Sometimes history is destined to repeat itself. In Doe 1 v. McGrath Kavinoky LLP, No. B343201, 2026 Cal. App. LEXIS 394, 2026 WL 1862123 (Cal. App. June 29, 2026), the California Court of Appeal held that a law firm’s failure to disclose a significant potential conflict of interest to hundreds of clients with similar claims against the same defendants and obtain the clients’ informed written consent rendered the entire engagement agreement, including its arbitration provision, unenforceable.
McGrath Kavinoky LLP represented more than 300 former patients alleging sexual abuse by a UCLA physician. The law firm entered into separate retainer agreements with individual clients but pursued a coordinated litigation strategy that ultimately resulted in a global settlement. Two clients later sued the firm, alleging that it failed to disclose the conflicts inherent in representing numerous clients competing for the same settlement fund, pressured clients to accept the aggregate settlement, and failed to obtain informed written consent regarding these conflicts.
The principal issue was whether the firm’s failure to comply with California Rule of Professional Conduct 1.7(b) (conflicts of interest requiring informed written consent) made the retainer agreements unenforceable from the outset. The trial court concluded it did, and the Court of Appeal affirmed.
Representing numerous plaintiffs against the same defendants created a significant foreseeable risk that each client’s interests would be materially limited by the firm’s duties to other clients. Because that risk existed when the representation began, the firm was required to obtain each client’s informed written consent before undertaking the representation. Failure to satisfy this ethical obligation invalidated the entire engagement agreement as against California public policy.
Indeed, this conclusion mirrors that in Sheppard, Mullin, Richter & Hampton, LLP v. J-M Manufacturing Co., Inc., 6 Cal. 5th 59 (2018). It reminds lawyers that an engagement agreement formed in violation of conflict-of-interest rules is unenforceable. The court clarified that this principle applies not only to actual conflicts, which was the situation in Sheppard, but also to potential conflicts existing at the inception of the representation that create a significant risk the lawyer’s representation of the client will be materially limited by the conflict.
This decision emphasizes several core ethics principles. Lawyers must identify foreseeable conflicts before accepting a representation and obtain informed written consent when a significant risk exists. Generic or blanket conflict waivers are insufficient when material conflicts are reasonably foreseeable. When representing multiple clients whose recoveries may compete with one another, attorneys must recognize that settlement negotiations can create divided loyalties requiring careful disclosure. And engagement agreements that violate fundamental ethical rules may be unenforceable.
Beyond the immediate result, the opinion also serves as a reminder that conflict analysis cannot be reduced to standardized engagement language. Sophisticated clients, repeat players, and high-volume representations do not diminish counsel’s duty to evaluate whether the circumstances of a new engagement create materially adverse interests or significant risks to the lawyer’s professional judgment.
The decision further illustrates that informed written consent requires two-way communication between an attorney and their client. Effective disclosures should explain the nature of the conflict, the reasonably foreseeable adverse consequences, the available alternatives, and the practical ways in which the representation could affect the client’s interests. An attorney should always ensure that the disclosure is sufficient to permit an informed decision by the client.
As such, lawyers engaged in mass-tort or multi-client litigation should be mindful to evaluate conflicts at the outset of representation. When multiple clients may ultimately compete for limited settlement funds or have differing litigation objectives, lawyers must fully disclose those risks and obtain informed written consent before accepting representation. Failure to do so can jeopardize both the engagement agreement and the enforceability of arbitration clauses contained within it.
For practitioners, this case serves as a reminder to revisit engagement templates that attempt to address multiple ethical issues in a single provision. Arbitration clauses, aggregate settlement provisions, advance conflict waivers, and informed consent language each implicate distinct legal and ethical requirements. Combining them into a single, generalized paragraph may obscure the disclosures necessary for any one provision to be enforceable, and may increase the likelihood that a court will decline to enforce the agreement as a whole.
Ultimately, the McGrath decision reinforces a broader principle that extends beyond mass tort cases. Whether representing a single client, or coordinating representations involving numerous parties, lawyers should approach conflicts as a dynamic aspect of the attorney-client relationship rather than a one-time administrative task. Careful conflict analysis, thoughtful client communication, and appropriately tailored engagement agreements remain among the most effective tools for reducing both professional liability exposure and challenges to the enforceability of attorney-client agreements.
David M. Majchrzak is a seasoned ethicist, civil litigator, and certified specialist by the State Bar of California in legal malpractice law. He currently serves as the president of the Association of Professional Responsibility Lawyers and previously served as a three-year member of the State Bar of California’s Committee on Professional Responsibility and Conduct. Mr. Majchrzak is the general counsel of and a partner at Rosing Pott & Strohbehn LLP.
Susie Dent is Senior Counsel at Rosing Pott & Strohbehn. She advises attorneys, law firms, and corporate clients on legal ethics, professional responsibility, risk management, and complex business and employment matters. An avid speaker and educator, Ms. Dent frequently presents on attorney wellness, burnout prevention, intergenerational communication in the legal profession, and the ethical implications of emerging technologies in legal practice.