conflict of interest

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Conflict of Interest

A term used to describe the situation in which a public official or fiduciary who, contrary to the obligation and absolute duty to act for the benefit of the public or a designated individual, exploits the relationship for personal benefit, typically pecuniary.

In certain relationships, individuals or the general public place their trust and confidence in someone to act in their best interests. When an individual has the responsibility to represent another person—whether as administrator, attorney, executor, government official, or trustee—a clash between professional obligations and personal interests arises if the individual tries to perform that duty while at the same time trying to achieve personal gain. The appearance of a conflict of interest is present if there is a potential for the personal interests of an individual to clash with fiduciary duties, such as when a client has his or her attorney commence an action against a company in which the attorney is the majority stockholder.

Incompatibility of professional duties and personal interests has led Congress and many state legislatures to enact statutes defining conduct that constitutes a conflict of interest and specifying the sanctions for violations. A member of a profession who has been involved in a conflict of interest might be subject to disciplinary proceedings before the body that granted permission to practice that profession.

Cross-references

Attorney Misconduct; Ethics, Legal.

conflict of interest

n. a situation in which a person has a duty to more than one person or organization, but cannot do justice to the actual or potentially adverse interests of both parties. This includes when an individual's personal interests or concerns are inconsistent with the best for a customer, or when a public official's personal interests are contrary to his/her loyalty to public business. An attorney, an accountant, a business adviser or realtor cannot represent two parties in a dispute and must avoid even the appearance of conflict. He/she may not join with a client in business without making full disclosure of his/her potential conflicts, he/she must avoid commingling funds with the client, and never, never take a position adverse to the customer.

conflict of interest

noun conflict, divergent interrsts between clients, ethical breach, prohibiting acceptance or retention of a case, variance of interest between clients
Associated concepts: code of professional responsibility
See also: disagreement
References in periodicals archive ?
Perhaps the biggest difference between the conflict-of-interest problems facing judges and police officers is in their relative capacities to avoid conflicts of interest.
74 percent of the editors reported that they always or almost always publish conflict-of-interest disclosures while nearly 11 percent never do so;
Fourth in this hierarchy of violations is the apparent conflict-of-interest situation.
A conflict-of-interest policy protects the independence of board members, management, staff, the external auditor, and other vendors, so that each entity performs only its role and is not compromised in any way," said Frank Kurre, national managing partner of the not-for-profit industry practice.
To hire the firm, the district must first sign a conflict-of-interest waiver because of Munger's connection to the Ambassador Hotel, a site the district considered using for a school before turning to Belmont.
The New Client/Matter capability of FileFlow(TM) initiates a conflict-of-interest search against the FileSurf(TM) database and other applications, such as accounting and relationship management.
The state's conflict-of-interest provisions are intended to ensure public officials perform their duties free from bias caused by their own financial interests.
8, 1996--The Third District Court of Appeal has ruled that the Department of Motor Vehicles cannot go forward with plans to issue new high-security driver's licenses until conflict-of-interest questions in the bid process are resolved.
Gary Huckaby of the FPPC said elected officials are prohibited by conflict-of-interest laws from voting on any matter that has a material effect on a financial interest that is a source of income of at least $250 for the elected official.
Despite that debacle, KPMG was not initially asked for any conflict-of-interest information in writing.
The dispute has lingered since February 1996, when a state legislative counsel's opinion stated that Birsner's work as an on-call surgeon for emergency room patients violated conflict-of-interest laws.
A state appellate court has upheld the felony conviction of former Moorpark City Councilman Scott Montgomery, who was forced to resign from office after pleading guilty to conflict-of-interest charges.