Ethics Ruling Number
R5026
Area of Law
Commercial
Category
Conflict of Interest
Ethics Ruling Date
16/05/2024
Ethics Pub Date
12/06/2024
Ethics Background
Firm A are seeking guidance from the Ethics Committee regarding the course they should adopt in relation to a potential conflict of interest. In brief, Firm A act for the borrower/guarantor in a commercial transaction and Firm B act for the lender. As part of the transaction, Firm B are requesting Firm A to sign a Corporate Information Form, stating that they appoint the solicitor acting for the borrower (Firm A) on the proposed loan as the ‘limited agent’ for the purpose of undertaking customer identification verification in accordance with Firm B’s AML / CTF Program (anti-money laundering and counter-terrorism financing). Firm A have declined to sign the form as they believe that they have a conflict of interest in acting for both the borrower/guarantor and the lender. Firm B believe there is no conflict of interest and as such Firm A are seeking a ruling of the Ethics Committee in relation to the following matters: 1. Does a Lender appointing a solicitor acting for the borrower/guarantor to act as the Lender’s agent (in any capacity) give rise to be a conflict of interest; and 2. Does a Lender requesting a solicitor to sign forms in their capacity as a solicitor, in addition to the LIV Australia Legal Practitioner’s Certificates, breach Rule 11 of the Legal Profession Uniform Legal Practice (Solicitors) Rules 2015 (the Solicitors Rules) on the basis the forms are additional evidence and not in the form required by that Rule.
Ruling
In the opinion of the Ethics Committee and on the information presented: 1. Firm A would have a conflict of interest and cannot act as agent for the Lender in any capacity. 2. Firm B should consider obtaining the information requested in the corporate information form in another lawful manner and should consider the ramifications of Rule 11.8 of the Solicitors Rules if they did “aid, abet, counsel or procure any other solicitor to provide evidence otherwise than in conformity with this rule”, which includes deviating from the use of the forms required in this Rule

Law Institute of Victoria
Ethics Committee of Law Institute of Victoria Ltd
Legal Ethics Manager
Phone: 03 9607 9336
Email: ethics@liv.asn.au

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