It always needs to stay vigilant when acting for TWO or MORE CURRENT CLIENTS in one case.

Before intake, you should constantly be asking questions about conflict of interests.

If you consider acting for both clients in a case, where potential conflict of interest may arise, you must obtain informed consent from each client. Informed consent means you must make reasonable efforts to make full and frank disclosure to ensure that the client possesses information reasonably adequate to make an informed decision.

Certainly, such consent must be kept in writing.

Relevant rules can be found in Solicitor’s Conduct Rules, where:

…

11   Conflict of duties concerning current clients

• 11.1  A solicitor and a law practice must avoid conflicts between the duties owed to two or more current clients, except where permitted by this Rule.
• 11.2  Duty of Loyalty If a solicitor or a law practice seeks to act for two or more clients in the same or related matters where the clients’ interests are adverse and there is a conflict or potential conflict of the duties to act in the best interests of each client, the solicitor or law practice must not act, except where permitted by Rule 11.3.
• 11.3  Where a solicitor or law practice seeks to act in the circumstances specified in Rule 11.2, the solicitor or law practice may, subject always to each solicitor discharging their duty to act in the best interests of their client, only act if each client:
  • 11.3.1  is aware that the solicitor or law practice is also acting for another client, and
  • 11.3.2  has given informed consent to the solicitor or law practice so acting.
• 11.4  Duty of Confidentiality In addition to the requirements of Rule 11.3, where a solicitor or law practice is in possession of information which is confidential to a client (the first client) which might reasonably be concluded to be material to another client’s current matter and detrimental to the interests of the first client if disclosed, there is a conflict of duties and the solicitor and the solicitor’s law practice must not act for the other client, except as follows:
  • 11.4.1  a solicitor may act where there is a conflict of duties arising from the possession of confidential information, where each client has given informed consent to the solicitor acting for another client, and
  • 11.4.2  a law practice (and the solicitors concerned) may act where there is a conflict of duties arising from the possession of confidential information where an effective information barrier has been established.
• 11.5  Actual conflict arising between current clients in the course of a matter If a solicitor or a law practice acts for more than one client in a matter and, during the course of the conduct of that matter, an actual conflict arises between the duties owed to two or more of those clients, the solicitor or law practice may only continue to act for one of the clients (or a group of clients between whom there is no conflict) provided the duty of confidentiality to other client(s) is not put at risk and the parties have given informed consent.

For more information:

https://www.legislation.nsw.gov.au/view/html/inforce/current/sl-2015-0244#sec.11