Lawyer-Client Bond Broken: The Unwritten Rule

Written by Daniel Standing LL.B., Editor, First Reference Inc.

Faced with a unique set of facts, an Ontario court in 2022 ONSC 5890 (CanLII) let two in-house lawyers off the hook when their former client sued them following the breakdown of their employment relationship. Would-be litigants in situations like the plaintiff’s would do well to remember that things aren’t always as they at first seem. It should almost go without saying: litigants had better have the evidence to prove it if they allege a breach of contractual or fiduciary duties.

Background

The two lawyers were part of a four-person in-house legal team at a fibre optics company based in Ottawa. At the time they came aboard, the company was embroiled in litigation with numerous soccer-related entities.

The lawyers took instructions from the company’s CEO. The lawyers’ relationship with company leadership became strained as the lawyers’ concern mounted that the CEO was asking them to do things that were unethical and contrary to “black letter law.” For example, at one point, the lawyers were told to bring a motion asking the entire Ottawa judiciary to recuse itself. Any ordinary lawyer would, quite reasonably, think it was a joke. Only, it wasn’t.

Faced with impossible demands and convinced their advice always went unheeded, eventually, the lawyers concluded the solicitor-client relationship had broken down. The day after a particularly acrimonious phone call, one of the lawyers had a stroke that she said was brought on by the CEO’s screaming. It put her off work for two-and-a-half years, on medical orders to avoid stressful work. The other lawyer resigned, but, after a while, reluctantly agreed to keep working part-time on the litigation file anyway. (It’s worth the time reading this case for the man’s explanation alone.) When the CEO failed to convince him to return to work full-time hours, the CEO accused the lawyer of mutiny. Meanwhile, tired of what the lawyers considered a toxic work environment, they started down the path toward being removed as lawyers of record.

Ultimately, new lawyers took over the company’s soccer litigation, which didn’t go the company’s way. Nor did the company’s appeal, which alleged, in part, that the result happened because the lawyers were ineffective.

Undeterred, and apparently still with a bone to pick against the lawyers, the CEO sued them, alleging they breached their employment contracts and their fiduciary duty, and that they conspired with intent to injure the company. The CEO alleged the lawyers made disparaging remarks about the company and questioned the CEO’s character, and that they called the workplace “a dump,” that they’d pushed back against lawful directions and conspired to quit at a horrible time, all of which caused damages of more than $10 million.

For their part, the lawyers’ strategy was shockingly succinct and simple: there was no evidence supporting any aspect of the claim.

The court’s decision

The matter proceeded by way of a motion for summary judgment, the expedited procedure for determining whether it could be resolved without a full trial.

Justice Vermette began by addressing various evidentiary and procedural matters. Leaving those aside for present purposes, the court said there was no breach of contract. Focusing on its post-resignation clause that required continued legal services until a suitable replacement could be hired, the court said the lawyer who had a stroke didn’t resign, and her withdrawal from the soccer action during a time of incompetence conformed with her ethical duty to her client. The judge said it was preposterous to say her absence for medical reasons was proof of a coordinated intent to harm the company or its CEO. While the other lawyer did, in fact, resign, there was nothing in the contract stipulating he had to continue working full-time.

As for the lawyers’ internal Emails that were, at times, critical of the CEO and his litigation strategy, the court said there was no breach of confidentiality, and the lawyers upheld their duty to the client by trying to act in its best interests. The judge said that by pushing back against the CEO’s directions, the lawyers complied with their duty of candour. Their private complaints about their boss or the work environment weren’t offside their ethical duties to their client.

Finally, the court sided with the lawyers’ point that there was no evidence of the negligence and conspiracy to injure claims that would warrant damages. The facts didn’t show any form of conspiracy or, as the CEO put it, mutiny. There was no reason to think the lawyers would have made any difference to the outcome of the soccer file, and no evidence that their removal poisoned the Ottawa courts against the plaintiff. In the absence of any proven damages, the lawyers obtained summary judgment and the lawsuit hanging over their heads was lifted.

Key takeaways

When some work relationships go sour, like solicitor-client ones, getting out isn’t as simple as saying, “I quit.” Professional, ethical or contractual duties may get in the way and protect a party, such as an employer, from being hung out to dry.

This case shows that there are times when good reasons exist for even such highly scrutinized and protected relationships to come to an end. In deciding to challenge bona fides of a work relationship breakdown, for example, by claiming mutinous conspiracy, having the evidence to support the argument being advanced is critical. This lesson can also be applied outside the highly unique context in this case since, broadly speaking, when an employer contemplates dismissal or other disciplinary action, it had better be able to prove it.

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