party, nor make his efforts to advance the adverse
partys conflicting interests of record--- although these
circumstances are the most obvious and satisfactory proof of the
charge. It is enough that the counsel of one party had a hand in
the preparation of the pleading of the other party, claiming
adverse and conflicting interests with that of his original client. To
require that he also be counsel-of-record of the adverse party
would punish only the most obvious form of deceit and reward,
with impunity, the highest form of disloyalty. Artezuela v. Atty.

Maderazo, A.C. No. 4354. April 22, 2002

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Only instance when a lawyer can

represent conflicting interest
A lawyer cannot represent conflicting interests except by
written consent of all concerned given after a full disclosure of
the facts. Santos Ventura Hocorma Foundation, Inc. v. Atty.

Funk, A.C. No. 9094

August 15, 2012

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Limit of full disclosure

A lawyer is forbidden from representing a subsequent client against
a former client when the subject matter of the present controversy is
related, directly or indirectly, to the subject matter of the previous
litigation in which he appeared for the former client. Conversely, he
may properly act as counsel for a new client, with full disclosure to the
latter, against a former client in a matter wholly unrelated to that of
the previous employment, there being in that instance no conflict of
interests.
Where, however, the subject matter of the present suit between the
lawyers new client and his former client is in some way connected
with that of the former clients action, the lawyer may have to
contend for his new client that which he previously opposed as counsel
for the former client or to use against the latter information confided
to him as his counsel. - Pormento, Sr. v. Atty. Pontevedra, A.C. No. 5128.

March 31, 2005

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Purpose and intention is immaterial

Respondent contends that he handled the defense of the
accused in the subject criminal case for humanitarian reasons
and with the honest belief that there exists no conflict of
interests. However, the rule is settled that the prohibition
against representation of conflicting interests applies although
the attorneys intentions and motives were honest and he
acted in good faith. Moreover, the fact that the conflict of
interests is remote or merely probable does not make the
prohibition inoperative. - Pormento, Sr. v. Atty. Pontevedra, A.C.

No. 5128. March 31, 2005

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Termination of A-C relations is not a

justification
Respondent also asserts that when he accepted employment in
Criminal Case No. 3159, the attorney-client relations between
him and complainant in Civil Case No. 1648 had already been
terminated. This defense does not hold water because the
termination of the relation of attorney and client provides no
justification for a lawyer to represent an interest adverse to
or in conflict with that of the former client. Pormento, Sr. v.

Atty. Pontevedra, A.C. No. 5128. March 31, 2005

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Acquired knowledge of former clients

doings is indelible
The reason for this is that a lawyer acquires knowledge of his
former client's doings, whether documented or not, that he
would ordinarily not have acquired were it not for the trust
and confidence that his client placed on him in the light of
their relationship. It would simply be impossible for the lawyer
to identify and erase such entrusted knowledge with faultless
precision or lock the same into an iron box when suing the
former client on behalf of a new one. - Santos Ventura Hocorma

Foundation, Inc. v. Atty. Funk, A.C. No. 9094 August 15, 2012

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Good faith and honest intention is not a

defense
That the representation of conflicting interest is in good faith
and with honest intention on the part of the lawyer does not
make the prohibition inoperative. - Quiambao v. Atty. Bamba,

Adm. Case No. 6708 August 25, 2005

Although there are instances where lawyers cannot decline

representation, they cannot be made to labor under conflict of
interest between a present client and a prospective one.

Quiambao v. Atty. Bamba, Adm. Case No. 6708 August 25, 2005

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The prohibition against conflict of interest rests on

five rationales, rendered as follows:
x x x. First, the law seeks to assure clients that their lawyers will
represent them with undivided loyalty. A client is entitled to be
represented by a lawyer whom the client can trust. Instilling
such confidence is an objective important in itself. x x x.
Second, the prohibition against conflicts of interest seeks to
enhance the effectiveness of legal representation. To the extent
that a conflict of interest undermines the independence of the
lawyers professional judgment or inhibits a lawyer from working
with appropriate vigor in the clients behalf, the clients
expectation of effective representation x x x could be
compromised. - Samson v. Atty. Era, A.C. No. 6664 July 16, 2013

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Cont
Third, a client has a legal right to have the lawyer safeguard the clients
confidential information xxx.1wphi1 Preventing use of confidential client
information against the interests of the client, either to benefit the lawyers
personal interest, in aid of some other client, or to foster an assumed
public purpose is facilitated through conflicts rules that reduce the
opportunity for such abuse.
Fourth, conflicts rules help ensure that lawyers will not exploit clients, such
as by inducing a client to make a gift to the lawyer xxx.
Finally, some conflict-of-interest rules protect interests of the legal system
in obtaining adequate presentations to tribunals. In the absence of such
rules, for example, a lawyer might appear on both sides of the litigation,
complicating the process of taking proof and compromise adversary
argumentation x x x. - Samson v. Atty. Era, A.C. No. 6664 July 16, 2013

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Informed consent must be written

A client's implied consent is insufficient to waive a potential
conflict of interest.
Rule 15.03. - A lawyer shall not represent conflicting interests
except by written consent of all concerned given after a full
disclosure of the facts.
While the respondent may assert that the complainant expressly
consented to his continued representation in the ejectment
case, the respondent failed to show that he fully disclosed the
facts to both his clients and he failed to present any written
consent of the complainant and AIB as required under Rule
15.03, Canon 15 of the Code of Professional Responsibility. -

Quiambao v. Atty. Bamba, Adm. Case No. 6708 August 25, 2005

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COI remains after termination of

attorney-client relationship
The termination of the attorney-client relationship does not justify
a lawyer to represent an interest adverse to or in conflict with that
of the former client. The spirit behind this rule is that the clients
confidence once given should not be stripped by the mere
expiration of the professional employment. Even after the
severance of the relation, a lawyer should not do anything that will
injuriously affect his former client in any matter in which the lawyer
previously represented the client. Samson v. Atty. Era, A.C. No.

6664 July 16, 2013

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Current observations husband and wife

lawyers in legal practice
Where both husband and wife are lawyers but they are not
practicing in association with one another, may they or their firms
represent differing interests?
Some firms apparently have been reluctant to employ one spouselawyer where that person's husband or wife is, or may soon be,
practicing with another firm in the same city or area.
Some law firms are concerned whether a law firm is disqualified, by
reason of its employment of one spouse, to represent a client
opposing an interest represented by another law firm that employs
the husband or wife of the inquiring firm's associate.

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Cont
It is not necessarily improper for husband-and-wife lawyers who
are practicing in different offices or firms to represent differing
interests. No disciplinary rule expressly requires a lawyer to
decline employment if a husband, wife, son, daughter, brother,
father, or other close relative represents the opposing party in
negotiation or litigation.
Likewise, it is not necessarily improper for a law firm having a
married partner or associate to represent clients whose interests
are opposed to those of other clients represented by another
law firm with which the married lawyer's spouse is associated as
a lawyer.

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Cont
Married partners who are lawyers must guard carefully at all
times against inadvertent violations of their professional
responsibilities arising by reason of the marital relationship.
The disqualification of married or related lawyers who oppose
one another professionally is not generally imputed to other
lawyers in the related lawyer's law offices.
Such personal disqualification is not imputed to the spouses'
firms unless the lawyers have a personal interest in the outcome
of the case.

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Special circumstances that

highlight the concern
1. whether the fee of either firm is contingent,
2. whether the disputed matter is one of negotiation or litigation,
and whether the married lawyer in question will or will not
actually be working on the particular matter.
3. Another variation of the problem is the situation in which a
governmental agency, such as a district attorney or an
attorney general, is the employer of either the husband or
the wife, and the spouse is associated with a law firm in the
same community.

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Concerns about husband & wife

lawyers
Yet it also must be recognized that the relationship of husband
and wife is so close that the possibility of an inadvertent
breach of a confidence or the unavoidable receipt of
information concerning the client by the spouse other than the
one who represents the client (for example, information
contained in a telephoned message left for the lawyer at home)
is substantial. Because of the closeness of the husband-andwife relationship, a lawyer who is married to a lawyer must be
particularly careful.

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Recommendations
Married partners who are lawyers must guard carefully at all
times against inadvertent violations of their professional
responsibilities arising by reason of the marital relationship.

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Lawyer Relatives
Ethical precepts admonish lawyers related by blood or marriage
to avoid adversarial representations without the informed
consent of the parties.
Lawyers related by blood or marriage have long been permitted
to represent adversarial interests provided that a reasonable
effort is made to anticipate and expose potential conflicts to
clients before obtaining their consent to representation.
Faced with client consent, courts have consistently required an
actual conflict of interest rather than simply the fact of
adversarial lawyer relatives before ordering disqualification.

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Personal Relationships
A lawyer is romantically involved with the opposing partys
attorney, or sexually involved with a client, the lawyers loyalty or
judgment can be impaired.
Lawyers who are dating and also representing adversaries in
litigation should disclose their relationship if it is sufficiently
close that their clients might have questions about the lawyers'
ability to represent them zealously.
Lawyers who are otherwise personally close should do likewise.
The lawyer had enjoyed an "intimate physical relationship" with
the secretary and talked with her "about significant aspects of
the case," for which he was disqualified.
A lawyer is prohibited from having sex with a client unless a
consensual sexual relationship existed prior to the start of
professional representation.
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Duty to protect only matters acquired

during the lawyer-client relationship
The intent of the law is to impose upon the lawyer the duty to
protect the clients interests only on matters that he previously
handled for the former client and not for matters that arose after
the lawyer-client relationship has terminated. Palm v. Atty. Iledan,

Jr. A.C. No. 8242 [2009]

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Thank you for your attention!!

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