Can the Same Lawyer Act for Buyer and Seller in Queensland?

In this blog we discuss whether a Brisbane law firm can represent both the buyer and seller for the same transaction…

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Hi everybody – George Sourris, Empire Legal.

Today’s topic: can Empire Legal represent a Buyer and a Seller?

Great question. Let’s unpack it.

Lawyers in Queensland are governed by the Australian Solicitor Conduct Rules, which came out in 2012. These rules give us the rules on what we can and can’t do. In Queensland Law, conflict of interest is always a topic that we have to put at the front when making a decision to represent a client.

Now, without jumping into all the legal jargon, 11.3 of these rules states that apart from acting in the best interests, we may if we have consent from the client in writing and that they understand that we’re acting for multiple parties, i.e. representing the Buyer and the Seller, then technically we are allowed to represent both parties.

However, when we look at the conveyancing space, there is always an extremely high risk of opposing or competing interests. i.e a Seller wanting something or a Buyer wanting something, and there’s always that push pull of finding the middle ground.

Now, when you’re representing one party, it’s very simple – you don’t have to be concerned of any conflicts, but when you’re representing both, it’s a totally different story.

How does this work in practice?

In the event that a law firm chooses to act for both parties, there are set guidelines that must be adhered to through what we call an information barrier. In order to be compliant, these barriers require things like: a compliance officer to oversee compliance, documentation not being able to be seen by the other party, so for example, lawyer A in office A of Empire Legal say our Manly office is representing the Seller, and lawyer B in office B say our Spring Hill office is representing the Buyer.

There has to be a way that there is effectively a barrier up where you cannot see the other person’s file or information in order to ensure there’s no conflict. Sounds pretty complicated, right?  The Law Society has given us guidelines on what we must do in order to not be in breach of our obligations under the Australian Solicitor Rules.

Another thing to note here, the QLD Law Society doesn’t condone or encourage law firms to convey both sides of a property transaction. So what’s Empire’s position?

It’s difficult for any person to be truly independent and act in the best interest of an individual when they represent both sides.

There is an obvious conflict of interest that will occur. If there’s any dispute or issue that pops up in a conveyance when you’re acting for both parties. No matter what the topic is, the client, be it the buyer or the seller, is going to take the position and assume that that lawyer is coercing with the other side, if you’re acting for both, there’s just no way it can be avoided.

It’s a no-win situation for the solicitor, and that’s because: if in the event that there’s a conflict, what has to happen is the law firm has to let both parties know, the sellers and the buyers, that there’s been a conflict, and moreover, then cease to act for both sides. So you have to do the work, give away both clients in the end, and then those clients have to go and engage another law firm and pay them.

Doesn’t make sense, right?

It ends up costing the clients more time and money. It’s Empire Legal’s view that it is not only unethical, but also unprofessional to act for both sides. So I would caution you if you do get into a position where a solicitor says that they can represent both sides, are they truly acting in your best interests?

We only ever represent one party, so we can always put our best foot forward and put our hand on our heart and say, we are doing the absolute best job for that client. 

Would you want to be represented by somebody that was also helping the other guys? I wouldn’t.

Anyway, guys, that’s our position. I just wanted to give you a bit more of an understanding on whether a law firm technically can engage in representing both sides, which obviously they can, but whether they should. I’ll leave that up to you guys. Just wanted to clear that one up.

All Australian Solicitors Rules can be seen online on the Law Society’s website. You can just Google it if you’re curious about knowing our obligations and what we can and can’t do.

See you on the next one.

Thanks guys.

We can help…

For simple, sunny, smooth sailing conveyancing – Empire Legal.

We look forward to continuing to help thousands of Queenslanders every year with their conveyancing!

Any questions? Want to know more? Get in contact with us via the below form or via info@empirelegal.com.au.

Can the same lawyer act for the buyer and the seller?

Almost never, and in a normal residential sale the answer is simply no.

A buyer and a seller in the same transaction have directly opposed interests. One wants the lowest price, the widest conditions and the longest time. The other wants the opposite. A solicitor owes each client undivided loyalty and a duty to disclose everything relevant, and those two duties cannot both be met when you act for both sides of the same deal.

Can a conveyancer act for both parties in Queensland?

Queensland does not have licensed non solicitor conveyancers the way some other states do. Conveyancing here is legal work carried out by a law practice, so the conflict rules that apply to solicitors apply to the whole transaction.

That is a structural protection Queensland buyers and sellers have and often do not realise they have.

Why is acting for both sides a conflict of interest?

Work through what it would actually mean. If your solicitor acts for both of you and finds a problem on the title, whose interest do they serve when deciding how to describe it? If the buyer wants to negotiate a reduction for a defect, who advises them, and who advises the seller to resist?

The moment anything goes wrong, and something usually does, the person who was supposed to be in your corner is standing in the middle. That is not a service, it is an absence of one.

Is it ever allowed?

There are narrow circumstances where a practice may act for parties with a common interest, with fully informed written consent from everyone and appropriate safeguards. They are the exception, they require both parties to genuinely understand what they are giving up, and the practice must stop acting for both if a conflict actually emerges.

A residential sale between two unrelated parties is not one of those circumstances. Even in a family transfer, where the parties feel aligned, we would usually recommend separate representation, because the interests diverge the moment a valuation, a duty question or a mortgage gets involved.

What about a related party or family transfer?

This is where people push hardest, because it feels like one job. The problem is that a transfer between family members carries real questions about duty, capital gains, undue influence and what happens if the relationship changes. Each of those has a different answer depending on which side you are on.

Independent advice also protects the transaction itself. A transfer where one party had no independent advice is far easier to attack later.

What should you do if an agent suggests one lawyer for both sides?

Decline, and consider what else the arrangement is optimising for. Convenience for the agent is not the same as protection for you.

Empire Legal acts for one side, and we pay and accept no referral fees, kickbacks or commissions from anyone. That means when we tell you to walk away from a contract, there is nothing sitting behind the advice except the advice.