Did the legal principle of conflict of interest exist in the 17th century?

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Yes. According to this paper the concept of "ambidexterity" has been a part of Canon law since medieval times.

brief quote:

Sayles notes that there was "a monotonous outcry against the practice whereby the pleader insinuated himself into the confidence of one party and afterwards transferred his services to the other." Christian stated that serjeants "were often accused of being 'ambidexters' and taking fees from both sides."" The Mirror ofJustices, a late thirteenth century attack on judges and the legal system, said that a lawyer should be "suspended if he is attainted of receiving a fee from both sides in one cause.""

According to the Catholic Encyclopedia,

The judges were to be at least forty years old, of unimpeachable reputation, distinguished for virtue and wisdom, masters of theology, or doctors or licentiates of canon law, and they must follow the usual ecclesiastical rules and regulations. On 17 September, 1480, Their Catholic Majesties appointed, at first for Seville, the two Dominicans Miguel de Morillo and Juan de San Martin as inquisitors, with two of the secular clergy assistants. Catholic Encyclopedia

(note: I've cherrypicked the section on the inquisition in Spain; you'll need to do additional research to verify that the inquisition in Italy is chartered and organized the same way. The reason I've picked this section is that it explicitly states that the qualifications for the members include "licentiates of canon law" - meaning that they would be familiar with the sections on ambidexterity. If you can find similar qualifications for the Inquisition in Italy, you'll be very close to your answer.)

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