Lawyers and conflict of interests



A lawyer was suspended from the practice of law for a period of one year for violating the Code of Professional Responsibility on representing parties with conflicting interests.

A woman had legal problems due to dishonored checks issued to her by a Manila City councilor. She sought the advice of a lawyer-friend, who, after being paid his professional fees, drafted and sent a demand letter for the payment of the checks. After the lapse of some time and continued non-payment despite demands, the woman filed a criminal case against the councilor for estafa and violation of B.P. 22. To her surprise, she found out that her lawyer-friend had filed a motion for consolidation on behalf of the councilor and even appeared as the councilor’s counsel before the prosecutor. She filed a case against his lawyer-friend for violating the Code of Professional Responsibility by representing two clients with conflicting interests.

The lawyer admitted drafting the demand letter but denied being his friend’s lawyer. He argued that he only drafted the letter because they were good friends and nothing more.

Neither did he receive any professional fee for his services. Moreover, they agreed that his friend would retain the services of another lawyer, which she did. This other lawyer also drafted a demand letter, which was actually used to file the cases of estafa and B.P. 22.
The Supreme Court dismissed the arguments of the lawyer and ruled that a lawyer-client relationship existed between him and his friend –

A lawyer-client relationship can exist notwithstanding the close friendship between complainant and respondent. The relationship was established the moment complainant sought legal advice from respondent regarding the dishonored checks. By drafting the demand letter, respondent further affirmed such relationship. The fact that the demand letter was not utilized in the criminal complaint filed and that respondent was not eventually engaged by complainant to represent her in the criminal cases is of no moment . . . By referring to complainant as “my client” in the demand letter sent to the defaulting debtor, respondent admitted the existence of the lawyer-client relationship. Such admission effectively estopped him from claiming otherwise.

The SC further ruled that professional fees need not be paid before a lawyer-client relationship exists.

The non-payment of professional fees will not exculpate respondent from liability.

Absence of monetary consideration does not exempt lawyers from complying with the prohibition against pursuing cases with conflicting interests. The prohibition attaches from the moment the attorney-client relationship is established and extends beyond the duration of the professional relationship. We held in Burbe v. Atty. Magulta that it is not necessary that any retainer be paid, promised or charged; neither is it material that the attorney consulted did not afterward handle the case for which his service had been sought.

Even though the services of another lawyer were retained, the High Court reiterated that this did not give the former lawyer the right to represent the opposing party as it constituted a violation of the confidence resulting from the attorney-client relationship.
Citing Hornilla v. Atty. Salunat, a conflict of interest exists when a lawyer represents inconsistent interests of two or more opposing parties, regardless of whether confidential communications have been confided, used, or bestowed. The prohibition against representing conflicting interest is founded on principles of public policy since the nature of the relationship is one of trust and confidence of the highest degree. As an exception to the rule, the only time a lawyer may represent conflicting interests between parties is when written consent is obtained by all concerned after a full disclosure of the facts (Castro-Justo v. Galing, A.C. No. 6174, 16 November 2011, J. Perez).


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