Conflicts of Interest

Legal Services > Conflicts of Interest

Conflicts of interest are one of the most commonly tested topics in SQE1 Legal Services. You need to recognise when a conflict arises, understand the two categories, and know the limited exceptions that allow a solicitor to continue acting. Missing the distinction between the two exceptions is a classic trap that costs candidates marks.

What Is a Conflict of Interest in SQE1?

A conflict of interest arises when a solicitor's duty to act in the best interests of one client conflicts with the solicitor's own interests or with the interests of another client. The SRA Code of Conduct identifies two distinct types: own interest conflicts and client conflicts. The purpose of the rules is to ensure that solicitors can give independent, uncompromised advice to every client. Where a conflict exists (or a significant risk of one), the solicitor must not act unless a specific exception applies.

Understanding conflicts of interest is essential to navigating professional conduct scenarios and real transactions. Conflicts questions appear frequently in SQE1, particularly in the context of property transactions and multi-party work, and they also embed themselves in questions on other practice areas.

This topic is closely linked to duties to clients and forms a key part of the Legal Services syllabus for SQE1.

Key Principles for SQE1

Own Interest Conflicts: A conflict between the solicitor's own interests and the interests of a client. Paragraph 6.1 of the SRA Code of Conduct for Solicitors is absolute: there is NO exception. The solicitor must not act, regardless of the client's consent.
Client Conflicts: A conflict between the interests of two or more current clients. Paragraph 6.2 provides for two limited exceptions that may permit acting if strict conditions are met.
Exception 1: Substantially Common Interest: The clients share a common interest in a matter. The solicitor can act if satisfied it is reasonable to do so, all clients give informed written consent, and effective safeguards are in place (such as information barriers).
Exception 2: Competing for the Same Objective: The clients are competing for the same objective (e.g., rival bidders for the same property). The solicitor can act if the clients have given informed written consent, there is no other client conflict, the firm puts effective safeguards in place, and it is reasonable to act.
Informed Consent: Clients must understand the relevant issues and the risks of the solicitor acting despite the conflict. Generic consent is not enough; the consent must be specific to the conflict identified.
Effective Safeguards: These typically include information barriers (sometimes called 'Chinese walls'), separate teams, separate file access, and restrictions on communication between team members dealing with each party.
Continuous Monitoring: A solicitor must monitor for conflicts throughout the retainer, not just at the outset. A conflict can arise at any stage, and new conflicts can require the solicitor to cease acting immediately.

Exam tip

Own interest conflicts are absolute—no consent exception, no safeguards exception. Client conflicts have two exceptions: substantially common interest (shared objective) or competing for the same objective (rivals). The trap: students conflate these exceptions. Substantially common interest requires a shared goal; competing for the same objective applies to rivals bidding for the same thing. Learn the distinction.

How This Appears in SQE1 Questions

SQE1 questions present scenarios with two clients and ask whether the solicitor can act. The key trap is conflating the two exceptions—substantially common interest requires a shared objective, while competing for the same objective involves rival interests. Another frequent trap is suggesting a solicitor can act in an own interest conflict with the client's consent—there is no consent exception for own interest conflicts. Watch also for scenarios involving former clients where confidential information is at risk.

A solicitor acts for both the buyer and the seller in a residential property transaction. Both parties are aware and have given written consent. Midway through the transaction, a boundary dispute emerges between them.

This is a classic SQE1 trap.

Common Mistakes Students Make

Believing client consent overcomes an own interest conflict—it does not; there is no exception for own interest conflicts.
Confusing substantially common interest with competing for the same objective—they are different exceptions with different requirements.
Forgetting to monitor for conflicts throughout the retainer, not just at the start. A conflict can arise at any time.
Overlooking duties to former clients—confidential information from a previous retainer must be protected even after the retainer has ended.

Quick Summary

Own interest conflicts (paragraph 6.1): conflict between solicitor's interests and client's interests—NO EXCEPTION, solicitor must not act.
Client conflicts (paragraph 6.2): conflict between two or more current clients—two exceptions may permit acting.
Exception 1: substantially common interest—clients share a common objective; requires informed written consent and effective safeguards.
Exception 2: competing for the same objective—clients are rivals (e.g. rival bidders); requires consent, no other conflict, safeguards and reasonableness.
Conflicts must be monitored throughout the retainer, not just at outset; new conflicts can arise.
Former client conflicts: solicitor must not act against former client if confidential information from previous retainer is material to new matter.

Want to test this now? Try a few SQE1-style questions below before moving on.

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Practise Conflicts of Interest Questions for SQE1

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Conflicts of Interest for SQE1