CONFLICT OF INTEREST by CF Otieno

@2018-01-18 22:28:54

Disqualification of an advocate, whether automatic.

To understand this we propose to analyse the following;

i. The Evidence Act, Chapter 80 of the Laws of Kenya

ii. The LSK Code of Standards of Professional Practice and Ethical Conduct – June
2016 version

iii. Rule 9 of the Advocates Practice Rules under the Advocates Act, Chapter 16 of the
Laws of Kenya

iv. Rule 3.7 of the Advocate – Witness Rules of New York State

[1] The Evidence Act, Chapter 80 of the Laws of Kenya

Section 134 of the said Act which reads;

[[134. Privilege of advocates

(1) No advocate shall at any time be permitted unless with his client’s express
consent, to disclose any communication made to him in the course and for the
purpose of his employment as such advocate, by or on behalf of his client, or to
state the contents or condition of any document with which he has become
acquainted in the course and for the purpose of his professional employment, or
to disclose any advice given by him to his client in the course and for the purpose
of such employment:

Provided that nothing in this section shall protect from disclosure—

(a) any communication made in furtherance of any illegal purpose;

(b) any fact observed by any advocate in the course of his employment as such,
showing that any crime or fraud has been committed since the commencement
of his employment, ……..
 (2) The protection given by subsection (1) of this section shall continue after the
employment of the advocate has ceased.]]

Explanation:

This Section prohibits disclosure by an advocate of three things;

• any communication made to him by his client

• the contents or condition of any document with which he has become acquainted

• any advice given by him to his client

This restriction is however not absolute and is subject to the two instances as set out in the proviso
to the section.

With these restrictions in mind,the court ought to scrutinize any application by a party to the
proceedings seeking to disqualify opposing counsel as such an application may be a potential vehicle
for abuse and may result in disclosure of confidential information passed between the parties and
their advocates. Consent of the affected advocate’s client is necessary and must be obtained before
the advocate can take the witness stand.

Section 137 of the Evidence Act reads;

[[137. Communications with an advocate

No one shall be compelled to disclose to the court any confidential

communication which has taken place between him and his advocate unless he
offers himself as a witness, in which case he may be compelled to disclose any
such communications as may appear to the court necessary to be known in order
to explain any evidence which he has given, but no others.]]

Our humble view is that this section should be given a broad interpretation to include non –
disclosure by the advocate as well and should be read together with Section 134 of the same Act.

The protection accorded by this section will only subsist upto the point where the client decides to
testify on matters confidential. Should the client elect to testify, his options become limited as the
Court will then be justified to make any order in relation to the evidence that it may deem necessary.

[2] The Law Society of Kenya [LSK] Code of Standards of Professional Practice and Ethical
Conduct – June 2016 version
In this Code under Part IV headed “GUIDANCE ON THE INTERPRETATION OF THE
STANDARDS”,more particularly on the Standard dealing with Conflict of Interest, it may be apt to
examine three paragraphs namely Paragraphs 96, 97 & 99;

Para 96 provides;

[[A conflicting interest is an interest which gives rise to substantial risk that the
Advocate ’s representation of the client will be materially and adversely affected by the
Advocate ’s own interests or by the Advocate ’s duties to another current client, former client
or a third person. ]]

Para 97 provides;

[[Rationale for the Standard :The Advocate ’s ability to represent the client may be
materially and adversely affected unless the Advocate ’s judgment and freedom of
action are as free as possible from compromising influences and the relationship
between the Advocate and the client is not materially impaired by the Advocate acting
against the client in any other matter.]]

finally para 99 provides thus;

[[Situations in which a conflict of interest might arise include:

a. Where the interests of one client are directly adverse to those of another client
being represented by the Advocate or the firm , for instance in situations where
the representation involves the assertion of a claim by one client against another
client;

b. Where the nature or scope of representation of one client will be materially

limited by the Advocate ’s responsibilities to another client, a former client, a
third person or by the personal interests of the Advocate.

c. Where in the course of representing a client there is a risk of using, wittingly or

unwittingly, information obtained from a current or former client to the
disadvantage of that other client or former client.]]

Explanation:
The gist of the aforegoing is that for one to claim that there is a conflict of interest, it must be proved
that,

a. The Advocate ’s representation of the client will be materially and adversely affected by

• the Advocate ’s own interests or

• the Advocate ’s duties to another current client or

• the Advocate ’s duties to a former client or

• the Advocate ’s duties to a third person

b. There is evidence that the Advocate ’s judgment and freedom of action will not be as free as
possible from compromising influences and there is a possibility of bias

c. There is evidence that the relationship between the Advocate and the client will be materially
impaired by the Advocate acting against the client in any other matter.

d. The interests of one client are directly adverse to those of another client being represented
by the Advocate in question or the advocate’s firm.

e. There is a real risk of the advocate using,wittingly or unwittingly, information obtained from
a current or former client to the disadvantage of that other client or former client

[3] Rule 9 of the Advocates Practice Rules under the Advocates Act, Chapter 16 of the Laws of
Kenya

Rule 9 of the Advocates Practice Rules provides;

[[No advocate may appear as such before any court or tribunal in any matter in which
he has reason to believe that he may be required as a witness to give evidence, whether
verbally or by declaration or affidavit; and if, while appearing in any matter, it becomes
apparent that he will be required as a witness to give evidence whether verbally or by
declaration or affidavit, he shall not continue to appear:

Provided that this rule does not prevent an advocate from giving evidence whether
verbally or by declaration or affidavit on formal or non-contentious matter of fact in any
matter in which he acts or appears.]]

Three things stand out in this rule – emphasis ours.

Firstly the Rule uses the word “may” which in our view is not a complete prohibition or bar for an
advocate to act for a client. Any narrow interpretation will open the floodgates for abuse of the Rule
by opportunistic litigants. Had the Rules Committee thought otherwise they could have used the
word “Shall” which would have created a complete bar to representation.

Secondly, the Rule also uses the words “ … in which he has reason to believe …”. This therefore
means that the advocate being instructed must have thought about the case and reflected upon it
before accepting instructions either to prosecute and/ or defend the suit. When taking instructions,
it is to be assumed that the parties to the action would have been disclosed to the advocate as also
the subject matter. At that stage of disclosure it is expected that the advocate would elect whether to
take or accept instructions. An application for the advocate to recuse made thereafter by the
opposing camp should not be handled casually by the Court.

Thirdly, the Rule further uses the words “…while appearing in any matter, it becomes apparent …”.
The Rule seems to have made provision for instances where Counsel may discover much later, or
probably through oversight, that he may be required to testify in a matter or circumstances change
during the proceedings drawing focus on Counsel, then in such instances Counsel may be required
to cease acting. Each case should however be decided on their own merits and their own peculiar
facts.

The Court ought to interrogate further to determine whether the aggrieved applicant’s application
has merit or it is just being made -

• to derail the proceedings one way or the other,

• to defeat justice

• to deliberately deprive the opponent of the services of an advocate of their choice or in other
words is a technical maneuver by the applicant to disqualify the opposing party’s advocate
from representing that party.

• to settle personal scores

• With the aim of abusing the Judicial system or is an opportunistic abuse of Rule 9 by the
applicant
If a party were allowed to take advantage of the Rules to make such applications without laying a
proper basis it would amount to a mockery of the Judicial system. Such abuse of the Court process
should be frowned upon and discouraged.

CASE LAW:

There are several decisions on the subject where the courts have declined to disqualify Counsel from
representing their clients and we now turn to examine some of them.

1. NAIROBI HCCC NO. 570 OF 2011 ( MILIMANI), BRITISH – AMERICAN

INVESTMENTS CO. (K) LTD -Vs.- NJOMAITHA INVESTMENTS LTD &
ANOTHER

The Honourable Court in this case referred to several decisions namely;

In the case of HCCC No 452 of 2007 Sunrise Properties Limited vs National Industrial
Credit Bank & 2 Others (unreported), the court dismissed an application asking a firm of
advocates to disqualify itself on the ground that the applicant therein did not show there was
any advocate/client relationship between it and that firm of advocates or establish
circumstances justifying reasonable apprehension of likelihood of bias.

The Court further stated in the British – American case that;

[[ where a party asserts that conflict of interest exists, he must provide sufficient
evidence to demonstrate that such conflict of interest indeed exists. It is incumbent
upon such party wishing to disqualify an advocate or a firm of advocates from acting
for a particular party to show that it has suffered or will suffer prejudice if such an
advocate or firm of advocates continues to so act for that party. Mere suspicion,
apprehension of a possible conflict of interest or fear of prejudice cannot be a basis
to stop an advocate from acting on behalf of a party]].

It went further to state;

[[Every party has a right to be represented by counsel of his choice. In other words,
he is entitled to his own choice of legal representation as was with the Plaintiff herein.
The court would therefore be very hesitant to come to the conclusion that M/S
……….. Advocates ought to be disqualified from acting in this matter on behalf of the
Plaintiff herein.]]
 The upshot was that the application for disqualification was dismissed with costs.

2. ELDORET E&L CASE NO. 21 OF 2017, SERVE IN LOVE AFRICA (SILA) TRUST -
Vs.- DAVID KIPSANG KIPYEGO & 2 OTHERS AND AMBROSE KIPROP & 4
OTHERS

In this case, the Honourable Mr. Justice A. Ombwayo sitting in Eldoret referred to several
decisions in his Judgment thus;

In the decision of the Court of Appeal in Rakusen vs. Ellis Munday and Clarke (1912) 1 Ch.
831 (1911 -1913) ALL ER Rep 813…Cozens-Hardy MR laid down the test as being that a
court must be satisfied that real mischief and real prejudice will, in all human probability,
result if the solicitor is allowed to act…..As a general rule, the court will not interfere unless
there be a case where mischief is rightly anticipated."

The learned Judge went on to cite other decisions as well, as where O’Kubasu, JA in William
Audi Odode & Another-vs- John Yier & Another, Court of Appeal Civil Application No. NAI
360 of 2004 (KSM33/04) while declining to bar an advocate from acting for some of the parties
in the matter, made his ruling as follows;

[[ I must state on (sic) the outset that it is not the business of the courts to tell litigants
which advocate should and should not act in a particular matter. Indeed, each party to
a litigation has the right to choose his or her own advocate and unless it is shown to a
court of law that the interests of justice would not be served if a particular advocate were
allowed to act in the matter, the parties must be allowed to choose their own counsel.]]

Honourable Mr. Justice A. Ombwayo further stated in his judgment;

‘I believe that the right to legal representation by counsel of one’s choice in civil matters
is implicit in the constitutional provisions with regard to access to justice, particularly
Articles 48, 50 (1) and 159(2) (a) of the Constitution, and it is only in exceptional
circumstances that this right should be taken away’

Honourable Mr. Justice Gikonyo in the case of Dorothy Seyanoi Moschioni v. Andrew Stuart
& another (2014) e KLR, stated;

[[[12] I will not re-invent the wheel. All the cases which have been quoted by counsels
are relevant. I will not multiply them too. What I need to state is that, in applications
for disqualification of a legal counsel, a court of law is not to engage a cursory look at
the argument that “these advocates participated in the drawing and attestation of the
Deeds in dispute’’; as that kind of approach may create false feeling and dilemmas; for
it looks very powerful in appearance and quite attractive that those advocates should be
disqualified from acting in the proceedings. It is even more intuitively convincing when
the applicant say “ I intend to call them as witnesses’’. What the court is supposed to
do is to thrust the essential core of the grounds advanced for disqualification, look at
the real issues in dispute, the facts of the case and place all that on the scale of the
threshold of the law applicable. In the process, courts of law must invariably eliminate
any possibility that the arguments for disqualification may have subordinated important
factual and legal vitalities in the transactions in question while inflating generalized
individual desires to prevent a party from benefiting from a counsel who is supposedly
should be “their counsel’’ in the conveyancing transaction. I say these things because
that kind of feeling is associated with ordinary human sense where both parties in the
suit were involved in the same transaction which was handled by the advocate who now
is acting for one of the parties in a law suit based on the very transaction; and the feeling
is normally expressed in an application for disqualification of the counsel concerned in
the hope it will pass for a serious restriction to legal representation. But the law has set
standards and benchmarks which must be applied in denying a person of legal
representation of choice; the decision must not be oblivious of the centrality of the right
to legal representation in the Constitution as the over-arching hanger; equally, it should
not be removed from reach to the sensitive fiduciary relation between an advocate and
his clients, which in transactions such as these, would prevent the advocate from using
the privileged information he received in the employ of the parties, to the detriment of
one party or to the advantage of the other; it must realize that the advocate has a duty
not only to himself or his client in the suit, but to the opponent and the cause of justice;
but in all these, it must be convinced that real mischief and real prejudice would result
unless the advocate is prevented from acting in the matter for the opponent. The real
questions then become: Is the testimony of the advocate relevant, material or necessary
to the issues in controversy? Or is there other evidence which will serve the same
purpose as the evidence by counsel? Eventually, each case must be decided on its own
 merits, to see if real mischief and real prejudice will result in the circumstances of the
case. And in applying the test, if the argument on disqualification becomes feeble and
inconsistent with causing real mischief and prejudice, then a disqualification of counsel
will not be ordered.]].

Honourable Mr.Justice Ombwayo disallowed the application for disqualification of the

advocate.

[4] Rule 3.7 of the Advocate – Witness Rules of New York State

Even in other jurisdictions the rules and Court decisions are similar i.e. disqualification of counsel
is no longer automatic. He who seeks to disqualify an advocate from representing any particular
client and/ or party must lay a sound basis for so applying.

The Rule: (Lawyer as a Witness)

(a) A lawyer shall not act as advocate before a tribunal in a matter in which the lawyer is likely
to be a witness on a significant issue of fact unless:

(1) the testimony relates solely to an uncontested issue;

(2) the testimony relates solely to the nature and value of legal services rendered in
the matter;

(3) disqualification of the lawyer would work substantial hardship on the client;

(4) the testimony will relate solely to a matter of formality, and there is no reason to
believe that substantial evidence will be offered in opposition to the testimony; or

(5) the testimony is authorized by the tribunal.

(b) A lawyer may not act as advocate before a tribunal in a matter if:

(1) another lawyer in the lawyer’s firm is likely to be called as a witness on a significant
issue other than on behalf of the client, and it is apparent that the testimony may be
prejudicial to the client; or

(2) the lawyer is precluded from doing so by Rule 1.7 or Rule 1.9.

The leading case construing Rule 3.7 in New York is Murray v. Metropolitan Life Ins. Co.,
583 F.3d 173 (2d Cir. 2009). The Second Circuit Court explained the policies underlying the
rule that forbids the same lawyer from serving simultaneously as both advocate and witness
thus:

[[We have identified four risks that Rule 3.7(a) is designed to alleviate: (1) the lawyer
might appear to vouch for his own credibility;(2) the lawyer’s testimony might place
opposing counsel in a difficult position when she has to cross-examine her lawyer-
adversary and attempt to impeach his credibility; (3) some may fear that the testifying
attorney is distorting the truth as a result of bias in favor of his client; and (4) when an
individual assumes the role of advocate and witness both, the line between argument
and evidence may be blurred, and the jury confused. These concerns matter because,
if they materialize, they could undermine the integrity of the judicial process.]]

The Murray court also explained that these policies are much weaker in cases of “imputed”
disqualification under Rule 3.7(b) and reformulated the test for imputed disqualification under
the advocate-witness rule thus:

[[We now hold that a law firm can be disqualified by imputation only if the movant
proves by clear and convincing evidence that (1) the witness will provide testimony
prejudicial to the client, and (2) the integrity of the judicial system will suffer as a result.
This new formulation is consistent with our prior efforts to limit the tactical misuse of
the witness-advocate rule.]]

URIBE BROS. CORP. V. 1840 WASHINGTON AVENUE CORP. 26 Misc.3d 1235(a),

2010 WL 918432 (Bronx County Sup. Ct. 2010) as per (Dominic R. Massaro, J.)

In this case a commercial tenant (Uribe) sued a landlord (1840 Washington Avenue) for
breach of contract and other alleged wrongs. Apparently, the landlord had failed to obtain a
certificate of occupancy, so Uribe didn’t pay rent. The landlord had sued (in another case) for
nonpayment of rent and for eviction, and Uribe brought this suit to settle the score. By order
to show cause, the landlord sought to disqualify both Uribe’s attorney (Bernard Weintraub)
and the law firm at which Weintraub was “of counsel.” The basis for the motion was that
Weintraub, representing Uribe, had prepared and witnessed the original lease, and a later
lease amendment now at issue.

The landlord argued that Weintraub was likely to be called as a “necessary witness” to testify
about the “circumstances surrounding the lease agreement and the parties’ intentions involved
in agreeing to the amendment.” More specifically, the landlord said that Weintraub’s
“credibility” was in issue concerning the parties’ intent when they negotiated the lease and the
amendment to the lease, and that Weintraub was needed to testify concerning other aspects
of the negotiations, including whether the terms were translated so that defendant Pedro
Hernandez could understand the agreement. Finally, mistakenly believing that the advocate-
witness rule would disqualify Weintraub as a witness if he remained as an advocate, the
landlord argued that allowing Weintruab to remain as Uribe’s counsel and to be unavailable
to testify would cause significant prejudice to the landlord’s case.

Uribe countered that the landlord had made no showing as to why Weintraub’s testimony
would be necessary. Uribe also said he would be severely prejudiced if the landlord could
“dictate who is their attorney in this litigation.” Uribe pointed out that “when a lawyer invokes
the need to call an opposing attorney as witness and then acts to disqualify the witness as
counsel, such motions are subject to strict scrutiny because of the likelihood for abuse and
use as a tactical device.”

Judge Massaro, in a well-reasoned opinion, had little difficulty denying the motion to
disqualify. In determining whether to disqualify an attorney on advocate-witness grounds, the
court said, it would be “guided, but not bound in discretion,” by Rule 3.7. Then Judge Massaro
recognized that the advocate-witness rule lends itself to “opportunistic abuse.” Because of that
potential abuse, a court “must guard against the advocate/witness rule’s tactical use to
disqualify counsel, and must subject disqualification motions to strict scrutiny.” The moving
party bears the burden of demonstrating specifically both (a) how and as to what issues
prejudice may occur, and (b) that the likelihood that “prejudice” will occur is substantial.

Judge Massaro set a standard:

Disqualification is appropriate only if proven by clear and convincing evidence that

(1) the witness will provide testimony prejudicial to the client and

(2) the integrity of the judicial system will suffer as a result.

The landlord in Uribe did not meet this burden. The essence of the question was “whether
Weintraub simultaneously can function as witness and attorney, and whether the need to
obtain counsel’s testimony will place defendants at a disadvantage if Weintraub continues as
 Plaintiffs’ counsel.” The court understood that the parties disagreed about the proper
interpretation of the lease, but “the factual dispute is insufficient by itself to deprive Plaintiffs
of Weintraub’s legal services,” and the factual dispute provided no grounds for disqualifying
the firm.

The Court found for a fact that the trial was still a long way off. The court therefore stated:

[[Courts often permit attorneys who are potential witnesses to represent clients
throughout pretrial proceedings including discovery and dispositive proceeding before
considering disqualification. At this stage of the litigation, where the pleadings are
incomplete, doubt remains that attorney Weintraub in fact needs to be called as a
witness. as a result, this motion can be viewed as premature …]]

BOTTOM LINE:

1. The applicant should demonstrate that there was an advocate/client relationship between
him and that firm of advocates he seeks to disqualify.

2. The application by the applicant must establish circumstances justifying reasonable

apprehension of likelihood of bias.

3. Where a party asserts that conflict of interest exists, he must provide sufficient evidence to
demonstrate that such conflict of interest indeed exists.

4. A party wishing to disqualify an advocate or a firm of advocates from acting for a particular
party must show that it has suffered or will suffer prejudice if such an advocate or firm of
advocates continues to so act for that party.

5. The Court must be alive to the fact that mere suspicion or apprehension of a possible
conflict of interest or fear of prejudice cannot be a basis to stop an advocate from acting on
behalf of a party.

6. Every party has a right to be represented by counsel of his choice and as such applications
to disqualify counsel from acting for a party should be thoroughly interrogated.

7. The proper test is that a court must be satisfied that real mischief is anticipated and real
prejudice will, in all human probability, result if the advocate is allowed to act for the
opponent.
8. If the argument on disqualification becomes feeble and inconsistent with causing real
mischief and prejudice, then a disqualification of counsel should not be ordered.

9. Each party to a litigation has the right to choose his or her own advocate and unless it is
shown to a court of law that the interests of justice would not be served if a particular advocate
were allowed to act in the matter, the parties must be allowed to choose their own counsel.

10. The right to legal representation by counsel of one’s choice in civil matters is implicit in the
constitutional provisions with regard to access to justice and it is only in very exceptional
circumstances that this right should be taken away.

11. The Court is to thrust the essential core of the grounds advanced for disqualification, look
at the real issues in dispute, the facts of the case and place all that on the scale of the threshold
of the law applicable.

12. The decision to disqualify counsel must not be oblivious of the centrality of the right to legal
representation in the Constitution as the over-arching hanger.

13. The decision to disqualify should not be removed from reach to the sensitive fiduciary
relation between an advocate and his clients.

14. The Court must realize that the advocate has a duty not only to himself or his client in the
suit, but to the opponent and the cause of justice.

15. The Court should also consider whether the testimony of the advocate is relevant, material
or necessary to the issues in controversy.

16. Consideration should be given to any other evidence that can be supplied by the parties
which will serve the same purpose as the evidence by counsel sought to be disqualified.

17. Ordinarily Courts often determine disqualification of advocates who are suspected to be
potential witnesses during the pretrial proceedings and after discovery has been done.

18. An application for disqualification of an advocate made before pre – trial would therefore be
premature and without basis.