California Bar Journal
OFFICIAL PUBLICATION OF THE STATE BAR OF CALIFORNIA - DECEMBER 1999
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MCLE SELF-STUDY

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Self-Assessment Test
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Answer the following questions after reading the MCLE article on conflicts of interest. Use the answer form provided to send the test, along with a $20 processing fee, to the State Bar. Please allow at least eight weeks for MCLE certificates to reach you in the mail.

1. A lawyer's duty of loyalty to an independent subsidiary or constituent does not extend to the parent corporation absent a unity of interest or unless one is the alter ego of another.

2. A law firm which serves as "monitoring counsel" for Company's insurance underwriters regarding claims against Company may be enjoined from representing Adverse Party against Company if the claims are substantially related to the work performed as monitoring counsel.

3. The conflict of interest analysis regarding the representation of an insured upon appointment by an insurance company is identical to the corporate parent/subsidiary analysis.

4. If an insurance company has issued no reservation of rights and has appointed a lawyer to represent the interests of its insured, lawyer has no attorney-client relationship with the insurer.

5. Lawyers often have closer ties with the insurer than with the insured since the insurer characteristically engages and pays the attorney to defend the insured and since it is customary for the insurer to control the defense it provides.

6. When a lawyer is appointed to represent the interests of the insured, courts have prohibited insurance companies from asserting the attorney-client privilege under Evidence Code 954 as a client.

7. An insurance company has no standing to bring a legal malpractice action against the counsel it hired to defend its insured.

8. An insurer that has retained counsel to represent the interests of its insured is entitled to expect counsel to fulfill a lawyer's professional duties owed to the insurer as well.

9. In a successive attorney-client relationship case, the primary value at stake is confidentiality.

10. The "substantial relationship test" is applied whenever the duty of loyalty is the primary value within the conflict of interest analysis.

11. Where a lawyer represents one client in a matter that is adverse to the interests of another current client, the primary value at stake is undivided loyalty.

12. An aspect of the duty of undivided loyalty is "to protect the client in every possible way."

13. Even where the cases are unrelated and there is no danger of confidential information being used or disclosed, it is a violation of the duty of loyalty for the attorney to assume a position adverse or antagonistic to a client without the client's free and intelligent consent given after full knowledge of all the facts and circumstances.

14. If Lawyer's engagement for Client X terminates fortuitously after Lawyer files an action against Client X on behalf of ABC Corp. and before Client X moves to disqualify Lawyer, Lawyer will not be disqualified because the matter is moot.

15. California has adopted the "hot potato" rule, holding that it is a breach of the duty of loyalty to withdraw from the representation of a current client in order to accept representation of another more lucrative client that is adverse to the dropped client.

16. One exception to the automatic disqualification rule in concurrent representation of adverse interest cases is if, upon discovery and absent consent, a lawyer immediately withdraws from an unseen concurrent adverse representation which occurred by "mere happenstance."

17. An attorney has been permitted to withdraw as a means of escaping application of the per se disqualification rule where the concurrent representation arose as a result of an acquisition of the client by another company and where the lawyer played no role in creating the conflict of interest.

18. Unreasonable delay in bringing a motion for disqualification in a successive representation situation can prevent disqualification if the delay caused prejudice to the present client and if the delay was extreme in terms of time and consequence.

19. Implied consent to adverse representation by conduct other than delay is never a possible defense to disqualification in successive representation cases.

20. If implied consent is a defense to disqualification, it has never been a defense in a concurrent representation of adverse interests of current clients.

CERTIFICATION

This activity has been approved for Minimum Continuing Legal Education credit by the State Bar of California in the amount of 1 hour, of which 1 hour will apply to legal ethics.

The State Bar of California certifies that this activity conforms to the standards for approved education activities prescribed by the rules and regulations of the State Bar of California governing minimum continuing legal education.