Passing of Accounts and Conflicts of Interest
On a contested passing of accounts, counsel may be requested to represent two or more clients, such as multiple beneficiaries of an estate or co-estate trustees. In such cases, it is critical to ensure that a conflict of interest does not exist. When counsel first meets with potential multiple clients their respective interests may well be perfectly aligned and identical and it may not appear that there is a potential conflict of interest. Further, all consent to the representation of multiple parties.
In the case of multiple executors, in order to avoid a conflict of interest the controversial issues need to be addressed and discussed in detail. For instance, how will executor’s compensation be apportioned as between them? Is there a different relationship between each executor and the beneficiaries? Does one executor disagree with any actions taken by any of the other executors? Will their evidence be the same? Do the executors share the identical expectations of how the litigation should proceed as well as in respect of potential settlement? The potential disagreements can be discovered by exploring the issues up front.
If a conflict arises and the clients are not able to resolve a conflict, counsel may not be able to continue to act for any of them. Pursuant to the Rules of Professional Conduct, if a conflict exists or is likely to exist, clients need to be advised of the consequences of sharing counsel and consent after being informed of those consequences. In certain circumstances where clients wish and consent to having one lawyer represent them despite a conflict of interest, independent legal advice may be needed.
Joint retainer agreements or letters explaining the joint retainer relationship can set out the above issues so that clients and their lawyer are clear on their relationship and the passing of accounts.
Canadian Olympic medal count: 13. Keep watching.
Craig
