Conflict of interest failures are among the most common compliance breaches seen by the SRA, and among the most damaging to client relationships. When a law firm acts for parties with opposing interests — or where a solicitor’s own interests conflict with those of the client — the consequences can include disciplinary action, civil liability, and the breakdown of trust that is fundamental to the solicitor-client relationship.

The SRA Standards and Regulations set clear rules on conflicts of interest, but the application of those rules in practice is nuanced and demands a combination of good systems, sound judgement, and a firm-wide culture that treats conflict checking as a professional obligation, not a bureaucratic inconvenience.

This guide covers the SRA’s conflict rules in detail, explains how to implement effective checking systems, and addresses the common situations where solicitors most frequently go wrong.

The SRA Rules on Conflict of Interest

Two Types of Conflict

The SRA’s conflict rules, set out in Rules 6.1 to 6.2 of the Code of Conduct for Solicitors, distinguish between two types of conflict:

Own interest conflicts arise where the solicitor’s personal interests — financial, personal, or professional — conflict with the duty they owe to the client. The prohibition on own interest conflicts is absolute: you must never act where there is a conflict between your own interests and those of a current client.

Client conflicts arise where there is a conflict (or significant risk of a conflict) between the interests of two or more current clients. The prohibition on client conflicts is similarly absolute: you must never act where there is a conflict between the interests of two or more current clients, except in the limited circumstances where the “substantially common interest” or “competing for the same objective” exceptions apply.

Own Interest Conflicts in Practice

Own interest conflicts are more common than solicitors sometimes assume. They arise in situations such as:

A solicitor acting for a company in which they hold shares
A solicitor acting for a family member on a transaction where the solicitor’s interests as a family member might conflict with their duty as a solicitor
A solicitor receiving a commission or referral fee from a third party that has an interest in the outcome of the client’s matter
A solicitor acting for a client in a claim against a former client, where the solicitor has confidential information from the former retainer
A solicitor who has given a personal guarantee for the firm’s liabilities in a matter where their personal financial interest might affect their advice

The prohibition on own interest conflicts is absolute. There is no exception, no matter how well-intentioned the solicitor or how sophisticated the client. If you have an own interest conflict, you must decline the instruction.

Client Conflicts: The Prohibitions

The default position under Rule 6.2 is clear: you must not act where there is a conflict, or a significant risk of a conflict, between the interests of two or more current clients. The word “significant” does the regulatory work here — minor, theoretical, or remote conflicts do not automatically prevent a firm from acting, but a conflict that a reasonable person would regard as substantial does.

Common examples of prohibited client conflicts include:

Acting for both buyer and seller in a commercial property transaction (save in the narrow circumstances of the residential conveyancing exception)
Acting for a company and a director personally in a matter where their interests might diverge
Acting for co-defendants in a criminal matter where their defences are or may become inconsistent
Acting for both parties in a matrimonial dispute (save in truly uncontested matters)
Acting for a lender and a borrower in a commercial transaction where the loan terms are not straightforward

The Substantially Common Interest Exception

Rule 6.2 provides two exceptions to the prohibition on client conflicts. The first — the “substantially common interest” exception — applies where the clients share a substantially common interest in the matter, and each client has given informed consent in writing (after a summary of the situation has been given to them), and the solicitor is satisfied that it is reasonable to act for both.

This exception is available in some residential conveyancing transactions (subject to additional conditions), in some corporate transactions involving multiple clients with genuinely aligned interests, and in some joint venture formations. It is not a blanket permission to act in any transaction where the clients are both broadly supportive of the outcome — the interests must be substantially common, not merely non-adverse at the outset.

The Competing for the Same Objective Exception

The second exception applies where the clients are competing for the same objective — for example, both bidding for the same property at auction — and each has given informed written consent to the firm acting for both. This exception is used relatively infrequently and requires careful assessment of whether the conflict is truly limited to the competitive element of the transaction.

Implementing an Effective Conflict Checking System

Why Manual Checks Are Not Enough

Many firms, particularly smaller ones, still rely on ad-hoc conflict checks — a solicitor thinking about whether they recognise the client’s name or the other side’s solicitor, or asking around the office. This approach is dangerously inadequate. Human memory is unreliable, particularly in a firm that has been operating for years and has thousands of former clients and matters in its history.

The SRA has seen numerous cases where a conflict was not identified because the checking process was informal. The consequences range from having to withdraw from a matter (embarrassing and potentially costly) to disciplinary action for acting with a conflict that could have been identified had the firm’s systems been adequate.

The Core Components of a Good Conflict System

An effective conflict checking system for a UK law firm has the following components:

A searchable database of all clients and matters

The system must capture every client and every matter, going back at least 12 years (the limitation period for some claims). Each record should include:

The client’s full name and any trading names or aliases
The names of related parties — counterparties, beneficiaries, directors, guarantors
The matter type and practice area
The status of the matter (open, closed, archived)

In most modern practice management systems, this data is captured as a matter of course. The challenge is in older data — matters handled before the current system was in place, or client information imported from a legacy system — which may not be consistently searchable.

A standardised intake process

Conflict checks must be conducted at the point of instruction, before any work is commenced. The check should be:

Triggered automatically by the new matter intake process
Conducted against the full database, not just open matters
Extended to cover related parties and connected interests, not just the client’s own name

A new matter intake form that prompts the fee earner to identify all relevant parties — client, counterparties, beneficiaries, directors of corporate clients, third party funders — ensures that the conflict check is as comprehensive as possible.

A documented record of every check

The fact that a conflict check was conducted must be recorded. This serves two purposes: it demonstrates to the SRA (if they ever ask) that the firm conducts checks, and it provides a basis for investigation if a conflict subsequently comes to light. A check record should note who conducted the check, when it was conducted, what parties were searched, and the outcome.

A clear escalation process

When a potential conflict is identified, the fee earner should refer the matter to the COLP or a designated conflicts partner rather than resolving it themselves. The conflicts partner can assess whether the potential conflict is real, whether an exception applies, and (if necessary) whether the firm must decline or withdraw.

Lateral Hires and Mergers

One of the most complex conflict scenarios arises when a firm recruits a lateral hire from another firm, or merges with another practice. The lateral hire brings with them knowledge of their former clients’ matters — which may include counterparties or former clients of the new firm.

Best practice on a lateral hire is to conduct a conflict check before the offer is finalised, using an appropriate protocol that does not require the hire to disclose confidential information about their former clients. This typically involves the hire providing a list of the matters they have worked on (without confidential details) for comparison against the new firm’s database. Where conflicts are identified, the firm and the hire need to agree on appropriate ethical walls or, in some cases, recognise that the conflict is irresolvable.

Common Problem Areas

The Buyer and Seller in Conveyancing

Residential conveyancing is the most frequently cited context for conflict failures. The Law Society’s practice notes on conflict of interest in conveyancing — which the SRA treats as indicative of good practice — restrict the circumstances in which a firm can act for both buyer and seller to specific situations: same firm acting for both parties in a simple transaction where the price is agreed, there is no structural survey, and there is no linked transaction.

Even within these limits, many firms adopt a blanket policy of never acting for both buyer and seller in a residential transaction. This removes the risk of the exception being applied incorrectly and gives the firm a clear, defensible position.

Lender and Borrower

Acting for both a lender and a borrower — typically a mortgage lender and a residential buyer — is permitted under the CML/UK Finance Lenders’ Handbook, subject to strict conditions. The firm must comply with the Lenders’ Handbook requirements for the lender in addition to its duties to the borrower, and must report any material discrepancy between the borrower’s instructions and the lender’s requirements. A conflict that cannot be resolved by reporting must result in withdrawal from one or both retainers.

Corporate Transactions

In M&A transactions, private equity deals, and corporate restructurings, the same firm sometimes acts for multiple parties — for example, the company and its directors, or a buyer and a seller who want a quick, low-cost transaction. These instructions require careful conflict analysis. The interests of a company and its directors can diverge sharply in a distressed sale or insolvency-adjacent transaction. The COLP and the lead partner on the transaction should conduct a written conflict analysis before accepting these instructions.

Former Clients

The conflict rules apply to current clients, not former clients — but the duty of confidentiality to former clients can create an effective conflict by preventing you from using confidential information you hold from the former retainer. Rule 6.3 of the Code requires that you do not act against a former client if you hold confidential information from the former retainer that is material to the new matter, unless the former client consents.

Training and Culture

Making Conflict Checking a Professional Value

Systems alone do not prevent conflict failures. Solicitors who regard conflict checking as a procedural hurdle — something to complete quickly before getting on with the legal work — will find ways to minimise it. The firm’s leadership needs to model and communicate the importance of conflict checking as a professional and ethical obligation.

This means:

Including conflict checking in induction training for all new joiners
Regularly reviewing conflict-related issues in team meetings or compliance updates
Celebrating cases where a potential conflict was identified and properly managed, rather than treating them as near-misses to be hushed up
Having a genuine no-blame culture around raising potential conflicts — fee earners who are penalised for identifying conflicts will stop identifying them

Annual Review of Conflict Systems

The COLP should conduct an annual review of the firm’s conflict checking systems, looking at the number of conflicts identified, the quality of the documentation, and any instances where a conflict was identified late (after work had commenced). Late identifications in particular warrant investigation: why was the conflict not caught at the intake stage, and what change to the intake process would prevent a recurrence?

Obiter integrates with the new client intake workflow to automate conflict check prompts, ensure related parties are identified, and record check outcomes in the matter file. Fee earners get a prompt at the point of opening a new matter, and the COLP has a complete audit trail of checks conducted. It is one of several ways Obiter reduces the administrative burden of compliance without reducing its rigour. Find out more at obiteros.com.

Conflict of Interest Checks: Best Practices for UK Solicitors