Keeping Client Confidences and Acting With Commitment
“Lawyers must keep their clients’ confidences and act with commitment to serving and protecting their clients’ legitimate interests. Both of these duties are essential to the due administration of justice.”
Canada (Attorney General) v. Federation of Law Societies of Canada, 2015 SCC 7 at para. 1
This recent decision of the Supreme Court of Canada resolves nearly fifteen years of litigation regarding the lawyer’s role in protecting against anti-money laundering and anti-terrorist financing. This decision is significant to those interested in legal ethics on several points.
Solicitor-client privilege
The Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the “Act”) and the regulations thereunder (collectively the “Regime”) require that lawyers collect, record and retain certain client information. The Act authorizes search and seizure of documents in the possession of lawyers. The Court concluded that the Regime to be contrary to section 8 of the Charter for failure to provide sufficient protection to solicitor-client privilege.
A number of significant points were made by the majority. The first is the reiteration from Lavallee[i] at para. 36 that “A law office search power is unreasonable unless it provides a high level of protection for material subject to solicitor-client privilege”. The Court responded to the submission that Lavallee did not dictate the outcome in this case because the search and seizure power in question was not “seeking evidence of criminal wrongdoing” but was rather “in connection with an administrative law regulatory compliance regime” by stating inter alia that:
… the reasonable expectation of privacy in relation to communications subject to solicitor-client privilege is invariably high, regardless of the context. The main driver of that elevated expectation of privacy is the specially protected nature of the solicitor-client relationship, not the context in which the state seeks to intrude into that specially protected zone.
While the Court accepted that “… when a search provision is part of a regulatory scheme, the target’s reasonable expectation of privacy may be reduced”, the Court said at para. 44 that:
The core principle of the [Lavallee] decision is that solicitor-client privilege “must remain as close to absolute as possible if it is to retain relevance”: …This means that there must be a “stringent” norm to ensure its protection, such that any legislative provisions that interfere with the privilege more than “absolutely necessary” will be found to be unreasonable: …[ii]
While considered in the context of an Act which “has a predominantly criminal law character” whose “regulatory aspects serve criminal law”, it appears that the Court has more generally diminished or eliminated the relevance of the reason for the search and seizure and has emphasized that what is relevant is that solicitor-client privileged information is not protected in the search and seizure[iii].
Independence of the profession
The majority of the Court of Appeal for British Columbia concluded that on one of the principles of fundamental justice relevant to section 7 of the Charter is “the independence of the Bar”. The majority concluded that the Regime deprives lawyers and clients of their liberty interests in a manner which does not accord a principle of fundamental justice namely the independence of the Bar.
Justice Cromwell, for the majority, differentiated between a broad and a narrow version of independence at para. 77 as follows:
According to the broad version, the independence of the bar means that lawyers “are free from incursions from any source, including from public authorities”: … The narrower, more focused version, is anchored in concern about state interference with the lawyer’s commitment to the client’s cause. This narrower version, as I see it, boils down to the proposition that the state cannot impose duties on lawyers that interfere with their duty of commitment to advancing their clients’ legitimate interests. …
The majority of the Court of Appeal placed “great stress on independence of the bar as it relates to self-regulation of the legal profession”. Justice Cromwell was not prepared to decide whether self-regulation of the profession is a principle of fundamental justice either stating at para. 86 that:
While the Court of Appeal and the Federation place great stress on independence of the bar as it relates to self-regulation of the legal profession, I do not find it necessary or desirable in this appeal to address the extent, if at all, to which self-regulation of the legal profession is a principle of fundamental justice. As LeBel J. [has] pointed out… self-regulation is certainly the means by which legislatures have chosen in this country to protect the independence of the bar … But we do not have to decide here whether that legislative choice is in any respect constitutionally required. Nor does the appeal require us to consider whether other constitutional protections may exist in relation to the place of lawyers in the administration of justice.
Some will regret that the Court did not find self-regulation to be constitutionally protected thereby avoiding other forms of regulation such as in Australia and England where self-regulation has been lost. While I am a supporter of self-regulation, my view is that this is the better result. Good self-regulation may well be the best approach but other forms of independent regulation would be better than bad self-regulation. If the profession does not regulate well then there should be a risk of loss of self-regulation. And there is no doubt that lawyers are conflicted by their self-interest in some important respects. This conflict is mitigated to some extent by the risk of loss of self-regulation – and loss of self-regulation could be necessary depending on the nature and extent of self-interested self-regulation.
The duty of commitment as a principle of fundamental justice
The majority concluded at para. 103 that the narrow version of independence of the bar is a principle of fundamental justice stating:
In the context of state action engaging s. 7 of the Charter, … (subject to justification) the state cannot impose duties on lawyers that undermine the lawyer’s compliance with that duty, either in fact or in the perception of a reasonable person, fully apprised of all of the relevant circumstances and having thought the matter through. The paradigm case of such interference would be state-imposed duties on lawyers that conflict with or otherwise undermine compliance with the lawyer’s duty of commitment to serving the client’s legitimate interests.
It is on this point that the majority and the minority (the Chief Justice and Justice Moldaver) disagreed. The minority did not accept that commitment was a principle of fundamental justice and were inclined to the view that considering protection of solicitor-client privilege as a principle of fundamental justice provided a better resolution of the section 7 analysis. The minority concluded at para. 119 that:
In our view, this “principle” lacks sufficient certainty to constitute a principle of fundamental justice: …The lawyer’s commitment to the client’s interest will vary with the nature of the retainer between the lawyer and client, as well as with other circumstances. It does not, in our respectful opinion, provide a workable constitutional standard.
In considering whether the duty of commitment is a legal principle, as opposed to an important interest or a policy goal, Justice Cromwell observed at para. 91 that:
… The duty of commitment to the client’s cause has been recognized by the Court as a distinct element of the broader common law duty of loyalty and thus unquestionably is a legal principle: …
However, Justice Cromwell took care to emphasize that the scope of the duty of commitment is limited. At para. 93, he provided some examples of the bounds of the duty:
Of course the duty of commitment to the client’s cause must not be confused with being the client’s dupe or accomplice. It does not countenance a lawyer’s involvement in, or facilitation of, a client’s illegal activities. Committed representation does not, for example, permit let alone require a lawyer to assert claims that he or she knows are unfounded or to present evidence that he or she knows to be false or to help the client to commit a crime. The duty is perfectly consistent with the lawyer taking appropriate steps with a view to ensuring that his or her services are not being used for improper ends.
On the question of whether there is sufficient consensus permitting the conclusion that the duty of commitment is a fundamental principle, Justice Cromwell said at paras. 96 and 97 that:
Clients — and the broader public — must justifiably feel confident that lawyers are committed to serving their clients’ legitimate interests free of other obligations that might interfere with that duty. Otherwise, the lawyer’s ability to do so may be compromised and the trust and confidence necessary for the solicitor-client relationship may be undermined. This duty of commitment to the client’s cause is an enduring principle that is essential to the integrity of the administration of justice. In Neil, the Court underlined the fundamental importance of the duty of loyalty to the administration of justice. The duty of commitment to the client’s cause is an essential component of that broader fiduciary obligation. …
The duty of commitment to the client’s cause is thus not only concerned with justice for individual clients but is also deemed essential to maintaining public confidence in the administration of justice. Public confidence depends not only on fact but also on reasonable perception. It follows that we must be concerned not only with whether the duty is in fact interfered with but also with the perception of a reasonable person, fully apprised of the relevant circumstances and having thought the matter through. The fundamentality of this duty of commitment is supported by many more general and broadly expressed pronouncements about the central importance to the legal system of lawyers being free from government interference in discharging their duties to their clients.
It is particularly noteworthy is that independence from obligations and government interference that might interfere with service of legitimate client interests is seen as important not just to the trust and confidence of individual clients but also to public confidence in the administration of justice.
It is also noteworthy that Justice Cromwell has placed commitment both as a principle essential to the administration of justice and as a fiduciary obligation. This suggests that Neil, McKercher and Federation of Law Societies may be seen as establishing that the lawyer’s duty of loyalty is founded both in fiduciary law and in the law protecting the administration of justice.
In paras. 81, Justice Cromwell notes two types of harm to clients:
The duty of lawyers to avoid conflicting interests is at the heart of both the general legal framework defining the fiduciary duties of lawyers to their clients and of the ethical principles governing lawyers’ professional conduct. This duty aims to avoid two types of risks of harm to clients: the risk of misuse of confidential information and the risk of impairment of the lawyer’s representation of the client …
In paras. 82 and 83, Justice Cromwell discusses the common underlying basis for protection of solicitor-client privilege and commitment stating inter alia that:
The question now is whether another central dimension of the solicitor-client relationship — the lawyer’s duty of commitment to the client’s cause — also requires some measure of constitutional protection against government intrusion. In my view it does, for many of the same reasons that support constitutional protection for solicitor-client privilege. “The law is a complex web of interests, relationships and rules. The integrity of the administration of justice depends upon the unique role of the solicitor who provides legal advice to clients within this complex system”: … These words, written in the context of solicitor-client privilege, are equally apt to describe the centrality to the administration of justice of the lawyer’s duty of commitment to the client’s cause. A client must be able to place “unrestricted and unbounded confidence” in his or her lawyer; that confidence which is at the core of the solicitor-client relationship is a part of the legal system itself, not merely ancillary to it: … The lawyer’s duty of commitment to the client’s cause, along with the protection of the client’s confidences, is central to the lawyer’s role in the administration of justice.
Echoing the reasons of Justice Binnie in Neil, Justice Cromwell has placed client confidence in their lawyers as “part of the legal system itself” and not “merely ancillary” to it. The protection of client confidences and commitment to the client’s cause are clearly said both to be central to the lawyer’s role in the administration of justice. These are important statements that will no doubt be repeated in future case law and not just in Charter cases.
The application of section 7 of the Charter
In order for section 7 of the Charter to be engaged, it is necessary that state deprivation of a person’s life, liberty or security be in issue.
Justice Cromwell finds that the liberty interests of the lawyer are engaged by the Regime as “The scheme limits lawyers’ liberty by punishing with imprisonment the failure to comply with its requirements”. Justice Cromwell reasons that “It is not necessary to determine whether the liberty interests of clients are infringed”. The Court of Appeal however also found that the liberty of the client was in issue as a purpose of the Regime is to establish a paper trail for enforcement purposes including criminal law sanction.
The reliance by the majority on the lawyer’s rights is curious. One might think that analysis of the right not to be deprived of liberty except in accordance with the principles of fundamental justice would consider fundamental justice as it relates to the deprivation. It seems a strained interpretation to consider principles of fundamental justice that protect third parties under section 7.
This is perhaps results-driven reasoning. Framing the issue in terms of lawyer liberty establishes a much broader protection than would focus only on client liberty. The lawyer-focused approach protects clients from loss of commitment by the state by means that deprive the lawyer of life, liberty of security of the person (but not where lesser means are used). On the other hand, a client-focused approach only protects against loss of commitment where the client’s life, liberty or security of the person is at risk of deprivation.
Leaving aside the logic of the reasoning, the effect is to establish that the state may not, without proper justification, interfere with the duty of commitment owed to clients by means of loss of loss of life, liberty or security of the lawyer. It seems logical that Charter scrutiny of impaired commitment is a engaged where a client’s loss of life, liberty or security is at risk of deprivation by the state even where commitment is impaired by means not involving the lawyer’s life, liberty or security of the person.
However (and obviously), there is no Charter protection of the duty of commitment where deprivation of the life, liberty or security of neither the lawyer nor the client is in issue.
Still, framing the duty of commitment as a principle of fundamental justice is an important statement of policy that will no doubt inform the common law and statutory interpretation even where Charter rights are not in issue.
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[i] Lavallee, Rackel & Heintz v. Canada (Attorney General), 2002 SCC 61, [2002] 3 S.C.R. 209
[ii] Citations in this and following quotes are omitted.
[iii] Justice Cromwell took care at para. 68 to say “I add this. The issues that would arise in the event of a
challenge to professional regulatory schemes are not before us in this case. Different considerations would come into play in relation to regulatory audits of lawyers conducted on behalf of lawyers’ professional governing bodies. The regulatory schemes in which the professional governing bodies operate in Canada serve a different purpose from the Act and Regulations and generally contain much stricter measures to protect solicitor-client privilege.”
Malcolm, thank you for your description of the SCC ruling in this case.
However, you also say, “While I am a supporter of self-regulation, my view is that this is the better result. Good self-regulation may well be the best approach but other forms of independent regulation would be better than bad self-regulation. If the profession does not regulate well then there should be a risk of loss of self-regulation. And there is no doubt that lawyers are conflicted by their self-interest in some important respects. This conflict is mitigated to some extent by the risk of loss of self-regulation – and loss of self-regulation could be necessary depending on the nature and extent of self-interested self-regulation.”
With respect, some of those statements are wrong and dangerous.
You say, “Other forms of independent (read: government regulation, either directly or by its beholden appointees) regulation would be better that bad self-regulation”. Not so. First, what about bad independent/government regulation? That would be far worse than even bad self-regulation. Second, any bad self-regulation, which we have not had in Ontario since the advent of self-regulation, could be corrected by many means including legislation, not by permanently depriving the profession of self-regulation. Third, the long-term independence of the legal profession depends on two things, (1) not being governed by others and (2) not being owned by others. The public and our society in general have hugely and immeasurably benefited, and still do, from the uncompromised independence of the legal profession. That independence would be irreversibly and deleteriously compromised by loss of regulation or loss of ownership or both. Frankly, loss of either would inevitably result in loss of the other. We cannot let either happen if we truly care about the public interest and the profession.
Lawyers in general, and Convocation and the Law Society in particular, should regard self-regulation as a fragile privilege that must be nurtured and protected by wisdom, altruism, and competence at all times and at all costs. The Government, on the other hand, should regard self-regulation as an inviolable right. If both sides stick to those positions, we, I mean everyone in Ontario, will be all right. The professions and the governments in Australia and England/Wales tragically lost their way, the harms of which are becoming increasingly apparent to anyone with unfettered vision.
Further, even if I concede that it may be that “”lawyers” are conflicted by their self-interest in important respects”, it is assuredly not the case that the Law Society, the self-regulating body, is conflicted. The Law Society is mandated by legislation to govern in the public interest and it does so. It has been my privilege to serve with over 160 benchers since 1995 and, in all that time, the vast overwhelming majority of my fellow benchers (I can think of only two exceptions) have taken and do take that mandate very, very seriously.
I know of a group that most certainly, and at all times, would be conflicted by their self-interest – the non-lawyer profit-seekers who are lurking like vultures just waiting for us to be so stupid as to sell our profession to them. No group would be in more of a conflict of interest viz-a-viz the public than they.
You also say, “and loss of self-regulation could be necessary depending on the nature and extent of self-interested self-regulation.”
Loss of self-regulation should never be described as “necessary” for the reasons stated above. Why give the enemies of self-regulation any arrows at all? It is tactically unwise.
Forgive me but I think you are saying that in furtherance of your support for ABS on the theory that if we do not adopt the Blunder of the Century and allow profit-seeking corporations to buy us, then we will be guilty of self-interest. Not true. The best things we can do for the public are (1) denounce ABS for the evil that it is, (2) engage in an ongoing public education initiative at the paltry cost of $90 per member per year, and (3) recommend to the government effective ways to cut in half the ruinous time and cost of litigation – the area of law that constitutes, by far, by far, by far, the greatest barrier to access to justice.
Malcolm, I have known you like a brother for 30 years. You are one of the very finest and scintillatingly smartest people I have ever met, but your support, even the weakening support you still evince, for ABS is both catastrophic to the profession and the public interest, and intensely puzzling. I fervently hope that you and other erstwhile supporters of ABS will have the courage of epiphany and will eschew the worst idea to hit the profession in centuries, and will instead (1) strive to maintain the hard-won full and uncompromised independence of the legal profession, (2) fight against the greedy forces that would cartelize the delivery of legal services to the permanent detriment of the public and the profession, (3)be eternally vigilant in preserving our privilege/right of self-regulation, and (4) strive assiduously toward identifying and implementing effective ways (we pretty much already know them) to bring down the one horrific barrier to justice.
See you soon.
Brad
Brad
Not everything is about ABS.
When I say independent regulation, that is what I mean. I don’t support regulation that is not independent. I do think that self-regulation is not necessarily the only form of independent regulation that is conceivable and so I think it sensible that self-regulation not be constitutionaly enshrined.
I also think that it has to be admitted that, on some issues, the interests of the profession and the public interest may not be perfectly aligned. It is how we act on these issues that may put self-regulation at risk. The way though is genuine, careful and thoughtful examination of hard issues.
Malcolm
Malcolm,
ABS and self-regulation are bound together. If you lose self-regulation, you lose ownership of the profession. If you lose ownership of the profession, you lose self-regulation.
I am glad you agree that how we deal with the public interest is critical to retaining our privilege of self-regulation and that what we need is careful and thoughtful examination of hard issues. If those two statements represent your position, then, either today or soon, you will become vehemently opposed to ABS. ABS is already proving to lead to anti-competitive cartelization. That is contrary to the public interest. On that basis alone, you should be opposed to ABS. The evidence from England is that the public is not benefiting. The experts your task force consulted said so. The Lord Chief Justice also says so. On that basis as well, you should be opposed to ABS.
As bencher Stephen Goudge, as he then was, and many others have pointed out over the years, it is a false dichotomy to suggest that the interests of the profession and the public are at odds. Nothing is perfect, but one has to be careful that the cure is not worse than the disease. Independent regulation, as you term it, means government regulation as it is the government that would appoint the so-called independent regulators, and those not-so-independent appointees will know where their bread is buttered.
The Law Society is mandated by statute to regulate in the public interest, and it is demonstrable that we have. However, if we allow ourselves to become owned by profit-seeking corporations, whether as to 49% or more, who are by law required to advance the cause of their shareholders (and they will do so increasingly over time), then you may rest assured that the loss of self-regulation will follow as night the day because neither the public nor the government is ever going to long believe that we are not beholden to the new nonlawyer corporate paymasters.
As you know, in Aus and then England, the first thing to be lost was self-regulation. Loss of ownership then followed when the governments there decided to further weaken the legal profession by muddying the ownership and the ethos (the ethos will weaken over time – human nature and history prove it). Here, the ABS cabal would have us first lose ownership, but loss of self-regulation would certainly follow. And for what? The one and only real problem is the time and cost of litigation. ABS does nothing about that except to add two more layers of profit-takers to the equation – the plush head offices of the corporate owners and the returns demanded and commanded by the investors.
We do not need ABS to innovate. We do not need ABS to ameliorate the sky-high barrier of the cost of litigation. We do not need ABS to access funding for technology, the cost of which drops every day. We do not need ABS to educate the public. We do not need ABS for anything at all. So why do it? Because somebody wants to make money by being a ground-floor management consultant? Because somebody doesn’t have the basis-level skills to run their own small law office? Because some big law firms want to be owned by huge international conglomerates that dwarf the law firms?
If you think carefully and thoughtfully, if you care about the public interest, if you value the uncompromised independence of the legal profession and all the limitless benefits that that independence brings to the public, and if you want to make resolving litigious disputes affordable for almost all citizens, not just the wealthy or the subsidized, then you will (1) reject ABS for the irreversibly evil, time-wasting nonsense that it is, and (2) apply your considerable talents and experience assiduously toward crafting recommendations to reduce the time and cost of litigation.
Brad
Our self-governing status at risk; see: “Alternative Business Structures Proposals or Solving the Unaffordable Legal Services Problem,” on the, “Access to Justice in Canada” blog, March 6, 2015: http://accesstojusticeincanada.blogspot.ca/
Supporting arguments and cited authorities for the following statements are provided by my articles posted on the Social Science Research Network, at: http://ssrn.com/author=1398484 :
If LSUC had been managed well: (1) the unaffordable problem (“the problem”) would not exist; (2) nor would it be ignored while ABS proposals are being fast-tracked, even though they cannot solve the problem; (3) the duties in s. 4.2 of Ontario’s Law Society Act would not be ignored (’tis a breach of trust by a public officer-Cr. Code s. 122??); (4) taxpayers would not have to pay for a justice system that provides lawyers a good place to earn a living but doesn’t provide affordable legal services for those taxpayers; (5) the problem wouldn’t be causing more damage in one day than all of the incompetent and unethical lawyers have caused in the whole of Canada’s history (6) the legal profession would be expanding instead of contracting; because, (7) if legal services were affordable, lawyers would have more work than they could handle because people have never needed lawyers more; (8) law schools would be expanding their enrolments instead of being urged to contract them; (9) the problem would not be causing serious & increasing damage to the population, the courts, the legal profession, and to legal aid organizations because their funding varies inversely with the cost of legal services for taxpayers who finance legal aid’s free legal services; (10) there would be a published LSUC text that declares the problem to be its problem and duty to solve it, and accurately defines the problem; (11) Canada would not have a seriously “legally crippled” population and constitution-the Canadian Charter of Rights an Freedoms is a “paper tiger” without the help of a lawyer; (12) Canada’s justice system might again be “the envy of the world”; (13) the public statements of benchers would not show that they don’t understand the cause of the problem and haven’t tried to understand it; (14) LSUC’s webpage, “Your Legal Bill -To High?” wouldn’t tell the public that the problem is not the Law Society’s problem, as in effect it does; (15) LSUC’s website wouldn’t state that lay benchers “represent the public interest,” which is impossible now that we are well beyond the 19th century; (16) CanLII’s services would be upgraded in kind and volume to be a true support service, able to have a substantial impact upon the problem, and several other developed support services, all provided at cost, would together, provide a complete solution; (17) LSUC’s management would not be part-time management by amateurs-amateurs because benchers don’t have the expertise to solve the problem, nor are they trying to get it, nor are they joining with Canada’s other law societies to solve this national problem; (18) the Federation of Law Societies of Canada would not describe the problem as being one of mere “gaps in access to legal services” (see its Sept. 2012 text, “Inventory of Access to Legal Services Initiatives of the Law Societies of Canada” (1st paragraph), (19) LSUC would not be encouraging the use alternatives to lawyers, such as law students, self-help, and “unbundled, targeted” legal services, as a “cutting costs by cutting competence” strategy; and, (20) it would not be necessary to impose an Ontario version of the Clementi Report (UK, 2004) that would separate LSUC’s regulatory functions from its representative functions, to be exercised by separate authorities.
Benchers are senior, successful lawyers who are not personally being hurt by the problem, and most of whom, will relatively soon be happily retired. Benchers do the easy things and take a simplistic approach in functioning as benchers. It’s 19th century part-time charitable management that embellishes one’s career.
But an exception occurs when promoting something like ABS proposals, because there is money to be made by the firms that will represent the investors and could become investors themselves, owning strings of enfranchised law firms–investors whose purpose is to gain control of the legal services market and then control its prices.
Therefore the unaffordable legal services problem has been ignored by LSUC during all of the decades it has been developing.
Consider this “similar fact evidence”: LSUC was removed as the manager of Legal Aid because of; (1) its conflict of interest; and, (2) refusal to innovate. See the McCamus Report and the Report by Professors Zemans and Monaghan, both 1997 reports. The Legal Aid Services Act 1998, was the result, with LSUC no longer Legal Aid’s manager. The same causes are those that have caused and continued the unaffordable legal services problem. A different management structure is urgently needed, otherwise, go on suffering the legal profession’s very poor economic and professional future.
-– Ken Chasse, member, LSUC & LSBC.