Conflict of Interests

During half time at a match

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Interesting.  So, Rangers FC have lodged a complaint with the Scottish Legal Complaints Commission about an alleged conflict of interest in Levy & McRae (who once acted for them) acting for former Chief Executive Martin Bain in suing them.  The SLCC has referred the case to the Law Society of Scotland.

The facts of the case, as far as I can work out from the report in The Herald, are as follows.  Levy & McRae have acted for Rangers FC in the past.  The Glasgow firm state that this has been solely in relation to disciplinary matters – for example the well publicised UEFA fine for sectarian singing (which was the matter over which Levy & McRae recently sued Rangers for payment of their fees).

Levy & McRae are now acting for Mr. Bain, who is suing his former employers in relation to the manner of his departure.  This Tuesday, at the Court of Session, they persuaded the Court to freeze almost half a million pounds of Rangers’ assets on the strength of the case on the basis there was a risk of insolvency.

Rangers FC claim this amounts to a conflict of interest, and have instructed their everyday solicitors Collyer Bristow to lodge a complaint with the SLCC.  However, Levy & McRae claim that they have checked the position with not one, but two, senior counsel and also Bruce Ritchie of the Law Society of Scotland.  All of whom, they say, are happy that there is no conflict of interest arising.

So, who is correct?  When does a conflict of interest arise?  Obviously, I should be able to answer this question off the top of my head.  Just to be on the safe side, I checked on the Law Society of Scotland’s website, which outlines the position.

The section on Conflict of Interest is worth reading in full, and isn’t that lengthy – especially since (for these purposes at least) you can safely ignore the matrimonial, criminal and conveyancing sections.  In relation to civil matters, the following seemed to be of possible relevance.

Para 6(1) of the Schedule to the Solicitors (Scotland) (Standards of Conduct) Practice Rules 2008 states:

“Solicitors must not act for two or more clients in matters where there is a conflict of interest between the clients or for any client where there is a conflict between the interests of the client and that of the solicitor or the solicitor’s practice”.

Helpfully, the guidance notes clarify: “Neither the Standards Rules nor the Conflict of Interest Rules contain a definition of conflict of interest. It has been said that it is hard to define but you know it when you see it. Unfortunately some solicitors only seem to see it long after it has appeared and when it is too late.” Brilliant, thanks.

One of the leading textbooks in this area has this to say:

“Where facts are disclosed to a solicitor on behalf of one client which may be prejudicial if disclosed to another client without the authority of the first, there is almost certainly a conflict of interest.”
Jane Ryder, Professional Conduct for Scottish Solicitors

The 1989 Code of Conduct adds:

“A lawyer must also refrain from acting for a new client if there is a risk of a breach of confidences entrusted to the lawyer by a former client or if the knowledge which the lawyer possesses of the affairs of the former client would give an undue advantage to the new client.”

In other words, according to the guidance note:

“The nature of these two duties [confidentiality and disclosure] is such that … neither can take precedence over the other. It follows therefore that if a solicitor has information which would be relevant to a client but which he requires to keep confidential in the interests of another client, there is a conflict of interest between those clients.”

Given that Mr. Bain was the Chief Executive of Rangers FC, it may seem unlikely that Levy & McRae were party to confidential information of relevance to his case that he himself was not already aware of. What does seem likely is that this saga will last a lot longer that Ranger’s European campaign this year!

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1 Response to Conflict of Interests

  1. Pingback: Life, Liberty and the pursuit of happiness – Scottish Roundup

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