Rule 1.7 Conflict of Interest: Current Clients (Rule Approved by the

Rule 1.7 Conflict of Interest: Current Clients

(Rule Approved by the Supreme Court, Effective November 1, 2018)

(a) A lawyer shall not, without informed written consent* from each client and

compliance with paragraph (d), represent a client if the representation is directly

adverse to another client in the same or a separate matter.

(b) A lawyer shall not, without informed written consent* from each affected client

and compliance with paragraph (d), represent a client if there is a significant risk

the lawyer’s representation of the client will be materially limited by the lawyer’s

responsibilities to or relationships with another client, a former client or a third

person,* or by the lawyer’s own interests.

not present, a lawyer shall not represent a client without written* disclosure of the

relationship to the client and compliance with paragraph (d) where:

(1) the lawyer has, or knows* that another lawyer in the lawyer’s firm* has, a

legal, business, financial, professional, or personal relationship with or

responsibility to a party or witness in the same matter; or

(2) the lawyer knows* or reasonably should know* that another party’s lawyer

is a spouse, parent, child, or sibling of the lawyer, lives with the lawyer, is

a client of the lawyer or another lawyer in the lawyer’s firm,* or has an

intimate personal relationship with the lawyer.

(d) Representation is permitted under this rule only if the lawyer complies with

paragraphs (a), (b), and (c), and:

(1) the lawyer reasonably believes* that the lawyer will be able to provide

competent and diligent representation to each affected client;

(2) the representation is not prohibited by law; and

(3) the representation does not involve the assertion of a claim by one client

against another client represented by the lawyer in the same litigation or

other proceeding before a tribunal.

(e) For purposes of this rule, “matter” includes any judicial or other proceeding,

application, request for a ruling or other determination, contract, transaction,

claim, controversy, investigation, charge, accusation, arrest, or other deliberation,

decision, or action that is focused on the interests of specific persons,* or a

discrete and identifiable class of persons.*

Comment

[1] Loyalty and independent judgment are essential elements in the lawyer’s

relationship to a client. The duty of undivided loyalty to a current client prohibits

undertaking representation directly adverse to that client without that client’s informed

written consent.* Thus, absent consent, a lawyer may not act as an advocate in one

matter against a person* the lawyer represents in some other matter, even when the

matters are wholly unrelated. (See Flatt v. Superior Court (1994) 9 Cal.4th 275 [36

Cal.Rptr.2d 537].) A directly adverse conflict under paragraph (a) can arise in a number

of ways, for example, when: (i) a lawyer accepts representation of more than one client

in a matter in which the interests of the clients actually conflict; (ii) a lawyer, while

representing a client, accepts in another matter the representation of a person* who, in

the first matter, is directly adverse to the lawyer’s client; or (iii) a lawyer accepts

representation of a person* in a matter in which an opposing party is a client of the

lawyer or the lawyer’s law firm.* Similarly, direct adversity can arise when a lawyer

cross-examines a non-party witness who is the lawyer’s client in another matter, if the

examination is likely to harm or embarrass the witness. On the other hand,

simultaneous representation in unrelated matters of clients whose interests are only

economically adverse, such as representation of competing economic enterprises in

unrelated litigation, does not ordinarily constitute a conflict of interest and thus may not

require informed written consent* of the respective clients.

[2] Paragraphs (a) and (b) apply to all types of legal representations, including the

concurrent representation of multiple parties in litigation or in a single transaction or in

some other common enterprise or legal relationship. Examples of the latter include the

formation of a partnership for several partners* or a corporation for several

shareholders, the preparation of a pre-nuptial agreement, or joint or reciprocal wills for a

husband and wife, or the resolution of an “uncontested” marital dissolution. If a lawyer

initially represents multiple clients with the informed written consent* as required under

paragraph (b), and circumstances later develop indicating that direct adversity exists

between the clients, the lawyer must obtain further informed written consent* of the

clients under paragraph (a).

[3] In State Farm Mutual Automobile Insurance Company v. Federal Insurance

Company (1999) 72 Cal.App.4th 1422 [86 Cal.Rptr.2d 20], the court held that paragraph

(C)(3) of predecessor rule 3-310 was violated when a lawyer, retained by an insurer to

defend one suit, and while that suit was still pending, filed a direct action against the

same insurer in an unrelated action without securing the insurer’s consent.

Notwithstanding State Farm, paragraph (a) does not apply with respect to the

relationship between an insurer and a lawyer when, in each matter, the insurer’s interest

is only as an indemnity provider and not as a direct party to the action.

[4] Even where there is no direct adversity, a conflict of interest requiring informed

written consent* under paragraph (b) exists if there is a significant risk that a lawyer’s

ability to consider, recommend or carry out an appropriate course of action for the client

will be materially limited as a result of the lawyer’s other responsibilities, interests, or

relationships, whether legal, business, financial, professional, or personal. For

example, a lawyer’s obligations to two or more clients in the same matter, such as

several individuals seeking to form a joint venture, may materially limit the lawyer’s

ability to recommend or advocate all possible positions that each might take because of

the lawyer’s duty of loyalty to the other clients. The risk is that the lawyer may not be

able to offer alternatives that would otherwise be available to each of the clients. The

mere possibility of subsequent harm does not itself require disclosure and informed

written consent.* The critical questions are the likelihood that a difference in interests

exists or will eventuate and, if it does, whether it will materially interfere with the lawyer’s

independent professional judgment in considering alternatives or foreclose courses of

action that reasonably* should be pursued on behalf of each client. The risk that the

lawyer’s representation may be materially limited may also arise from present or past

relationships between the lawyer, or another member of the lawyer’s firm*, with a party,

a witness, or another person* who may be affected substantially by the resolution of the

matter.

[5] Paragraph (c) requires written* disclosure of any of the specified relationships

even if there is not a significant risk the relationship will materially limit the lawyer’s

representation of the client. However, if the particular circumstances present a

significant risk the relationship will materially limit the lawyer’s representation of the

client, informed written consent* is required under paragraph (b).

[6] Ordinarily paragraphs (a) and (b) will not require informed written consent* simply

because a lawyer takes inconsistent legal positions in different tribunals* at different

times on behalf of different clients. Advocating a legal position on behalf of a client that

might create precedent adverse to the interests of another client represented by a

lawyer in an unrelated matter is not sufficient, standing alone, to create a conflict of

interest requiring informed written consent.* Informed written consent* may be required,

however, if there is a significant risk that: (i) the lawyer may temper the lawyer’s

advocacy on behalf of one client out of concern about creating precedent adverse to the

interest of another client; or (ii) the lawyer’s action on behalf of one client will materially

limit the lawyer’s effectiveness in representing another client in a different case, for

example, when a decision favoring one client will create a precedent likely to seriously

weaken the position taken on behalf of the other client. Factors relevant in determining

whether the clients’ informed written consent* is required include: the courts and

jurisdictions where the different cases are pending, whether a ruling in one case would

have a precedential effect on the other case, whether the legal question is substantive

or procedural, the temporal relationship between the matters, the significance of the

legal question to the immediate and long-term interests of the clients involved, and the

clients’ reasonable* expectations in retaining the lawyer.

[7] Other rules and laws may preclude the disclosures necessary to obtain the

informed written consent* or provide the information required to permit representation

under this rule. (See, e.g., Bus. & Prof. Code, § 6068, subd. (e)(1) and rule 1.6.) If

such disclosure is precluded, representation subject to paragraph (a), (b), or (c) of this

rule is likewise precluded.

[8] Paragraph (d) imposes conditions that must be satisfied even if informed written

consent* is obtained as required by paragraphs (a) or (b) or the lawyer has informed the

client in writing* as required by paragraph (c). There are some matters in which the

conflicts are such that even informed written consent* may not suffice to permit

representation. (See Woods v. Superior Court (1983) 149 Cal.App.3d 931 [197 Cal.Rptr.

185]; Klemm v. Superior Court (1977) 75 Cal.App.3d 893 [142 Cal.Rptr. 509]; Ishmael v.

Millington (1966) 241 Cal.App.2d 520 [50 Cal.Rptr. 592].)

[9] This rule does not preclude an informed written consent* to a future conflict in

compliance with applicable case law. The effectiveness of an advance consent is

generally determined by the extent to which the client reasonably* understands the

material risks that the consent entails. The more comprehensive the explanation of the

types of future representations that might arise and the actual and reasonably*

foreseeable adverse consequences to the client of those representations, the greater

the likelihood that the client will have the requisite understanding. The experience and

sophistication of the client giving consent, as well as whether the client is independently

represented in connection with giving consent, are also relevant in determining whether

the client reasonably* understands the risks involved in giving consent. An advance

consent cannot be effective if the circumstances that materialize in the future make the

conflict nonconsentable under paragraph (d). A lawyer who obtains from a client an

advance consent that complies with this rule will have all the duties of a lawyer to that

client except as expressly limited by the consent. A lawyer cannot obtain an advance

consent to incompetent representation. (See rule 1.8.8.)

[10] A material change in circumstances relevant to application of this rule may trigger

a requirement to make new disclosures and, where applicable, obtain new informed

written consents.* In the absence of such consents, depending on the circumstances,

the lawyer may have the option to withdraw from one or more of the representations in

order to avoid the conflict. The lawyer must seek court approval where necessary and

take steps to minimize harm to the clients. See rule 1.16. The lawyer must continue to

protect the confidences of the clients from whose representation the lawyer has

withdrawn. (See rule 1.9(c).)

[11] For special rules governing membership in a legal service organization, see rule

6.3; and for work in conjunction with certain limited legal services programs, see rule

6.5.

NEW RULE OF PROFESSIONAL CONDUCT 1.7

(Former Rule 3-310(B), (C))

Conflict of Interest: Current Client

EXECUTIVE SUMMARY

The Commission for the Revision of the Rules of Professional Conduct (“Commission”) has

evaluated current rule 3-310 (Avoiding the Representation of Adverse Interests) in accordance

with the Commission Charter, with a focus on the function of the rule as a disciplinary standard,

and with the understanding that the rule comments should be included only when necessary to

explain a rule and not for providing aspirational guidance. In addition, the Commission

considered the national standard of the American Bar Association (“ABA”) counterparts, a series

of rules that address conflicts of interest as they might arise in a number of different situations:

Model Rules 1.7 (Current Client Conflicts); 1.8(f) (third party payments); 1.8(g) (aggregate

settlements); and 1.9 (Duties To Former Clients).

The result of the Commission’s evaluation is a two-fold recommendation for implementing:

(1) the Model Rules’ framework of having separate rules that regulate different conflicts

situations: proposed rules 1.7 (current clients), 1.8.6 (payments from one other than

client), 1.8.7 (aggregate settlements) and 1.9 (former clients); and

(2) proposed Rule 1.7 (conflicts of interest: current clients), which regulates conflicts

situations that are currently regulated under rule 3-310(B) and (C). Proposed rule 1.7

largely tracks the ABA approach to current client conflicts of stating general rules

regarding “direct adversity” conflicts between clients of a lawyer (addressed incompletely

in current rule 3-310(C)(2) and (C)(3)) and “material limitation” conflicts (e.g., a joint

representation conflict), which are currently addressed in current rule 3-310(C)(1) and

3-310(B).

Proposed rule 1.7 has been adopted by the Commission for submission to the Board of

Trustees for public comment authorization..

1. Recommendation of the ABA Model Rule Conflicts Framework. The rationale

underlying the Commission’s recommendation of the ABA’s multiple-rule approach is its

conclusion that such an approach should facilitate compliance with and enforcement of conflicts

of interest principles. Among other things, separate rules should reduce confusion and provide

out-of-state lawyers, who often practice in California under one of the multijurisdictional practice

rules (9.45 to 9.48) with quick access to the rules governing their specific conflicts problem. At

the same time, this approach will promote a national standard in how the different conflicts of

interest principles are organized within the Rules.

Every other jurisdiction in the country has adopted the ABA conflicts rules framework. In addition to

the identified provisions, the Model Rules also include Model Rule 1.8, which includes eight provisions in

addition to paragraphs (d) and (f) that cover conflicts situations addressed by standalone California Rules

(e.g., MR 1.8(a) is covered by California Rule 3-300 [Avoiding Interests Adverse To A Client] and MR

1.8(e) is covered by California Rule 4-210 [Payment of Personal or Business Expenses By Or For A

Client)].)

Further, the Model Rules also deal with concepts that are addressed by case law in California: Model

Rules 1.10 (Imputation of Conflicts and Ethical Screening); 1.11 (Conflicts Involving Government Officers

2. Recommendation of the ABA approach of proposed Rule 1.7. The recommended

approach tracks the ABA Model Rule, which generally describes two kinds of conflict situations

relating to current clients: (1) those involving direct adversity, (MR 1.7(a)(1)), and (2) those

involving a significant risk that a lawyer’s representation of current clients will be materially

limited by the lawyer’s responsibilities to another client or third person, or by the lawyer’s

personal interests. (MR 1.7(a)(2)).

There are a number of reasons for the Commission’s recommendation. First, the proposed rule

will facilitate compliance with enforcement of the current client conflicts rule provisions by

incorporating more clearly-stated general conflicts principles, (see paragraph (a) and introductory

clause to paragraph (b)), while providing specific examples in the comments to the rules.

Second, the approach will also increase client protection by including the generally-stated

conflicts principles that are subject to regulation under the rule, rather than limiting the rule’s

application to several discrete situations as in current rule 3-310(B) and (C). Third, by

incorporating the generally-stated principles in Model Rule 1.7(a)(1) and (2) into paragraphs (a)

and (b), the proposed rule will help promote a national standard in conflicts of interest. Fourth, by

incorporating the provisions in Model Rule 1.7(b)(1) – (3) concerning unconsentable conflicts into

proposed paragraph (d), the proposed rule will move this important concept into the black letter

rather than relegate it to two separate Discussion paragraphs in the current rule (see rule 3-310,

Discussion paragraphs 2 and 10).

Informed written consent. In addition to the foregoing considerations, the Commission

recommends carrying forward California’s more client-protective requirement that a lawyer

obtain the client’s “informed written consent,” which requires written disclosure of the potential

adverse consequences of the client consenting to a conflicted representation. The Model Rules,

on the other hand, employ a less-strict requirement of requiring only “informed consent,

confirmed in writing.” That standard permits a lawyer to confirm by email or even text message

that the client has consented to a conflict.

Paragraph (a) of proposed Rule 1.7 incorporates the concept of direct adversity of interests of

two current clients. This carries forward the concept in current rule 3-310(C)(2) and (3), and

Model Rule 1.7(a)(1).

Paragraph (b) incorporates the concept of material limitations on a lawyer’s representation of a

client because of duties owed another current or former client, or because a relationship with a

client or other person. The paragraph borrows the language of Model Rule 1.7(a)(2) in carrying

forward the concepts found in current rule 3-310(B) and (C)(1).

Paragraph (c) carries forward the concepts in current rules 3-310(B)(1) and 3-320. Similar to

paragraph (b), this paragraph is concerned with limitations on the lawyer’s ability to represent a

client because of the lawyer’s duties to or relationships with other persons. These situation is

not included in paragraph (b) because the Commission believes that the standard in current rule

3-310(B) – the lawyer must only provide written disclosure to the client of the relationship –

should be carried forward, rather than applying paragraph (b)’s “informed written consent”

and Employees); and 1.12 (Conflicts Involving Former Judges and Judicial Employees). The Commission

is currently studying those rules.

standard.

This separate paragraph recognizes that there are certain instances when the duties

owed to or relationships with other persons do not create a “significant risk” of a material

limitation on the representation so as to require the heightened informed written consent

standard, but nevertheless warrants the reduced “written disclosure” standard currently found in

rule 3-310(B).

Paragraph (d) incorporates the provisions in Model Rule 1.7(b)(1) – (3) concerning

unconsentable conflicts. The concept is currently found in two separate Discussion paragraphs of

current rule 3-310 (paragraphs 2 and 10).

Unlike the Model Rule with 35 comments, there are only 12 comments to proposed Rule 1.7,

all of which provide interpretative guidance or clarify how the proposed rule, which is

intended to govern a broad array of complex conflicts situations, should be applied.

Comment [1] explains “direct adversity” of legal interests and importantly distinguishes

clients with economically adverse interests. Comment [2] provides a definition of “matter,” a

concept central to the rule’s application. Comment [3] carries forward the concept in current

rule 3-310, Discussion ¶.7, and explains the rule’s application to joint client representations.

Comment [4] carries forward current Discussion ¶.9, which the Supreme Court approved in

2002 after extensive debate among various stakeholders in the insurance industry.

Comment [5] explains how paragraph (b) should be applied by providing several discrete

examples. Comment [6] explains how paragraph (c) should be applied by comparison to

paragraph (b). Comment [7] explains when adverse positions clients have taken on a legal

issue may require a lawyer to obtain the clients’ informed written consent. Comment [8]

crucially explains that a lawyer’s duty of confidentiality may preclude the lawyer from

providing a disclosure sufficient to ensure the client’s consent is informed. Comment [9]

carries forward the substance of current Discussion ¶¶.2 and 10 concerning unconsentable

conflicts and provides citations to several cases that have addressed the issue. Comment

[10] is new and provides interpretative guidance regarding paragraphs (a) and (b) regarding

the extent to which they might apply to advance consents to future conflicts of interest.

Comment [11] notes that a second consent may be required should the circumstances

under which a consent was originally obtained change. Comment [12] provides cross-

references to proposed Rules 6.3 and 6.5, both of which permit otherwise conflicted

representations or provide exceptions for imputation under certain conditions.

1st Round 90-day Public Comment Period

Following consideration of public comment, the Commission made several changes to both

the text and comment of proposed Rule 1.7.

Text. In paragraphs (a) and (b), the Commission added the phrase “in compliance with

paragraph (d)” to clarify that a lawyer must not only obtain the client’s informed written

consent but must also comply with the requirements in paragraph (d).

In paragraph (b), the Commission deleted the examples that had been provided in the public

comment draft except for former subparagraph (b)(1), which has been moved to paragraph

The Commission determined that current rule 3-320’s requirement of merely “informing” the

client of the relationship with the other party’s lawyer was not sufficiently rigorous to enhance

public protection.

“hybrid” approach that involved merging the “checklist approach”

of regulating conflicts

involving current clients in current rule 3-310(B) and (C) with the ABA Model Rule’s approach,

which generally describes two kinds of conflict situations relating to current clients: (1) those

involving direct adversity, (MR 1.7(a)(1)), and (2) those involving a significant risk that a lawyer’s

representation of current clients will be materially limited by the lawyer’s responsibilities to

another client or third person, or by the lawyer’s personal interests. (MR 1.7(a)(2)). After

consideration of public comment, including a lengthy letter submitted by the State Bar

Committee on Professional Responsibility and Conduct, the Commission no longer favored this

hybrid approach and revised the rule to be a variation of the Model Rule 1.7.

The Commission added new paragraph (c), with a new introductory clause. Paragraph (c)

carries forward subparagraph (b)(1) of the public comment draft as subparagraph (c)(1) and

paragraph (c) of the public comment draft as subparagraph (c)(1). Similar to paragraphs (a)

and (b), paragraph (c) provides that not only must the lawyer give written disclosure to the

client of the relationships in paragraphs (c)(1) and (2), but must also comply with the

requirements in paragraph (d).

Comment. In Comment [2], which addresses the issue of positional conflicts, the first

sentence has been deleted and the second sentence has been moved to new Comment [7],

which contains a fuller discussion of positional conflicts.

The Commission has added new Comment [2], which explains what is meant by the term

“matter.” This comment is also cross-referenced in the Comment to both Rule 1.9 (Duties to

Former Clients) and Rule 1.11 (Special Conflicts of Interest for Former and Current

Government Officials and Employees).

In Comment [4], the Commission added a reference to paragraph (b), which also

corresponds to current rule 3-310(C)(3).

In Comment [5], the Commission added the clause “or relationships, whether legal,

business, financial, professional, or personal” to clarify the scope of paragraph (b). The last

sentence of Comment [5] was also added for the same reason.

New Comment [6] has been added to clarify the scope and application of new paragraph (c).

Public comment suggested that the public comment version of paragraphs (b) and (c) as

drafted created confusion because their coverage might overlap in some situations.

New Comment [7] contains a fuller discussion of positional conflicts. See Comment [2],

above.

In Comment [10] (Comment [8] in public comment draft), the Commission added a new third

sentence (“The experience and sophistication … consent.”) to identify factors in determining

the feasibility of obtaining an advance consent.

The “checklist” approach in current rule 3-310(B) and (C) involves the identification of discrete

categories of current conflict situations. Unless an alleged conflict fits within one of these discrete

categories, the lawyers involved will not be subject to discipline.

2nd Round 45-day Public Comment Period

Following consideration of a second round of public comments, the Commission made

changes to both the text and comment of proposed Rule 1.7.

Text. Paragraphs (a), (b) and (c) identify when a conflict of interest may arise and state that

a lawyer must obtain a client’s informed consent or make written disclosure to a client,

depending on the type of conflict. Paragraph (d) identifies circumstances where a conflict of

interests cannot be cured by client consent or disclosure. To reinforce the interrelationship

of these paragraphs, in paragraph (d) the Commission added the phrase if “the lawyer

complies with paragraphs (a), (b), and (c).” Public comments received stated that this was

not clear and might lead to confusion about whether consent or disclosure, standing alone,

can cure a conflict.

Comment. Comment [1] explains how to apply the concept of “direct adversity” by providing

non-exclusive examples. The Commission revised this comment to expressly state that the

identified situations are non-exclusive examples of direct adversity conflicts, and to add an

additional example that describes the directly adverse conflict that arises when a lawyer is

retained to sue a person who is a current client of the lawyer or the lawyer’s firm.

In Comment [2], the Commission added language to clarify that a “matter” for purposes of

this rule includes a “transaction,” an “investigation,” a “charge,” an “accusation” or an

“arrest.” Public comments recommended broader language to avoid an overly narrow

construction of the rule.

Comment [4] carries forward Discussion paragraph 9 in current rule 3-310, which the

Supreme Court of California approved in 2002 after extensive study with participants of

various stakeholders in the insurance industry. Discussion paragraph 9 clarifies the extent

to which rule 3-310(C)(3) might apply to a lawyer’s duties in an insurance defense tripartite

relationship. The Commission has revised the comment to refer only to paragraph (a) of the

proposed rule which carries forward current rule 3-310(C)(3).

Comment [7] in part carries forward Discussion paragraph 1 in current rule 3-310 which

explains that representing inconsistent legal positions in different matters ordinarily does not

trigger a conflict of interest. The Commission revised the second sentence of Comment [7]

to use a simpler sentence structure and to use the phrase “sufficient, standing alone” to

avoid the comment from being potentially overbroad. This clarification was recommended by

a public comment.

With these changes, the Board’s Committee on Regulation and Discipline authorized an

additional 30-day public comment period on the revised proposed rule.

Final Commission Action on the Proposed Rule

The additional 30-day public comment period ended on March 6, 2017 and three written

comments were received. The Commission considered these comments at its meeting on

March 7, 2017. At this meeting, the Commission also considered two comments that were

received after the deadline for the prior 45-day comment period. Following consideration of

these comments, the Commission made no changes to the rule and voted to recommend

the rule for adoption. Members of the Commission submitted dissents to this rule that can be

found following the Report and Recommendation.

The Board adopted proposed rule 1.7 at its March 9, 2017 meeting.

Supreme Court Action (May 10, 2018)

The Supreme Court approved the rule as modified by the Court to be effective November 1,

2018. The Court deleted Comment [2], and moved the definition of “matter” to the text of the

rule as paragraph (e), and renumbered the subsequent Comments. The Supreme Court also

deleted “or organization” in Comment [1].

Supreme Court Action (September 26, 2018)

Subsequently, the Board adopted staff recommended “clean-up” revisions to various rules,

including this rule. All of these changes were non-substantive and, for example,

implemented copy editing corrections to style and punctuation. The Supreme Court

approved the “clean-up” revisions operative November 1, 2018 by order dated September

26, 2018.

Rule 3-310 Avoiding the Representation of Adverse Interests

Rule 1.7 Conflict of Interest: Current Clients

(Redline Comparison to the California Rule Operative Until October 31, 2018)

(a) A lawyer shall not, without informed written consent* from each client and

compliance with paragraph (d), represent a client if the representation is directly

adverse to another client in the same or a separate matter.

(b) A lawyer shall not, without informed written consent* from each affected client

and compliance with paragraph (d), represent a client if there is a significant risk

the lawyer’s representation of the client will be materially limited by the lawyer’s

responsibilities to or relationships with another client, a former client or a third

person,* or by the lawyer’s own interests.

not present, a lawyer shall not represent a client without written* disclosure of the

relationship to the client and compliance with paragraph (d) where:

(B) A member shall not accept or continue representation of a client without

providing written disclosure to the client where:

(1) The member hasthe lawyer has, or knows* that another lawyer in the

lawyer’s firm* has, a legal, business, financial, professional, or personal

relationship with or responsibility to a party or witness in the same matter;

Rule 3-320 Relationship With Other Party's Lawyer

(2) A member shall not represent a client in a matter in which the lawyer

knows* or reasonably should know* that another party’s lawyer is a

spouse, parent, child, or sibling of the memberlawyer, lives with the

memberlawyer, is a client of the memberlawyer or another lawyer in the

lawyer’s firm,* or has an intimate personal relationship with the member,

unless the member informs the client in writing of the relationshiplawyer.

(2) The member knows or reasonably should know that:

(a) the member previously had a legal, business, financial,

professional, or personal relationship with a party or witness in the

same matter; and

(b) the previous relationship would substantially affect the member’s

representation; or

(3) The member has or had a legal, business, financial, professional, or

personal relationship with another person or entity the member knows or

reasonably should know would be affected substantially by resolution of

the matter; or

(4) The member has or had a legal, business, financial, or professional

interest in the subject matter of the representation.

(1) Accept representation of more than one client in a matter in which the

interests of the clients potentially conflict; or

(d) Representation is permitted under this rule only if the lawyer complies with

paragraphs (a), (b), and (c), and:

(1) the lawyer reasonably believes* that the lawyer will be able to provide

competent and diligent representation to each affected client;

(2) the representation is not prohibited by law; and

(3) the representation does not involve the assertion of a claim by one client

against another client represented by the lawyer in the same litigation or

other proceeding before a tribunal.

(e) For purposes of this rule, “matter” includes any judicial or other proceeding,

application, request for a ruling or other determination, contract, transaction,

claim, controversy, investigation, charge, accusation, arrest, or other deliberation,

decision, or action that is focused on the interests of specific persons,* or a

discrete and identifiable class of persons.*

Comment

[1] (2) Accept or continue Loyalty and independent judgment are essential elements

in the lawyer’s relationship to a client. The duty of undivided loyalty to a current client

prohibits undertaking representation directly adverse to that client without that client’s

informed written consent.* Thus, absent consent, a lawyer may not act as an advocate

in one matter against a person* the lawyer represents in some other matter, even when

the matters are wholly unrelated. (See Flatt v. Superior Court (1994) 9 Cal.4th 275 [36

Cal.Rptr.2d 537].) A directly adverse conflict under paragraph (a) can arise in a number

of ways, for example, when: (i) a lawyer accepts representation of more than one client

in a matter in which the interests of the clients actually conflict; or

(3)(ii) Representa lawyer, while representing a client, accepts in aanother matter and at

the same time in a separate matter accept as a clientthe representation of a person or

entity whose interest* who, in the first matter, is directly adverse to the client in the first

matter.lawyer’s client; or (iii) a lawyer accepts representation of a person* in a matter in

which an opposing party is a client of the lawyer or the lawyer’s law firm.* Similarly,

direct adversity can arise when a lawyer cross-examines a non-party witness who is the

lawyer’s client in another matter, if the examination is likely to harm or embarrass the

witness. On the other hand, simultaneous representation in unrelated matters of clients

whose interests are only economically adverse, such as representation of competing

economic enterprises in unrelated litigation, does not ordinarily constitute a conflict of

interest and thus may not require informed written consent* of the respective clients.

(D) A member who represents two or more clients shall not enter into an aggregate

settlement of the claims of or against the clients without the informed written

consent of each client.

Discussion

Rule 3-310 is not intended to prohibit a member from representing parties having

antagonistic positions on the same legal question that has arisen in different cases,

unless representation of either client would be adversely affected.

Other rules and laws may preclude making adequate disclosure under this rule. If such

disclosure is precluded, informed written consent is likewise precluded. (See, e.g.,

Business and Professions Code section 6068, subdivision (e).)

Paragraph (B) is not intended to apply to the relationship of a member to another party’s

lawyer. Such relationships are governed by rule 3-320.

Paragraph (B) is not intended to require either the disclosure of the new engagement to

a former client or the consent of the former client to the new engagement. However,

both disclosure and consent are required if paragraph (E) applies.

While paragraph (B) deals with the issues of adequate disclosure to the present client or

clients of the member’s present or past relationships to other parties or witnesses or

present interest in the subject matter of the representation, paragraph (E) is intended to

protect the confidences of another present or former client. These two paragraphs are

to apply as complementary provisions.

Paragraph (B) is intended to apply only to a member’s own relationships or interests,

unless the member knows that a partner or associate in the same firm as the member

has or had a relationship with another party or witness or has or had an interest in the

subject matter of the representation.

[2] Paragraphs (a) Subparagraphs (C)(1) and (C)(2) are intended to(b) apply to all

types of legal employmentrepresentations, including the concurrent representation of

multiple parties in litigation or in a single transaction or in some other common

enterprise or legal relationship. Examples of the latter include the formation of a

partnership for several partners* or a corporation for several shareholders, the

preparation of an ante-nuptiala pre-nuptial agreement, or joint or reciprocal wills for a

husband and wife, or the resolution of an “uncontested” marital dissolution. In such

situations, for the sake of convenience or economy, the parties may well prefer to employ

a single counsel, but a member must disclose the potential adverse aspects of such

multiple representation (e.g., Evid. Code, §962) and must obtain If a lawyer initially

represents multiple clients with the informed written consent of* as required under

paragraph (b), and circumstances later develop indicating that direct adversity exists

between the clients thereto pursuant to subparagraph (C)(1). Moreover, if the potential

adversity should become actual, the member, the lawyer must obtain the further

informed written consent* of the clients pursuant to subparagraphunder paragraph

(C)(2a).

Subparagraph (C)(3) is intended to apply to representations of clients in both litigation

and transactional matters.

[3] In State Farm Mutual Automobile Insurance Company v. Federal Insurance

Company (1999) 72 Cal.App.4th 1422 [86 Cal.Rptr.2d 20], the court held that

subparagraph (C)(3) of predecessor rule 3-310 was violated when a memberlawyer,

retained by an insurer to defend one suit, and while that suit was still pending, filed a

direct action against the same insurer in an unrelated action without securing the

insurer’s consent. Notwithstanding State Farm, subparagraph (C)(3) is not intended

toparagraph (a) does not apply with respect to the relationship between an insurer and

a memberlawyer when, in each matter, the insurer’s interest is only as an indemnity

provider and not as a direct party to the action.