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Conflicts Of Interest And SRA Expectations

  • Datalaw Admin
  • May 16, 2019
  • 0 comment(s)

A conflict of interest is also a situation in which an individual has competing interests or loyalties.  Conflicts of interest involve a person who has two relationships that might compete with each other for the person's loyalties. For example, the person might have a loyalty to an employer and also loyalty to a family business. Each of these businesses expects the person to have its best interest first. Thus, the conflict.

A conflict of interest arises in the workplace when an employee has competing interests or loyalties that either is or potentially can be, at odds with each other.

An example is a manager who was promoted from a coworker job where he worked with his wife. The promotion made him his wife's boss so the company, after discussion with the couple and HR, transferred her to another department.

A conflict of interest causes an employee to experience a struggle between diverging interests, points of view, or allegiances. Conflicts of interest are generally forbidden in company codes of conduct and/or employee handbooks.

Conflicts of interest can cause an employee to act out of interests that are divergent from those of his or her employer or co-workers. In workplaces, employees want to avoid any behaviour or choices that could potentially signal a conflict of interest. They are bad news for the employee's reputation, integrity, and trustworthiness in the eyes of management.


Generally speaking, a conflict of interest tends to occur in one of three ways:

1.  When an individual has the opportunity to use his or her Partners position for personal financial gain or to benefit a company in which the individual has a financial interest.

2.  When outside financial or other interests may inappropriately influence the way in which an individual carries out his or her Partners responsibilities.

3.   When an individual’s outside interests otherwise may cause harm to Partners’ reputation, staff, or patients.


In addition to conflicts of interest, another type of conflict is a conflict of commitment.  This occurs when there is an outside relationship that may deter an individual from devoting an appropriate amount of time, energy, creativity, or other personal resources to his or her Partner responsibilities.


Conflicts of interest and commitment are not in and of themselves unethical or impermissible; indeed, they are often unavoidable and in many cases can be appropriately managed or reduced to an acceptable level. However, Partners professionals and staff should be cognizant of the fact that any outside activity, interest, or interaction with industry has the potential to create conflicts, whether real or perceived.  Recognition of potential conflicts, and sensitivity to how personal, financial and other relationships can be perceived by others, are by themselves important parts of managing conflicts.


Examples of Conflicts of Interest

As described above, a conflict of interest exists where an outside financial interest or relationship has the potential to affect the way you do you Partners work. While it is important to be mindful of all situations creating a conflict of interest, it is equally important to remember that not all situations that involve a conflict of interest are prohibited by Partners policies.

As an illustration, all of the situations below create some degree of conflict of interest; however, some of them, depending on the circumstances, is acceptable under Partners policies with certain limitations or restrictions. 

Conflicts of interest are difficult to describe in a definition, so the following additional examples will illuminate the range of behaviours and actions that can fall within the definition of conflicts of interest. They are as diverse as the work settings in which they occur and involve people interaction, employee actions, and personal benefits taking precedence over what is in the best interests of the employer.

1. Receiving consulting fees from a company while performing clinical research on the company’s technology.

While presenting a conflict of interest, this situation may be acceptable as long as the consulting arrangement is properly documented and reviewed and the amount of the payments does not exceed specific thresholds. Exceptions may be allowed under limited conditions even if payments exceed the thresholds, with appropriate management.


2. Owning stock in a company while performing research sponsored by the company.

While presenting a conflict of interest, this situation may be acceptable depending on the circumstances under which the stock was acquired and on whether the company is a large, publicly-traded company and the value of the stock does not exceed specific thresholds. Exceptions may be allowed under limited conditions even if payments exceed the thresholds, with appropriate management.

3. Conducting federally-funded research that could affect the financial interests of a company in which the investigator has a personal financial interest.

While presenting a potential conflict of interest, this situation may be acceptable depending on whether the financial interest could directly and significantly affect the research, in which case, the financial interest must be managed, reduced, or eliminated.

4. Involving students or post-doctoral students and trainees in work that could directly benefit a company in which the faculty member supervising the students has a personal financial interest.

While presenting a conflict of interest, this situation may be acceptable as long as certain approval and oversight steps are taken to ensure that the interests of the students/trainees are adequately protected.



What are the rules?

The rules covering conflict of interest, confidentiality and disclosure are found in chapters 3 and 4 of the Solicitors Regulation Authority (“SRA”) Code of Conduct.

The SRA Code of Conduct can be a dull old read. However, it distils down to the fact that:

·    A solicitor cannot act for a client where there is a conflict or significant risk of a conflict between the solicitor and that client;

·   Where there is a conflict or significant risk of the conflict between two or more clients, the solicitor cannot act for all or both unless it falls within very narrow exceptions.

When deciding which clients the solicitor can act for, serious consideration should be given by the solicitor to issues regarding confidentiality and disclosure.

Protection of confidential information is a fundamental feature of a solicitor’s relationship with their clients. The duty continues after the end of the retainer and even after the death of a client.

The solicitor also has a duty of disclosure to clients. The duty is limited to information of which the solicitor is aware, and which is material to the client’s matter. A solicitor cannot continue to act for a client for whom they cannot disclose material information.

Where the duty of confidentiality and duty of disclosure cannot be reconciled, the duty to protect confidential information is paramount.


Confidentiality and disclosure

Version 21 of the Handbook was published on 6 December 2018.

It is about the protection of clients' confidential information and the disclosure of material information to clients.

Protection of confidential information is a fundamental feature of your relationship with clients. It exists as a concept both as a matter of law and as a matter of conduct. This duty continues despite the end of the retainer and even after the death of the client.

It is important to distinguish the conduct duties from the concept of law known as legal professional privilege.

Bear in mind that all members of the firm or in-house practice, including support staff, consultants and locums, owe a duty of confidentiality to your clients.

The duty of confidentiality to all clients must be reconciled with the duty of disclosure to clients. This duty of disclosure is limited to information of which you are aware of which is material to your client's matter. Where you cannot reconcile these two duties, then the protection of confidential information is paramount. You should not continue to act for a client for whom you cannot disclose material information, except in very limited circumstances, where safeguards are in place. Such situations often also give rise to a conflict of interests.

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