Risk & Conflicts Reading — Dual Representation Raises Conflicts Concerns, Judge Caught via AI Hallucinations, Representational Conflict Considered

David Kluft always spots great stuff: “If the state indicts my law partner, can I represent the state in another matter?” —

• “A NJ plaintiff brought employment-related civil claims against NJ state agencies, and the state hired a law firm to represent it.”
• “While the case was still ongoing, a firm partner who had an appearance in the case was indicted for alleged fraud in connection with the Camden waterfront development.”
• “The indicted partner withdrew from the employment case, but the plaintiff claimed the whole firm should be disqualified because it could not be adverse to the government while representing it.”
• “The NJ Appellate Division held that, even assuming the indicted partner had a personal conflict of interest with the state, personal interest conflicts are not imputed to the other firm lawyers. Denial of Disqualification affirmed.”
• Decision: here.

“Is top lawyer in Sandie Peggie tribunal facing a conflict of interest?” —

• “In March Jane Russell trotted two and a half miles on horseback through the busy streets of central London. Her journey, from a Westminster Hall ceremony to her chambers in Lincoln’s Inn Fields on a steed named Jupiter, was a celebration of her elevation to King’s Counsel, the culmination of a stellar legal career.”
• “Last week, the barrister, more accustomed to the grand surroundings of London’s High Court, found herself in a small, stiflingly stuffy tribunal hearing room in Endeavour House, Dundee. Representing both NHS Fife and the transgender doctor Beth Upton, who are opposing the nurse Sandie Peggie’s employment tribunal claim, the nondescript 19-year-old office building has quickly become the setting for the most high-profile case of Russell’s career.”
• “Questions have been raised over whether the lawyer, who is married to a hereditary peer who is a direct descendant of the Victorian era prime minister Lord John Russell, might be faced with a conflict of interests if she is representing two clients whose positions no longer align. “
• “Peggie, an experienced nurse, has claimed to have been a victim of harassment and discrimination as a result of having to share a female changing room at Victoria Hospital, Kirkcaldy, with Upton, a biologically male doctor who identifies as female. ‘NHS Fife had separately investigated Peggie for a ‘hate incident’, after she confronted Upton for using the women’s facilities on Christmas Eve, 2023. The nurse was suspended for several months.”
• “In February, when the first public tribunal hearings took place, NHS Fife and Upton, its employee, both separately named as respondents to Peggie’s litigation, appeared to be in lockstep. Russell, representing both NHS Fife and Upton jointly in the case, set about cross examining Peggie in a line of questioning which wholly endorsed the doctor’s account.”
• “Last week, however, the positions of NHS Fife and Upton appeared to dramatically diverge.”
• “Peggie was told on Tuesday evening, hours before hearings were due to resume, that the internal NHS Fife disciplinary investigation, separate to the tribunal, had found there was ‘insufficient evidence’ to support findings of misconduct against her.”
• “As one observer noted, the situation had left Russell on Thursday leading Gillian Malone, the health board’s head of nursing, painstakingly ‘through the details’ of an allegation NHS Fife said there was not enough evidence to conclude happened, referring to the fallout of the supposed ‘hate incident’ in the changing rooms for which Peggie is now in the clear.”
• “In Scotland, the Faculty of Advocates’s rulebook states that an advocate ‘may not advise, represent or act on behalf of two or more clients in the same matter if there is a conflict, or a significant risk of conflict, between or among the interests of those clients’.”
• “The Law Society of Scotland has similar rules, while the Bar Standards Board handbook, for English barristers, states that if there is a conflict of interests between clients, they should not accept instructions unless all parties have given their informed consent to doing so. There is also a broad duty in the English rules, the ones Russell is bound by, stipulating that barristers ‘must act in the best interests of each client’.”
• “One practising lawyer, who did not want to be named, said Upton has a reputational interest to keep fighting the tribunal, and dispute Peggie’s version of events. NHS Fife, meanwhile, ‘has an interest in retaining some freedom of manoeuvre’. The lawyer added: ‘It would be extraordinary for an employer to seek to relitigate an issue on which its own internal process had cleared the employee.’”
• “‘The board’s interest in settling now looks clearer than ever, not least because maintaining public and ministerial confidence is an important consideration for the board’ they added.”
• “Jonathan Brown, an advocate at Axiom Chambers, said he was ‘bemused’ at the ‘apparent view that there is no conflict of interest between Fife Health Board and Dr Upton’.”
• “Addressing the case on X in advance of Peggie’s acquittal in the disciplinary case, he said that in his view, Russell should have refused to take on both clients. ‘One of the standard tests for conflict is whether you’d give different advice to each of two clients,’ Brown said. ‘That’s clearly the case here.’”
• “Michael Foran, who will in September become associate professor of law at the University of Oxford, said the fact that Russell was representing both clients could potentially make it harder for NHS Fife to seek to settle. ‘I can’t see how Upton could have settled this and admitted liability, but I could see NHS Fife doing that,’ he said. ‘But if they come as a joint package, then that makes it difficult.’”
• “He added: ‘The internal investigation clearing Sandie Peggie of all allegations raises serious questions about the legal approach of NHS Fife and Dr Upton, not least because it highlights a potential conflict of interest between each respondent.”
• “‘Jane Russell, counsel for both respondents, may need to consider whether it is in the best interests of both clients to share representation or for Dr Upton to obtain separate counsel, given NHS Fife has not upheld Upton’s version of events.’”
• “A spokeswoman for NHS Fife said: ‘NHS Fife is jointly represented with Dr Beth Upton in the ongoing employment tribunal proceedings, in line with standard legal practice where an employer may be vicariously liable for the actions of an employee.”
• “‘This approach has been taken following detailed legal advice and reflects the nature of the claims raised. We are satisfied there is no impermissible conflict of interest.”
• “‘The appointment of legal representation was made by the CLO, on behalf of NHS Fife, based on professional expertise and experience relevant to the case. It would be inappropriate to comment further.’”
• “In a brief statement, Russell said that she did ‘not comment on, or in connection with, cases in which I am instructed.’ She added: ‘I follow the cab rank rule.’”

“Judge Scraps Opinion After Lawyer Flags Made-Up Quotes” —

• “A New Jersey US district court judge withdrew his decision in a biopharma securities case Wednesday after lawyers complained that his opinion contained numerous errors, including made-up quotes and misstated case outcomes.”
• “Judge Julien Xavier Neals of the US District Court for the District of New Jersey on June 30 denied CorMedix Inc.’s request to dismiss a lawsuit by shareholders. ‘That opinion and order were entered in error,’ according to a notice the court posted in the case docket on Wednesday. ‘A subsequent opinion and order will follow.’”
• “Willkie Farr & Gallagher partner Andrew Lichtman, who represents CorMedix, wrote Neals on Tuesday, telling the judge he may want to ‘consider whether amendment or any other action should be taken’ in regard to errors he made in his June 30 decision.
• “Lawyers in a separate case earlier this month also pointed out flaws in Neals’ CorMedix opinion, saying it ‘contains pervasive and material inaccuracies.’”
• “The case shows a rare example of a judge being called out for the sort of elementary mistakes in legal drafting that courts have more frequently pointed out in the work of lawyers. Such flaws have come to the fore as lawyers increasingly rely on artificial intelligence to assist in case preparation, though there is no mention of AI in the complaints the attorneys have directed at Judge Neals.”
• “Neals in his June 30 denial of CorMedix’s motion to dismiss referred to the court in Dang v. Amarin Corp. as describing defendants’ conduct as ‘classic evidence of scienter,’ though that case didn’t contain the quote. He also quoted a court in a case involving tech consulting firm Intelligroup as saying that certifications by company executives became ‘false statements in their own right,’ though that quotation doesn’t exist in the case.”
• “Neals’ opinion referenced a case captioned Stichting Pensioenfonds Metaal en Techniek v. Verizon Commc’ns Inc. in the Southern District of New York, though Lichtman said no such case exists in that venue. ‘We believe the court was referring to a case with the same caption from the District of New Jersey,’ the lawyer wrote.”
• “Several lawyers have made news for AI-generated case citations that turned out to be false. Two Manhattan lawyers in 2023 were fined $5,000 for filing a ChatGPT-generated court brief. Last month, the Court of Appeals for the Fifth District of Texas imposed a $2,500 sanction against a lawyer for submitting a brief that cited non-existent cases.”
• “‘The use of AI or other technology does not excuse carelessness or failure to follow professional standards,’ the panel of judges wrote.”
• “Bruce Green, a legal ethics professor at Fordham Law School, noted that judges, too, can face sanctions for the kind of errors they find in lawyers’ work. Discipline rules state that a judge shall perform judicial and administrative duties competently and diligently, according to Green.”
• “Neals’ June 30 opinion has already influenced a parallel case also playing out in the US District Court for the District of New Jersey. That case also centers on allegations by shareholders that a biopharma company—in this instance, Outlook Therapeutics Inc.—lied to them about a product.”
• “Citing Neals’ decision as a ‘supplemental authority,’ lawyers for Outlook shareholders argued against the company’s motion for dismissing the class action. A team of lawyers at Cooley who are defending Outlook raised the false citations in a July 15 response.”