Ethics: A Case Every Civil Litigator Should Know
In May 2016, Justice Bondy of the Ontario Superior Court of Justice quietly released an important decision. A decision that every civil litigator should know because the principles enunciated in this case seem to elude many lawyers. Maybe greed blinds them, maybe wishful thinking envelopes them, or maybe it never occurs to them that they are in a conflict of interest. Either way, this pervasive behaviour is bringing the administration of justice into disrepute.
Far too often, plaintiff lawyers represent an injured child and his/her parents, who are also defendants by counterclaim. This is a conflict of interest. And in the case of Al Bidery v Cazzola, 2016 ONSC 3126, Justice Bondy sets out why.
In Al Bidery, defence counsel moved to have plaintiffs’ counsel removed as counsel of record based on a conflict of interest. Plaintiffs’ counsel represented a young child that was injured in a motor vehicle accident when she ran out onto the street from her house. The defendant driver counterclaimed against the child’s parents.
Justice Bondy proclaimed that to continue to represent both the parents and the child in this case was a conflict of interest. The counterclaim put the child’s interests at odds with the interests of her parents in their capacity as defendants. At paragraphs 19 and 24, Justice Bondy wrote:
[19] A “bright line” is provided by the general rule “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.”: see R. v. Neil, 2002 SCC 70 (CanLII), [2002] 3 S.C.R. 631, [2002] S.C.J. No. 72, at para. 29. [Neil] This bright line rule amounts to a clear prohibition: see McKercher, at para. 26. The rule is designed to ensure that “a divided loyalty does not cause the lawyer to soft-pedal his or her representation of a client out of concern for another client: see McKercher, at para 43; and Neil, at para. 19. [Emphasis added]
[24] …Plaintiffs’ counsel suggested that the counterclaim be dismissed in exchange for an agreement that the plaintiffs’ claims be limited to the damages attributable to the fault of the defendants B. Cazzola and P. Conchacha, and defendants by counterclaim, N. Nader, John Doe and Jane Doe. Defense counsel pointed out that if that were done, Sora would be denied not only recovery from her parents, but also recovery from tortfeasors jointly and severally liable for any negligence found on the part of her parents: see s. 1, Negligence Act, R.S.O. 1990, c. N.1. Plaintiffs’ counsel ultimately resiled from that suggestion. I find plaintiffs’ counsel’s suggestion on behalf of the parents clearly contrary to Sora’s interests. I find this to be a clear example of the “soft-pedaling” referred to in McKercher.
In addition to violating the duty of loyalty, representing both the child and the parents violated the duty of confidentiality. At paragraphs 34-36, Justice Bondy wrote:
[34] I begin with the observation that rule 3.4-2 of the Rules of Professional Conduct, provides that a lawyer shall not represent a client in a matter when there is a conflict of interest unless there is express or implied consent from all clients. Further, it must be reasonable for the lawyer to conclude that he or she is able to represent each client without having a material adverse effect upon the representation of or loyalty to the other client. An express consent must be fully informed and voluntary after disclosure.
[35] There was no evidence before me of such an express consent.
[36] There may be implied consent where, for example, the matters are unrelated. Another example is when the lawyer has no relevant confidential information from one client that might reasonably affect the representation of the other client. In this case, the matters are clearly related and plaintiffs’ counsel is privy to confidential information of both the child and her parents. To be clear, I am not bound by the Rules of Professional Conduct, but they do offer some insight into the standard of conduct expected as between lawyers and their clients.
I would add, even if express consent is provided, it is still a conflict of interest to represent both the child and the parents. How can a lawyer think that he or she is able to represent each client without adversely affecting the other?
The case of Al Bidery should serve as a guiding light to all counsel. A lawyer cannot represent both the plaintiff and the defendant within the same action.
I totally agree with the judge. Years ago, when I was Public Trustee in Saskatchewan, I was asked to approve a settlement of a personal injury action on behalf of a child, in which the settlement amount was reduced by the amount of the parents’ contributory negligence. I was outraged – the amount being paid to the child should not have been reduced. Instead, the parents should have anted up their share. But of course, counsel didn’t see it that way!
Now for some reality.
It’s called follow the money.
Imagine that, under any realistic assessment of the value of the child’s.claim, that value isn’t more than $X (even in Ontario). Also. Imagine that the the liability limits of the C/C group are far, far, far, far, far …. more than $X such that it’s implausible that any judge or jury acting properly could award the child anything approaching the limits, even by a parsec. Imagine that what’s left in the liimits is also more than enough for any reasonable assessment of the FLA claims, even if the parent(s) were also at fault. Imagine that there’s no real basis for the CONTRIBUTION claim against the parents and that it’s been brought as a matter of (ahem) tactics and pressure. And imagine, as seems to be the case, that the parents didn’t have the proverbial tin pot to piss in. Is there actually a conflict? Would a competent lawyer providing the child or even the litigation guardian see any need to worry that the child’s lawyer might find herself or himself forced to chose between the interests of the child and of the parents.
None of these questions were adequately considered if we take the reasons at face value.
Or try this: on the reasons taken at face value was justice done?
Maybe the judge should have referred this to the law society?
The plaintiffs lawyer would have a tough time defending this
motion while at the same time preserving his clients confidences and privileges.
So the judge should not have taken an adverse inference from the lack
of evidence of waiver of conflict.
I have a problem with judges interpreting (or setting) professional standards
without referring to data and policy analysis which these regulatory bodies are required to gather, analyze and factor into their policy determinations.
You might say it goes outside the bounds of judicial notice.
Mr. Semenoff
On the facts the judge recounted in the reasons there WAS IN FACT NO ACTUAL CONFLICT.
I’ve explained why in comments above.
Even if there was, the lawyer lost the file and would, in any event, have to keep what he learned that he ought not to have confidential. He could not disclose. The nature of the apparent conflict, on its face, would not be one that the judge would report to anyone. (Text corrected for grammar: DC)
Mr. Cheifetz I agree with your observation that on the facts, the risk of conflict is probably low.
I would just take it a step further. The lawyer should have been allowed to go on
even if there was a conflict.
If the judge left that to the law society, they would (or should) evaluate
the families financial need to rely on one lawyer despite potential conflict.
Then the family has access to the lawyers liability insurance if the court case goes wrong,
and their daughter will then receive the care she needs regardless of the litigation risk.
Which is as it should be.
But the judge has foreclosed that now. The judge has prevented a
potential insurance fund claim.
I think the judge relied on an unexpressed political opinion of what lawyer’s insurance is for.
But the government implements all kinds of policies of wealth redistribution.
We pay taxes. We get programs. We get handouts.
That family now has to mortgage their house
to get the best lawyer money can buy just to fight with the auto insurance lawyer
on the chance the contribution defense might succeed at trial.
I think the justice system would be well-served by avoiding those kinds of scenarios.
Sure there is the flood-gates argument. But that is matter of evidence-based policy
setting that should be left to those who actually have the data. And this in turn
leads to more acceptable decisions overall.
I am aware that, at least in BC, insurance premiums are paid by lawyers
(and indirectly their clients). Many lawyers want the premiums kept low.
Maybe the solution is that liability insurance be funded by the government
from general taxes. I would suggest it’s in the legal profession’s own interest
to make this happen, or at least look at it.
Mr. Cheifetz
“I agree with your observation that on the facts, the risk of conflict is probably low.
I would just take it a step further. The lawyer should have been allowed to go on
even if there was a conflict.”
On the facts as reported, there was no conflict. If there was any real potential conflict, that could have been handled with independent legal advice.
“If the judge left that to the law society, they would (or should) evaluate
the families financial need to rely on one lawyer despite potential conflict.”
It’s not a law society issue but my telling you that won’t convince you it is so I’ll say nothing more on that.
“Then the family has access to the lawyers liability insurance if the court case goes wrong,
and their daughter will then receive the care she needs regardless of the litigation risk. Which is as it should be. But the judge has foreclosed that now. The judge has prevented a
potential insurance fund claim.”
It’s not likely that lawyer’s liability insurance would ever apply.
“I think the judge relied on an unexpressed political opinion of what lawyer’s insurance is for.”
I doubt it but that’s not a discussion I’m willing to have with you.
“But the government implements all kinds of policies of wealth redistribution.
We pay taxes. We get programs. We get handouts. ”
Not relevant
“That family now has to mortgage their house to get the best lawyer money can buy just to fight with the auto insurance lawyer on the chance the contribution defense might succeed at trial.”
Very very very very very …. unlikely. Especially in BC.
“I think the justice system would be well-served by avoiding those kinds of scenarios.”
Yes, limited to what happened here on the facts.
“Sure there is the flood-gates argument. But that is matter of evidence-based policy
setting that should be left to those who actually have the data. And this in turn
leads to more acceptable decisions overall.”
There’s no floodgates arguments.
“I am aware that, at least in BC, insurance premiums are paid by lawyers
(and indirectly their clients).”
If you are referring to lawyer’s liability insurance, so what.
“Many lawyers want the premiums kept low.”
So. You want your vehicle insurance premiums kept low; your house insurance premiums kept low; may or may not have voted for the Vancouver tax increase to fund public transit upgrades but still want the cost of the Canada Line etc. kept low; and may well complain about the cost of lift tickets on Whistler (or parking in downtown Vancouver.)
“Maybe the solution is that liability insurance be funded by the government
from general taxes.”
I’m sure the profession would love that but who pays for lawyers E&O has nothing whatsoever to do with any of the issues in the Ontario case that should never have been decided as it was (on the facts as they’re reported) and shouldn’t have been complained about (as it was) on the facts that are reported.
“I would suggest it’s in the legal profession’s own interest to make this happen, or at least look at it.”
I’m sure there are a more than a few lawyers in BC who’d be happy to let you speak to the legislature about your recommendation.
David Cheifetz