Legal Profession

• Author: TAN Yock Lin BSc (London), Dip Econ Devt, BA, BCL (Oxford); Professor, Faculty of Law, National University of Singapore.
• Published date: 01 December 2005
• Date: 01 December 2005

Introduction

18.1 Of the two conflict of interests/professional negligence cases which were reported in the law reports in 2005, the first grappled with the question of whether an advocate and solicitor can owe a duty of care after his retainer has terminated. It is this reviewer”s view that the case should not be read as suggesting that the lawyer”s obligations in equity or tort arising out of or in connection with his client”s retainer cease with termination of the retainer. The second case adds another illustration of the perils of common or multiple representations. Though this is not prohibited, no small number of judges have warned against it. Certainly, the advocate and solicitor should not embark on such a course without ensuring that he understands fully the nature of the actual duties and risks which the representation entails and anticipating those that could arise in the course of it. Two other cases alert us that fiduciary duties are not the only duties that the advocate and solicitor should take seriously. By virtue of his unique role as his client”s representative in the administration of justice, the advocate and solicitor owes overriding and absolute duties to the court; so that even if he is almost, yet he is not altogether, his client”s alter ego. In these two cases, this needed to be reiterated. One of them was also referred by the trial judge to the Attorney-General for disciplinary action to be taken, while the other was already a disciplinary case. Another two cases dealt with the remuneration of an advocate and solicitor. The advocate and solicitor”s freedom to contract for the price of his services is heavily circumscribed for the sake of the presumptively vulnerable client, who is entitled to tax the costs of the legal services which he has received and to subject his agreement with his solicitor as to remuneration, if there is one, to a degree of scrutiny not typical of other professional service agreements. In these two cases, there were varying indications of the stringency with which the courts scrutinise such agreements.

Conflict of interests

18.2 In Alfons Tanumihardja v Thio Su Mien[2005] 2 SLR 445, the defendant firm of advocates and solicitors represented the RHB Bank which was suing the plaintiff on a guarantee he had provided in 1996 in order to

secure the grant of a loan by the bank to a company of which he was then director. The defendant had represented the plaintiff in 1996 when he gave the guarantee to the Bank. After giving the guarantee, the plaintiff was in active dispute with certain shareholders of the company, which dispute was eventually settled in accordance with a settlement deed (drawn up also in 1996 by the defendant as the plaintiff”s solicitors). The deed stated that Tradexim as agent for those shareholders undertook to procure the release of the plaintiff from his obligations under the guarantee and that those shareholders agreed to pay the plaintiff a specified sum in instalments if certain conditions were fulfilled. (The judgment did not mention the details of these conditions.)

18.3 Against this background, when the plaintiff was served the letter of demand in 2000, he immediately contacted the defendant and was told that as the firm was representing the bank, it could not act for him in defending the suit. The plaintiff was advised to obtain independent legal advice and no reference was made to the deed of settlement at this time. When the plaintiff was eventually represented by an advocate and solicitor, his rights under the settlement deed had become statute-barred. Under the advice of his advocate and solicitor, the plaintiff finally admitted liability under the guarantee.

18.4 In these proceedings, the plaintiff alleged that the defendant was negligent in not advising him on the effect of the deed of settlement in 2000.

18.5 Absolving the firm of liability, Choo Han Teck J held (at [7]—[10]) that the defendant did not owe the plaintiff a duty to advise him on the effect of the deed, and that, in any case, the defendant could not have advised the plaintiff on the effect of the deed since it would have been in breach of its retainer from the bank. Choo J further held (at [11]) that the plaintiff had only himself to blame for the rights under the deed of settlement becoming statute-barred, as he had all along been aware of the existence of the deed of settlement and of his rights under the deed but nevertheless chose not to assert those rights until it was too late to do so.

18.6 It is interesting to note that when the plaintiff learnt that the bank was being represented by the defendant, he did not seek to restrain the defendant from acting against him, a former client, according to the principle laid down in Seet Melvin v The Law Society of Singapore[1995] 2 SLR 323 or Bolkiah v KPMG[1999] 2 AC 222 (‘Bolkiah”s case’). The latter case especially dispelled previous misunderstandings about the nature of the principle, clarifying that it is not based on balancing interests, but on protecting the former client against the risk of disclosure of confidential information

obtained in the course of the former representation. As the defendant had acted for the plaintiff in the settlement which was to secure his eventual release from the guarantee which he had given to the bank, the risk of disclosure of confidential information relevant to the action brought by the bank would not necessarily be slight or trivial. If the steps required to be taken under the deed to procure the release of the plaintiff from the guarantee had been taken but the bank had brought the action against the plaintiff under the view that those steps had no effect on the bank, it would not be possible to overlook the risk that the representation of the bank by the defendant could lead to disclosure of information relating to the validity or invalidity of the settlement to the bank”s advantage and the plaintiff”s prejudice. Although it was in evidence that the file had been closed, this would not preclude reference being made to the file, which though closed, was apparently not destroyed. Therefore, unless there was cogent evidence that no steps had ever been taken to procure the plaintiff”s release, as required by the deed, the plaintiff would appear to have had a strong case for restraining the representation of the bank by the defendant on the principle laid down in Bolkiah”s case.

18.7 It may not be wrong to conjecture that Choo J found no fault with the defendant”s representation against a former client because the question of breach of duty in equity was not seriously countenanced. The following remarks in the judgment (at [8]) support this supposition:

I accept that the plaintiff”s file with the defendants” firm was in fact closed, otherwise a ‘conflicts’ search within the firm would probably have alerted the defendants to the plaintiff”s retainer, and Tony Yeo [of the defendant firm] would probably have alerted Christopher Chuah [of the defendant firm]. It is important, however, to remember that the closing of a file does not, in itself, terminate a solicitor-client relationship, and the duties and obligations that fall within it. The closure of the file in this case indicated, first, that Tony Yeo had not acted improperly in accepting a brief from the RHB Bank. That is why clients pay annual retainers — so that they would not be sued by their favourite lawyers acting on someone else”s behalf. Secondly, it indicated that Christopher Chuah was of the view that he had no further substantial service to perform for the plaintiff in respect of that file. That impression may not help him if there was evidence that he ought not reasonably to hold that view. [emphasis added]

18.8 In the quoted remarks we are told that the closing of the file was significant in indicating that the defendant firm could act against the former client because the relationship with the latter was over. They seem also to suggest that the negative conflicts search based on closure of file adequately

precluded the prohibition against acting against a former client from barring the defendant”s representation of the bank.

18.9 If the question was one of the ‘no conflict’ duty, the supposition in the remarks would be unquestionable, at least on the weight of current authority. The English courts have increasingly affirmed that the ‘no conflict’ duty ceases when the fiduciary relationship is terminated: see Crown Dilmun v Sutton[2004] 1 BCLC 468.

18.10 However, the duty to maintain the client”s confidence, unlike the ‘no conflict’ duty, may persist and often persists after the termination of the relationship. The decision in Bolkiah”s case (supra para 18.6) already leaves one in no doubt that a solicitor”s duty of confidence can come into its own as a separate obligation which continues despite termination of the solicitor-and-client relationship. Lord Millett in Bolkiah”s case said at 235:

Where the court”s intervention is sought by a former client, however, the position is entirely different. The court”s jurisdiction cannot be based on any conflict of interest, real or perceived, for there is none. The fiduciary relationship which subsists between solicitor and client comes to an end with the termination of the retainer. Thereafter the solicitor has no obligation to defend and advance the interests of his former client. The only duty to the former client which survives the termination of the client relationship is a continuing duty to preserve the confidentiality of information imparted during its subsistence.

18.11 Even generally, the fact that the relationship is over has never been significant so far as liability for abuse of confidence is concerned, as the cases on the in haec re liability of a solicitor for abuse of confidence abundantly demonstrate: see McMaster v Byrne[1952] 1 All ER 1362. Further, Auld LJ in Conway v Ratiu[2005] EWCA Civ 1302 (noted at [2006] 1 All ER 571...