Last month the Federation of Law Societies of Canada released a long-awaited Report on Conflicts of Interest prepared by its Standing Committee on the Model Code. This was the third attempt by the Federation with previous reports prepared by a Special Advisory Committee on Conflicts of Interest in June 2010 and in February 2011. The Federation settled the conflicts issue except for the thorny conundrum of current client conflicts. A copy of the almost-finished Model Code is available here. If this report is adopted by the Federation’s National Council it will mark the completion of the Model Code (which was substantially completed in March 2011). More on specific issue of conflicts of interest to follow below.
The Federation’s Model Code has been adopted by the Law Society of Alberta (effective November 1, 2011), the Law Society of Manitoba (January 1, 2011) and the Nova Scotia Barristers Society (effective January 1, 2012). Other provinces are expected to follow in 2012. Each province may retain local variances but the vast majority of the provisions will become uniform across Canada. In an age of national and international mobility, this makes eminent sense for lawyers, law firms, regulators and clients.
The controversy over conflicts of interest dates to the Supreme Court of Canada’s decision in R. v. Neil, 2002 SCC 70 where Justice Binnie established “a bright line rule” providing “that a lawyer may not represent one client whose interests are directly adverse to the immediate interests of another current client — even if the two mandates are unrelated — unless both clients consent after receiving full disclosure (and preferably independent legal advice), and the lawyer reasonably believes that he or she is able to represent each client without adversely affecting the other.” (para. 29). This sentence has caused great consternation in the legal profession and led the CBA to create a Task Force on Conflicts of Interest which produced a 284 page report in 2008 which includes an excellent Toolkit for lawyers and law firms on how to deal with avoiding conflicts.
The members of the CBA Task Force parted company with Justice Binnie over the necessity and the advisability of “the bright line rule” and recommended against its adoption in the CBA Code. The CBA Code was amended and took a different, more lenient approach to conflicts of interest between current clients. The Federation did not accept the CBA approach and hence the three reports by it on the issue. If you are interested in more details of what I describe as a decade long “battle over conflicts of interest in Canada” you can read my upcoming article here.