Today’s posting comes (almost live) from the Schulich Law School at Dalhousie University where Richard Devlin and the organizing committee managed what many would have considered impossible – made legal ethics interesting and relevant to a student audience. Dalhousie staged a lively well fought and provocative debate about the hottest current issue in professional ethics in Canada, the issue of Conflicts of Interest.
Today’s Wickwire Lecture – named after F.R. Wickwire, a leading member of the Nova Scotia Barristers’ Society – and the endowing sponsor of the Sports Field at Dal, was on Legal Ethics and Professional Responsibility and was entitled “Conflicts of Interest: the Good, the Bad, and the Ugly”
The panelists were
The Hon. Justice Joel Fichaud, Nova Scotia Court of Appeal
and Professor Paul Paton, McGeorge School of Law, University of the Pacific
The session was moderated by Ms. Marjorie Hickey QC, President, Nova Scotia Barristers’ Society
Paul Paton kicked off, stressing that he wasn’t carrying a brief for the Canadian Bar Association and that any views were his own. He started by situating the Canadian debate on conflicts reform in a broader context, pointing out that similar reform initiatives were afoot in the United States, England and Wales and Australia. He saw conflicts as posing larger questions about the transformation of the profession and the pressures of globalization and changing markets for legal services. He posed some tough questions for the audience:
Is law a profession or a business, and what does the answer mean for Legal Ethics and Professional Responsibility?
What are our core professional values?
What is the impact on Legal Ethics and Professional Responsibility of changes in markets and especially the size and geographic reach of law firms?
How can lawyer mobility be reconciled with old-fashioned rules adopted in times when one would be in one firm for life?
Are our conceptions of loyalty changing as clients use multiple firms and retender long established work through RFPs
How does the internationalization of the profession and the changing nature of national borders affect Legal Ethics and Professional Responsibility?
Canada was engaged in a similar exercise to that conducted elsewhere in the world. It was important to get the consultative process right. We cannot be parochial. Clients should not be deprived of their choice of counsel without strong countervailing policy justifications
The CBA adopted the Report of its Task Force in August 2008. It is by any standard an impressive piece of work on a very complex area of the law. Getting it right has important consequences. The CBA Report had a number of important messages but it was critical not to see it as a radical move. The report’s key emphases were on loyalty to clients, the protection of client confidences and of client representation. It critically separated out the misuse of confidential information from questions of loyalty. It updated the screen rules, dealing with mergers and staff transfers, and addressed the critical and difficult question of who is the client.
Most critically, the Report codifies a conflicting interest as one where there is a substantial risk of material and adverse effect on representation which includes impairment of “the lawyer’s relationship with a client”.
In England and in the Competition Bureau’s report on the Professions, there had been concern about promoting client choice, and whether consumer interests were really protected by restrictive conflicts rules.
There was a clear conflict with the Federation of Law Societies of Canada Committee recommendation which says in 2.04 (2) that “A lawyer must not act or continue to act in a matter when there is, or is likely to be, a conflicting interest, unless, after disclosure, the client consents”.
Paton said that the phrase “is or is likely to be” made it necessary that the lawyer must prognosticate as to how things might turn out and that he or she must make the right recommendation. He had problems with both the substance and the process of the FLSC Committee Report, and encouraged a dialogue with profession to ensure that whatever emerged satisfied the profession’s duties to clients and to the public
Next to speak was Kristen Dangerfield, Senior Counsel with the Law Society of Manitoba who looked at conflicts from the perspective of a regulator. Her job was to enforce standards to protect the public and present and future clients. Conflicts rules serve a good purpose, if the focus is on client protection. Clients must be confident that their lawyers will have undivided loyalty – and be loyal to that client alone. The principles also serve the broader interest of protecting public confidence in administration of justice.
The lawyer might often not see the harm objectively and might prefer the interests of others over his clients. The regulators must impose sensible, fair and clear rules. If regulators failed to protect the public interest, then government will step in. That is why the FLSC took a significant amount of time to consider what should be done.
Dangerfield focussed on the current client rule since it had spurred the most controversy:
Acting Against Current Clients
2.04 (3) A lawyer must not represent a client whose interests are directly adverse to the immediate legal interests of a current client – even if the matters are unrelated – unless both clients consent. Consent means fully informed and voluntary consent after disclosure. Consent must either be in writing or recorded in writing and sent to the client. Disclosure means full and fair disclosure of all information relevant to a person’s decision in sufficient time to permit a genuine and independent decision. A lawyer must also take reasonable steps to ensure that the client understands the matters disclosed.
The consent of a client described in this rule may be express or inferred. A lawyer should record in writing the basis for inferring the consent of a client. It may be reasonable to infer such consent when:
* the matters are unrelated;
* the lawyer has no relevant confidential information arising from one client that might reasonably affect the other;
* the parties affected have commonly consented to lawyers acting against them in unrelated matters; and
the lawyer reasonably believes that he or she is able to represent each client without adversely affecting the legal interests of the other.
She gave as an example a labour client who is an employer disciplining a worker – but the worker is also a matrimonial client of the firm. Both clients are entitled to disclosure, both might feel betrayed by the firm. She felt that CBA took away the onus on the lawyer that requires disclosure and consent. The client must be front and centre.
She conceded that in some circumstances the Federation Rule may be problematic, but justified it as reflecting the fiduciary aspect of duty of loyalty and as being virtually verbatim from Justice Binnie’s famous Bright Line Test.
She felt that the Federation could consult the profession until the cows came home and still not reach uniformity. No-one except the judiciary could change the law of fiduciaries. Perfection is enemy of excellence. The Canadian legal profession could not let complexity paralyze action. But we cannot have ethics which diverge from legal rules, we cannot let firm interests trump, and we cannot betray or undermine public confidence.
Justice Joel Fichaud of the Nova Scotia Court of Appeal played to the home town crowd with a couple of extended riffs on why legal services weren’t like buying ironing boards from Walmart and a story about Lawyers R Us a fictitious Atlantic mega firm with an ethical dilemma.
If I can criticize His Lordship, I thought that while provocative and entertaining, there was a touch of straw man about the analysis.
* Law was inherently a bespoke trade underpinned by the disclosure of confidential information which is the foundation of a client relationship.
This will strike those who argue for law as a more affordable commodity fueled by code and client self-help as somewhat dated.
* Law was inherently a zero sum game in which a lawyer was retained to obtain an advantage – which necessarily meant a disadvantage to an opponent. This was as true for transaction lawyers as litigators.
Again this is sometimes true but not always. It might surprise zoning lawyers, tax lawyers and much of intellectual property work. It also runs counter to much ADR work where the purpose is to reconcile competing interests and bridge to consensus.
* He next posited an appalling ethical dilemma where litigant (who was a client from the firm’s Newfoundland office) was savaged in discovery by a lawyer from the Halifax office who had decided to sue him on behalf of a second client. How should the firm react given the profit and profile at stake? Could it continue to act? And if so how? He took the audience through the sort of internal debate he thought would happen.
I’m unaware of any major regional or national firm which doesn’t check conflicts at the outset. And that doesn’t see that a firm has a unity for professional purposes regardless of how it might work internally. The answer to his dilemma that a firm should never accept a brief that had it litigating aggressively against a current client; and should not expect to survive a disqualification motion.
Justice Fichaud said that “Trust is foundation of our profession and confidential information is the lifeblood of the lawyer-client relationship. Loyalty and trust are basic and the legal parameters must promote those”. He would not comment on disciplinary standards, which do not involve judges. But only judges could assess the content of fiduciary duties and make the final decision on whether a lawyer can continue to act.
The SCC Trilogy illustrates that the economic issues are here now and are very real. But against those he said that fiduciary rules should not be relaxed even if that meant that in Canada the structures of law firms may have to be re-examined.
In response to questions, Paton stressed that he was not conceding the moral high ground, and that the reforms fully respected those but the world of practice in which these problems emerged was very different from the sorts of cases that reached the courts. At the very least regulators must consult with all affected parties, take public interest seriously and pay careful attention to informed different perspectives. The CBA consultation had been real and extensive.
All in all a lively discussion in front of a packed house of law students, members of the bar, and faculty and judiciary. The Model Code Committee in Nova Scotia chaired by Dan Campbell is receiving views on the issues and has a Lunch and Law session at the Barristers’ Society on November 2, where both Paton and Dangerfield will speak.
Richard Devlin tells me that he hopes to have a YouTube version of the Wickwire Debate mounted by the weekend.