What is a “Chinese Wall Rule” in legal terms?

  • July 22, 2021
  • Blog

The Virginia Supreme Court adopted a provision in the Rules of Professional Conduct, and it’s opened up the opportunity for attorneys to serve more injured people.

woman crying after car accident and a man calming her down

Under the old rules, when an attorney met with a prospective client and decided not to accept the case – or the prospective client decided not to employ the attorney – there was an ethical risk if later another person involved in the same matter came to the attorney and sought representation. The concern was that the attorney may have learned something from the interview with the first prospective client that could be of advantage in representing the second prospective client, and might be used against the first client’s interests.

For example, let’s say a truck driver involved in a wreck approached an attorney at Allen & Allen for representation. If that truck driver is at fault, the lawyer might turn down their case. Later on, the person that the truck driver hit might contact the lawyer, and the lawyer would like to represent that person for the case. Under the previous rules, if the truck driver had told the attorney any confidential information, that attorney would be forbidden to represent the second prospective client.

Furthermore, the Virginia State Bar had adopted the position that if one attorney in a firm was “conflicted out,” all attorneys in the firm were forbidden to undertake that case. The situation could be addressed only if all of the potential parties agreed to waive any conflict – an understandably rare occurrence.

lawyers eavesdropping on a conversation

How does a “Chinese Wall” help to avoid conflict of interest?

The “Chinese Wall Rule” is used by other states, and offers a solution to this conflict.  If one attorney in a law firm obtained confidential information from a possible client and did not end up representing that potential client, then another attorney in the same firm could represent the second client under these conditions:

  • The attorneys could not discuss the matter or have any access to any of the information that the first attorney received from the potential client, and
  • The conflicted attorney could not work on the case or communicate with the other attorneys on that matter.

With the adoption of Rule 1:18, the Virginia Supreme Court has adopted the  “Chinese Wall” approach.  Now, so long as the attorney is strictly screened from any work on – or contact with attorneys working on – the case, a conflicted attorney will not prevent other lawyers in the firm from representing an alternate party involved in the case.  Also, written notice of the screen must be sent to the former prospective client as soon as practicable.

Are there cases in which the Chinese Wall Rule doesn’t apply?

If a prospective client sends confidential information to an attorney in a situation where the prospective client could not reasonably expect confidentiality or privacy, then Rule 1:18 states that the conflict rule does not apply, so that a “Chinese Wall” needn’t be created.

loud cocktail party diversity

For instance, if a potential client discusses their legal problem in a loud conversation with friends at a cocktail party, and one of the friends happens to be a lawyer, then this conversation does not create any reasonable expectation of privacy or confidentiality, and the rule does not apply. Similarly, if a lawyer’s website has a disclaimer stating any information sent will not be treated confidentially, and if a prospective client sends information before a confidential relationship is established, then the prospective client has no reasonable expectation of privacy, and again the rule does not apply.

Rule 1:18 does give attorneys another method for preventing themselves from being conflicted.  When first meeting with a prospective client, an attorney can draft a document telling the client that any information the client provides during the meeting will not stop Virginia attorneys & law firms from representing someone adverse to the client. The document also informs the client that anything he or she says can be used by the lawyer in a suit against the client. If the prospective client agrees, this document will be valid and absolve the lawyer of any potential conflict.

As a practical matter, however, it’s unlikely that an attorney would do this except perhaps in a commercial matter. In a personal injury matter, most clients would be troubled and confused by an attorney who asks them to waive confidentiality in the first meeting. Most attorneys would never ask for this.

If you or a loved one have been injured in an accident through no fault of your own, you may be entitled to compensation. Call Allen & Allen for a free consultation today, at 866-388-1307.