Shanghai Bar Association, Determination and Handling of Conflicts of Interest in Law Practice Rules (Trial Implementation)

Issued: February 7 2002
Effective: May 1 2002
Interpreting authority: Management Committee of the Shanghai Bar Association
Applicability: The Rules apply to law firms, group law firms and their offices registered with the Shanghai Judicial Bureau (Article 5).

Main contents: A conflict of interest occurs in respect of a law firm where there is an interest between the law firm or its associates and a client or potential client or between two of its clients or between a client and potential client such that when the law firm acts for a client or potential client it will inevitably (in the case of direct conflict of interest) or may (in the case of indirect conflict of interest) act against the interests of certain other clients or potential clients (Articles 7 and 8). The Rules list instances of such conflicts of interests (Articles 9 and 10). A law firm shall not agree to act for a client if such action will give rise to a direct conflict of interests and shall exercise due care should the client grant a written waiver (Article 11). It may, however, act for the client if the conflict of interest is not a direct one and the client grants a written waiver, except where a breach of confidentiality in respect of a prior client may or will occur in so acting (Articles 13 and 14). When the law firm acts with a waiver from the client, it shall take steps to prevent information exchange and disclosure among associates who are in the circumstances of indirect conflict of interest (Article 15). A law firm shall establish an internal system to verify the existence of conflicts of interests (Article 21). The Bar Association has the power to investigate and punish any breach of the Rules (Article 26).