Exploiting Loopholes: How UK Law Firms Navigate Dual Representation and Conflicts of Interest

Why conflicts matter

A client does not instruct a solicitor on the assumption that loyalty is temporary, confidentiality is porous, or the firm may later use its knowledge of the client’s affairs to assist an opponent. The solicitor-client relationship depends on a simple expectation: the client can speak openly because the lawyer is independent, competent and bound by professional duties.

That expectation becomes fragile where a firm has acted for one person, then later acts for someone with an interest adverse to that person. The new matter may be different. The old retainer may have ended. The new team may say it has not seen the old file. The firm may say the rules permit it. Those points can matter, but they do not end the ethical enquiry.

The public-confidence issue is whether the firm has treated conflict analysis as a live professional duty or as a box to be managed after the commercial decision has already been made. A conflict system that exists only to justify the instruction is not the same as a conflict system designed to protect clients.

The regulatory frame

The SRA Principles require those regulated by the SRA to act in ways that uphold the rule of law and proper administration of justice, uphold public trust and confidence, act with independence, honesty and integrity, encourage equality, diversity and inclusion, and act in each client’s best interests. The SRA also states that where principles conflict, those safeguarding the wider public interest take precedence over an individual client’s interests.

The SRA Code of Conduct then deals directly with conflicts, confidentiality and disclosure. It says that solicitors must not act if there is an own-interest conflict or significant risk of one. It also says they must not act in relation to a matter where there is a conflict of interest or a significant risk of one unless the relevant exception and conditions are satisfied.

Those conditions are not casual. Where the code permits acting for more than one client in limited circumstances, informed consent must be given or evidenced in writing, effective safeguards must protect confidential information where appropriate, and the solicitor must be satisfied that it is reasonable to act for all clients.

Timing and retainer closure

One recurring concern is the use of timing. A firm may argue that a previous retainer has ended, meaning the former client is no longer a current client. That distinction can be relevant because the duties owed to current and former clients are not identical. But timing should not be treated as a magic switch.

Retainer closure should be evidenced. A client should be told when the matter has ended, what the firm’s continuing obligations are, what documents remain held, what confidential information exists, what file-retention policy applies, and whether any future instruction may require conflict review. Where the end of the retainer is unclear, relying on closure as a conflict answer becomes weaker.

The deeper question is whether the firm has retained confidential information material to the new matter. If it has, the conflict analysis cannot stop at “the old matter is closed”. Former-client confidentiality remains a live duty. The issue becomes whether the new matter is adverse, whether the information is material, whether there is any real risk of disclosure, and whether the former client has given informed written consent where that is the route relied upon.

Former-client confidentiality

Former-client conflicts are often misunderstood because the client may focus on loyalty while the firm focuses on confidentiality. A former client may feel betrayed because the firm is now acting for an opponent. The regulatory test may focus more closely on whether the firm holds confidential information material to the new matter and whether effective measures remove any real risk of disclosure.

That does not make the concern trivial. Confidential information may include financial background, commercial objectives, family circumstances, asset planning, litigation appetite, health information, settlement priorities, business structure, risk tolerance, personal vulnerabilities or internal documents. Information acquired in one context can become valuable in another.

Information barriers may assist, but they are not decorative. A real barrier should address file access, electronic permissions, team separation, supervision, training, audit logs, communications, profit-sharing concerns, escalation routes and sanctions for breach. A firm should not simply assert that an ethical screen exists. It should be able to show what the screen is, when it was created, who is inside it, who is outside it, what information is protected and how compliance is monitored.

Consent and safeguards

Informed consent is not the same as a signature on a dense form. Consent must be meaningful. A client should understand the conflict, the risk, the information issue, the alternatives, the possible disadvantage, the proposed safeguards and the right to decline. Where a client is vulnerable, under pressure or reliant on the firm, the quality of the explanation matters even more.

A firm that relies on informed consent should be able to answer direct questions. What exactly was disclosed? Which clients consented? Was consent given before the firm acted? Was it evidenced in writing? Were the clients told they could seek independent advice? Did the firm explain what another unconflicted adviser could do differently? Were confidential information safeguards explained in practical terms?

Consent cannot cure every problem. There may be matters where it is not reasonable to act even if the clients say they agree. A professional judgment is still required. The firm must ask whether the instruction can be carried out competently, independently and without undermining trust in the administration of justice.

SARs and data handling

Conflicts of interest can also arise when legal disputes overlap with data protection requests. A subject access request may be used to understand what information a firm, landlord, employer, public body or other controller holds. The right of access gives individuals the right to obtain a copy of their personal information and supplementary information about its use.

Where a solicitor who acted in a disputed matter becomes involved in handling, filtering or advising on a SAR connected to that dispute, role clarity matters. Is the solicitor acting for the controller, advising on exemptions, processing the request, reviewing documents, or making tactical decisions in the underlying dispute? Does the solicitor hold confidential information from another client or former client? Is there a risk that SAR handling becomes part of the adversarial strategy rather than a rights-compliance exercise?

The ICO’s guidance is clear that controllers remain responsible for complying with SARs. If a processor is used, there must be a contractual arrangement that enables proper handling of the request and requires the processor to help meet SAR obligations. In legal-sector disputes, that control structure should be especially clear because SARs may overlap with privilege, confidentiality, third-party data and live litigation.

The regulatory gap

The most serious trust problem is not that the rules are empty. They are not. The difficulty is that conflict decisions are often made privately, inside firms, before the client understands the risk. The affected former client may not know what information the firm holds, what conflict search was run, what safeguards were created, or whether anyone independent reviewed the position.

That creates a public-confidence gap. A firm can insist that it complied. The client can suspect that loyalty was sacrificed. The regulator may only see the issue after a complaint. By then, the disputed instruction may already have affected negotiations, litigation, data handling, settlement pressure or access to justice.

Reform does not require treating every former-client concern as misconduct. It requires more visible discipline. Firms should be expected to keep conflict reasoning that can be audited, explain decisions clearly where appropriate, preserve evidence of consent, and recognise when the safer and more ethical answer is to decline the instruction.

The evidence test

The practical test is simple: can the firm prove that the conflict was properly identified, analysed and controlled before the instruction proceeded? If the answer is no, the risk is not merely regulatory. It is reputational and ethical.

Clients and former clients should also approach the issue through evidence. The useful records are usually the retainer letter, closing letter, file note, consent document, privacy notice, SAR response, complaint correspondence, conflict explanation, chronology and the specific documents said to show material confidential information. General suspicion is rarely enough. A disciplined paper trail is stronger.