December 3, 2004

You are a recently qualified solicitor working in the conveyancing department of Chanters Welsey, Solicitors. The senior partner asks you to deal with a new matter for some longstanding clients of the firm, Mr and Mrs Thorpe. Later that day, you have an initial telephone conversation with Mrs Thorpe. She informs you of the following:

Mr and Mrs Thorpe are both in their early-fifties and have three teenage children. The Thorpes are concerned that Mrs Thorpe's elderly mother, Mrs Crabtree, is finding it increasingly difficult to care for herself due to ill-health and infirmity, especially since the recent death of her husband who used to care for her. Other family members have suggested that it would be best for Mrs Crabtree that she move into a residential care home where she could receive full-time care, but the Thorpes cannot countenance such a prospect. The plan is therefore for Mrs Crabtree to sell her house, for the Thorpes to sell their house, and with the combined proceeds of sale to buy a new and larger house which will include self-contained accommodation for Mrs Crabtree. There is no outstanding mortgage on Mrs Crabtree's house. There is a sizeable mortgage on the Thorpe's house which will be transferred to the new property. Mrs Crabtree is very happy with these plans and wants your firm to act for her as well. However, since she is infirm and does not understand these sort of matters very well, she wants the Thorpes to deal with all matters for her. The Thorpes are coming in to the office to see you for interview tomorrow.

Explain any problems of professional conduct that arise.

Total Marks 13

Answer
Question 1

The basic principle is that a solicitor should not accept instructions to act for two or more clients in the same transaction when there is a conflict or a significant risk of conflict between the interests of those clients

Here, the parties are not buying from or selling to each other, so Practice Rule 6 and the exception for 'not at arm's length' transactions is not applicable  

The proposal is that we act for joint buyers and as such we are under a duty to act in the best interests of both clients

Even if there appears to be no actual conflict of interest, to discharge our professional duties to Mrs Crabtree, we would need to advise her in relation to a number of matters which could give rise to a potential conflict of interest with the interests of the Thorpes

For example, as to the amount of her contribution to the new property, how her share is to be held legally, her position should the Thorpes default on the mortgage

Further, we are under a duty to pass on to the client and use all information which is material to the client's business regardless of the source of that information

And are also under a duty to keep confidential all our clients' affairs

Another conflict of interest may arise between the duty of disclosure to one client and the duty of confidentiality to the other if either party were to reveal to you information which prejudices or might prejudice the other (for instance, information about the Thorpes' financial affairs/ability to pay the mortgage) These potential conflicts should be explained to the Thorpes and they should be advised that Mrs Crabtree should instruct other solicitors for independent legal advice.

Even if Mrs Crabtree were to accept the position, having had explained to her the problems and the risks that may arise, we should decline to act for her since in addition to the issues raised above, Mrs Crabtree's relationship with the Thorpes, in particular her possible dependence upon them, her age and lack of understanding, gives rise to a heightened risk of undue influence and also means that the risk of conflict of interest would probably be regarded as significant