A US District Court judge sitting in the central California district ruled that the creation of Chinese walls is not always sufficient to prevent a law firm or individual lawyers from being disqualified from acting on a matter where there is a potential conflict.

Ethics screens

According to a report in Bloomberg news agency’s legal affairs web site, Judge Cormac Carney ruled that a so-called ethics screen ‘does not prevent a firm’s imputed disqualification when a lawyer in the firm has key confidential information from work at another firm’.
The specific case involved two lawyers – one from large Los Angeles-based international firm Paul Hastings, and the other from California niche litigation practice Eagan Avenatti. Both had practised at Paul Hastings – where they had been close friends and colleagues on the same corporate client file -- before one moved to the smaller firm.
After the move, the two lawyers found themselves on the opposite sides of a dispute involving that same corporate client.

Varying conclusions

According to the news agency report, apart from ruling that general law firm Chinese walls can be problematic, the judge found specifically in this case that ‘even if screening were accepted, the procedures implemented here were inadequate to prevent vicarious disqualification because they were not set up quickly enough, the former client was not notified of the screen in writing, and the lawyer’s new firm is a small one’.
The report went on to describe the ruling as illustrating ‘that courts in California continue to reach varying conclusions on whether screening can prevent imputation of lateral conflicts’.