Interesting spot and review from Amy McClurg at Thompson Hine: “Utah Supreme Court: Lawyers represented former trustees, not the trust—no conflict” —

• “Conflicts of interest aren’t always straightforward, especially with trust and estate planning matters. The Supreme Court of Utah recently determined that there was no former client conflict under Utah’s Rule 1.9 where lawyers were found to have only represented the former trustees and not the trust itself in litigation.”
• “Trustees (“Trustees”) hired lawyers to represent them in their duties as Trustees of the trusts at issue. After a significant period, Trustees hired the same lawyers to hire them to defend a lawsuit brought by the trusts’ beneficiaries.”
• “A jury eventually found that Trustees breached their fiduciary duties to the trust. The court entered a $1.8 million judgment against the Trustees, which was mainly payable to the trusts. The court removed the Trustees and appointed Successor Trustees (“Successor Trustees”). Using the same attorneys, the now former trustees (“Former Trustees”) requested that the court reduce the judgment.”
• “The Successor Trustees moved to disqualify the Former Trustees’ attorneys… The argument was based on the view that the lawyers had represented the trusts in the litigation initiated by the beneficiaries and therefore were prohibited from assisting the Former Trustees in trying to reduce the judgment. They argued that to do so would be adverse to the interests of the trusts and the trusts were their former clients. The lawyers were disqualified by the district court.”
• “The Utah Supreme Court found that while an attorney can represent a trust, an attorney-client relationship does not arise with the trust solely due to the lawyer’s representation of a trustee. While a trust is capable of forming an attorney-client relationship with a lawyer, context determines whether such relationship was actually formed. The trust holds the attorney-client privilege and the trustee, as fiduciary, claims the privilege on the trust’s behalf.”
• “While substantive law regarding trusts will vary from state to state, former client conflicts are fairly common. Different states with the nearly identical former client conflict rules, may very well issue opinions with a vastly different result. For those states without clear cut answers to the questions raised in this opinion, engagement letters become even more crucial. This case was not ultimately decided on the content of the engagement letter, but it is a wonder how far the case would have made it in court had the Former Trustee’s engagement letter explicitly mentioned who the client was not—rather than just mentioning who the client was. This case surely raises the question of when it would be advantageous for trusts and estates lawyers (and those in other fields of practice as well) to follow suit.”

And for those missing the Olympics: “Head of Panel That Ruled Against Jordan Chiles Represents Romania in Other Cases” —

• “The head of a panel that ruled that the American gymnast Jordan Chiles had to give up her Olympic bronze medal in favor of a Romanian athlete has represented Romania for almost a decade in arbitration cases, documents show.”
• “The three members of a special tribunal convened for the Olympics by the Court of Arbitration for Sport after Romania lodged a complaint ruled that a successful appeal made by Chiles’s coach over the points awarded to her in the floor exercise competition was initiated four seconds late. The Romanian athlete, Ana Barbosu, was awarded the bronze medal as a result of the panel’s decision, and Chiles was dropped to fifth place.”
• “The decision to reallocate the medals in the floor exercise outraged U.S. Olympic and gymnastics officials, who have threatened to take their fight to the Swiss courts. The revelation that Hamid G. Gharavi chaired the panel that resolved the dispute in favor of a Romanian athlete despite having a long relationship with Romania’s government is sure to inflame the case further.”
• “Very little is known about the deliberation and how the panel reached its verdict, with the court publishing just a one-page statement confirming the decisions it made. A detailed document outlining the full reasoning behind the outcome will eventually be sent to all the parties involved.”
• “U.S.A. Gymnastics said on Monday it had been notified by the court that under its rules, the decision cannot be reconsidered ‘even when conclusive new evidence is presented.'”
• “The gymnastics federation said it would continue to pursue “every possible avenue” for an appeal, including before the Swiss Federal Tribunal. That body, the only one that can hear an appeal against a decision by CAS, the sports court, only considers breaches of process and not new evidence related to the case itself.”
• “Under the court’s rules, panel members, including the chair, must complete a conflict of interest form before reviewing each case that lists three possible outcomes.”
• “The first and third are explicit, revealing no conflict or a conflict so significant that they would require their recusing themselves from a case. The second is more nuanced, allowing arbitrators to reveal potential conflicts but giving them a chance to explain why the potential conflict should not prevent them from hearing a case.”
• “‘The issue is whether an Olympic arbitrator who currently represents a country on the global stage can decide a case involving a gymnast of that country, in an unbiased manner,’ three arbitration experts wrote in an opinion published on the institute for conflict resolution’s website. ‘Is it realistic to expect such arbitrator can decide against the interests of that country or of that country’s gymnast, who in this case is represented by the Federation of Romanian Gymnasts?'”
• “Katherine Simpson, an international arbitrator and one of the authors of the opinion piece that first disclosed Mr. Gharavi’s work for Romania, said that even if none of the parties objected, his work on behalf of Romania was significant and meant he would automatically have had to recuse himself under the IBA’s so-called red list of non-waivable activities.”