Thomas F. Maffei quoted at length in MLW article on Superior Court ruling on conflict waiver dispute

November 23, 2021

Thomas F. Maffei, of counsel in the firm’s Litigation Department, was quoted in Massachusetts Lawyers Weekly (MLW) on November 18, 2021. The article, “Client must arbitrate dispute over conflict waiver,” covers a recent ruling requiring a Wellesley investment company to arbitrate a claim for injunctive relief to bar its former law firm from representing adverse parties in a shareholder suit as allegedly permitted by a conflict waiver provision in the firm’s engagement letter.

Read the full article at (subscriber content).

From the article:

“The ruling illustrates how joint representation can be ‘fraught with peril,’ observed Boston professional liability attorney Thomas F. Maffei.

‘You really can’t represent two parties who are involved in the same controversy without making the determination that you can adequately represent the interests of both parties jointly, explaining to the client all the pros and cons of the joint representation and getting the client to sign off on it,’ Maffei said. ‘Joint representations should be avoided unless it is crystal clear there is no possibility of a conflict of interest.’

Maffei said so-called ‘advance waivers’ of potential conflicts, like the one at issue in Drake Partners, are becoming more common in the business context.

‘Most of the courts that have interpreted the law on this issue have said advance waivers can be effective, but they are not bullet proof,’ Maffei said. ‘You need to investigate what disclosure was made about the potential adverse matters that might come up that you now want the client to agree to let you take against them.’

According to Maffei, that is problematic given the difficulty in most instances of accurately predicting the ‘list of horribles’ that could give rise to an adverse relationship.

‘Whenever an advance waiver is held not to be effective, it’s because the court or disciplinary authority find that there wasn’t enough disclosure,’ Maffei said. ‘Yes, the client signed the advance waiver, but it really didn’t tell the client what that all meant.’

In sending to arbitration the parties’ dispute over Wilson Sonsini possibly appearing on behalf of an adverse party in Drake’s shareholder action, Maffei said the judge likely reached the right conclusion on one basis: the sophistication of the parties.

‘If these parties weren’t as sophisticated as the judge ruled that they are, this would have had trouble passing muster,’ he said. ‘These were sophisticated business people. They knew the difference between arbitration and litigation.'”