Risk Update

Conflicts Updates — Side Switching Allegation, Canadian Conflict Considered

Snell & Willner Won’t Be DQ’d From EB-5 Project Fight

  • “A Colorado federal judge has declined to disqualify Snell & Wilmer LLP from a suit in which Chinese investors seek to recoup the millions they sunk into a condo project under the EB-5 visa program, finding that the firm adequately handled potential conflict of interest issues.”
  • “Investors effectively created the conflict for the firm after they amended their complaint against Colorado Regional Center Project Solaris LLLP, its former general partner Colorado Regional Center I LLC and other defendants, changing their claims from being direct to being derivative, according to Tuesday’s order by U.S. District Judge Raymond P. Moore.”
  • “The change led Snell & Wilmer’s two clients — Project Solaris and Colorado Regional Center I — to have competing interests, as the investors, led by Jun Li, went from directly suing the defendants to suing various defendants on behalf of Project Solaris, according to Tuesday’s order.”
  • “To avoid a conflict in response to the legal maneuverings, Snell & Wilmer stopped representing Project Solaris, which is now representing itself. That the firm continued to represent Colorado Regional Center I does not warrant a disqualification, the judge held.”
  • “‘The court finds Snell & Wilmer did not ‘switch sides’ or drop [Project Solaris] in favor of pursuing the interest of another client, CRC 1,’ the order reads. ‘Instead, when Li plaintiffs’ actions created the conflict, Snell & Wilmer recognized the conflict and withdrew from representing [Project Solaris.] They were required to do no more.'”
  • “‘Li plaintiffs fail to identify any information Snell & Wilmer would have obtained that would be confidential to [Project Solaris] in light of the relationship between [Project Solaris] and CRC I or how any such unidentified information could be used to the detriment of [Project Solaris,]’ the order reads.”

Same counsel can’t work for insurer on both priority dispute and AB claim: Court” —

  • “An Ontario auto insurer involved in a priority dispute with another insurer should have used a different counsel in that dispute than the one used for the main accident benefits claim with the insureds, the Ontario Superior Court has ruled.”
  • “The issue came up in the case of The Personal Insurance Company v. Jia, in which the same counsel represented the insurer in both the priority dispute and in the accident benefits dispute.””The accident benefits claimants raised the issue of a conflict before the Ontario Licensing Appeal Tribunal (LAT). They argued that the insurance company’s counsel, in support of the insurer’s denial of their claim, had misused information that had been compelled from them in an examination under oath during the insurer’s priority dispute with another insurer.”
  • “‘[SLASTO] found that there is a conflict in counsel for the insurer acting in both the priority dispute and the benefits dispute,’ the Ontario Superior Court of Justice found. ‘[SLASTO] found that breach of the statutory scheme was improper and prejudicial to the respondents, defeating the carefully balanced process prescribed by law.'”
  • “Even if theoretically there may not have been any inherent conflict of interest in the same lawyer representing The Personal in both the priority dispute and the accident benefits actions, how the information was used made a difference in this case, the Ontario Superior Court ruled.”
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