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What is a Legal Information Barrier?

What is a Legal Information Barrier?

A legal information barrier is often used in law firms to ensure that a conflict of interest does not arise. Find out how it works here.

10th October 2019

When law firms merge or when partners move from one firm to another, they do so often bringing clients along. This causes a potential conflict of interest, occasioning the need for a competent legal information barrier. But what is a legal information barrier? This article discusses what a legal information barrier is and how it arises.

What is it?

An information barrier is an arrangement designed by organisations to prevent the flow of information from one department to the other. It prevents communication between separate departments that may lead to a conflict of interest. As a result, a legal information barrier prevents the flow of information between different departments or teams within a law firm, say Civil and Criminal or different teams of lawyers representing different clients. It is therefore a way of managing risks.

The Law Society of New South Wales Information Guidelines governs the use of information barriers.

Scenarios

A law firm acting for multiple clients in the same or a related matter

A law firm may act for multiple clients in the same or related matter. This usually arises where a separate team of lawyer acts for each client. When this happens, an information barrier must be built between them to prevent the flow of information. For example, Team A manages Client A and Team B manages Client B. Client A and Client B have an opposite stance on the matter. As a result, the law firm may have a potential conflict of interest. A law firm may only do this if they have the informed consent of both clients allowing them to represent both sides of the coin.

This may prove difficult where a situation arises where a lawyer possesses detrimental confidential information of Client A that is material to Client B’s interest. In this case, the lawyer may not act in Client B’s interest unless Client A expressly gives consent to do so.

Essentially, a lawyer must obtain a fully informed consent from each client before acting.

A law firm acting against a former client

Generally, the fiduciary duty between a lawyer and their client ends when their attorney-client relationship ends (e.g. when the contract ends because the case/service is over). However, there is still an ongoing duty of confidentiality by the lawyer. As a result, a lawyer that possesses confidential information is recommended to not be involved in the present matter at all.

Overriding Duty

However, there is an overriding duty that lawyers ensure the lawful, proper, and efficient administration of justice. The existence of a legal information barrier does not release a lawyer from this duty. As “officers of the Court”, it gives the Court power to ensure that everything is fair. This includes restraining a lawyer from acting against his former client if need so.

Final Thoughts

To manage risks regarding potential conflict of interests, many firms erect a legal information barrier. Its primary function is to make sure information does not flow between separate departments or teams of lawyers representing clients with adverse interest with one another. As a result, an effective legal information barrier is dependent on the lawyers practicing it themselves.

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Author
Ryan Tjahjono

Ryan currently works in the content team as a Legal Intern for Lawpath. He is in his third year of a Bachelor of Law and Business degree at UTS.