Conflicts of Interest Can Lead to Disgorgement of Fees

Anytime an attorney represents more than one client in a matter where there is a potential for a conflict of interest, it is critical that the attorney obtain informed written consent to proceed with the representation pursuant to CRPC, Rule 3-310. Failure to evaluate and properly address conflicts of interest can result in disgorgement of fees.  See, Sheppard, Mullin v. J-M Manufacturing (2016) 244 Cal.App.4th 590.  Boilerplate conflict waivers are not sufficient.  The attorney must provide “informed written consent” which requires a description of the factual scenario creating the potential (or actual) conflict of interest.  It has always been important to evaluate conflicts of interest, but now there is clear precedent supporting an order for disgorgement of fees.