Thursday, February 18, 2010

Void On Public Policy Grounds

The New Jersey Appellate Division has held that an agreement between an attorney and three defendants (two individuals and a corporation) that the attorney would not represent parties in litigation adverse to the defendants was void.

The agreement was entered into while the attorney was negotiating with defendants on behalf of clients and also was tied to a provision by which the defendants waived conflict of interest claims against the attorney. The attorney had previously provided legal services to an entity in which some of the defendants were principals.

The attorney then sought a court determination that the agreement violated New Jersey RPC 5.6(b)(restriction on right to practice) in order to bring suit against a corporation owned by the individual defendants.

The court here held the agreement void as a violation of public policy and refused to enforce it on grounds of equitable estoppel. The ethical provision exists for the benefit of the public and "that purpose would be thwarted if equitable estoppel principles allowed the [agreement] to stand." (Mike Frisch)

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