Tom Jarmyn

State of Mind and Privilege

This decision from the BC Supreme Court in the matter of Canadian Community Reading v. Ewanchyna et al., canvasses two issues: 1) can there be a partial waiver of privilege; and, 2) what happens when a party puts its legal state of mind in play.

Ewanchyna was a member of the Board of the Canadian Community Reading Plan (CCRP).  CCRP was attempting to decide whether to negotiate the sale of a portion of its business to a competitor.  Ewanchyna was unhappy with this and consulted counsel.  That counsel commenced a petition alleging oppression which was discontinued three weeks later.  CCRP commenced an action against Ewanchyna alleging that he had disclosed confidential information, violated his fiduciary duty as a director and adversely affected the sale prospects of CCRP.  Ewanchyna defended on the grounds that the petition was filed by mistake and without his instruction.

CCRP sought production of a number of document and communications between Ewanchyna and his solicitors.  Ewanchyna disclosed some documents in redacted form but, in general, resisted the application.  One of the interesting things to note is that Ewanchyna appears to have been represented in this application by the same solicitors who are alleged to have mistakenly filed the position.  Given that is their advice, actions and evidence that are at the heart of the matter I am surprised that they tried to stay on the record.

In responding to the application Ewanchyna did not file an affidavit testifying that he did not give instructions to file the petition.  

The court concluded two things: 1) it is not possible to partially waive privilege.  Once it is waived it is gone; and, 2) when a party puts their legal state of mind into issue then all of the advice that goes into the making up of that legal state of mind is in play.  

Transparency of Ethics Opinions

The Chronicle of Higher Education summarizes this dispute with respect to transparency of ethics opinions. William Simon has written that ethics opinions should be publicly available and scrutinized just like another academic article. This proposition has been vigorously opposed by those who are in the business of preparing such opinions. The Chronicle article summarizes the dispute nicely.

Simon is one of the legal ethicists who is predisposed toward protection of the public interest and social concerns. For him, ethics is less about protecting the legal profession and more about ensuring the that profession looks after the public interest and achieves social good. When various rules of ethics conflict with the achievement of the public good then those rules should be modified to bring the good about.

I continue to wonder whether fewer lawyers would leave the profession if it focused on the achievement of justice and the public good

I also wonder whether the Canadian Bar Association, which is essentially a lobby association for lawyers and exists to promote the interests of lawyers, should be drafting codes of conduct for lawyers or opining on what constitutes a conflict of interest. It is similar to the fox guarding the henhouse.

The importance of education to lawyers

This is an interesting article from the Manila Standard which discusses the necessity of ethics training but wonders whether starting out in law school is too late. As the author notes, in a manner consistent with Aristotle's thoughts on virtue ethics, a good character is something that begins to be formed at the earliest stages of life and that maybe it is too late in law school to try to fix this problem.

If that is so then one way to address it is to keep people out of the profession who do not meet minimum standards of ethical conduct. Possibly if we determined the what sorts of traits were characteristic of the ethical lawyer and then made their recognition and cultivation prerequisites to entry we would be more successful.

However, the other aspect of the problem is that no screening system will ever keep all of the ne'er do wells out. We must also have a system that reinforces ethics for those in the profession, that strictly and swiftly punishes transgressors and removes their ill gotten gains.

One wonders about law society disciplinary processes and where the bias in their processes is. From what I have seen their is a predisposition to protecting the rights of the individual lawyer who is accused of misconduct or failure to follow rules. My thought is that protection of the public should be the paramount interest in these processes and that there is nothing wrong with putting the burden of proof on a lawyer who is alleged to have violated standards of professional conduct. After all there is no right to practice law - it is a privilege that is earned.

New Cdn Bar Association Report on Conflict of Interests

I am just in the process of digesting the report of the CBA Task Force on Conflicts of Interest.  But my first gut reaction is that the CBA, having had their submissions largely ignored by the Supreme Court of Canada in Neil and Strother, is trying to put the genie back in the bottle.  It seems that they have done some good work on duties after termination of a retainer which was really undefined.  But I am afraid that they have really undone that good work by trying to assert the proposition that lawyers can act against current clients.

At p. v of the report the task force falls for an amendment to law society rules that would:

4.   provide that a lawyer may act in a matter which is adverse to the interests of a current client provided that:
     a. the matter is unrelated to any matter in which the lawyer is acting for the current
client and
     b.  no conflicting interest is present;

This is unreasonable.  Lawyers should not be permitted to act against the interests of present clients.  Simply by virtue of that representation a lawyer gains personal information about his/her client.  S/he learns about frailties and sensitivities.  S/he also cannnot be certain that the matters will not be related at some time in the future. 

I could understand a rule that attempted to deal with a situation where it was not apparent that the interests were adverse and therefore a benchmark needed to be established as to how and when a lawyer would be required to terminate a relationship or carry on.  But establishing a broad rule that permits a lawyer to act against a current client is over the top.  I presume then, that if a lawyer acts against a current client on the grounds that there is not conflict of interest and that lawyer turns out to be wrong, that the lawyer will be prepared to reimburse all of the fees paid and be responsible for the damages flowing from their misjudgment.

The other part of the discussion about engagement letters was essentially - really good idea but we are not certain that it would be convenient for lawyers.  Funny, I used engagement letters for all of my clients.

Values and the conduct of legal proceedings

Is there a correlation between the values of legal counsel and the way in which they conduct legal proceedings?  In other words 'Do personal beliefs of legal counsel affect the way they prosecute claims?'  The reason this question is important is that if there is a correlation then we could the system could affect things like bringing forward obviously implausible claims, lengthy trials and other unwanted conducts by changing those values through education, training or sanction.

Professional Responsibility

I am attending a conference on Social Technology for the non-profit sector in Toronto.  Which got me to thinking how things might be different if we treated matters of professional responsibility as a collaborative exercise among citizens.  The Canadian Bar Association's Code of Professional Conduct says that the overriding purpose is the protection of the public interest.  Similar statements are contained in the enabling statutes for the various provincial law societies.

Would things look any different if there was a broader participation in the writing and adjudication of professional codes of conduct?  Could we end up with a situation in which there were tiers of assessment of conduct?

For example, we already have four tiers of assessment for conduct: 1) the marketplace - client's do not go to lawyers who have a reputation for treating clients poorly; 2) the discipline process; 3) civil court where clients pursue remedies for wrongs to them; and, 4) criminal court where the state pursues remedies with respect to conduct that is particularly egregious (criminal).

Is there a place for a tier between the market and the discipline process which has objective standards but is much more focused on how lawyer's conduct themselves in society.  That market is imperfect in that it is very difficult to get information about lawyers beyond whether or not they have been disciplined and are in good standing.  Information about reputation is hard to come by.  Is there some more relevant vehicle of looking at these matters.

Conflict of Interest

Lubs v Ahmad is a decision of the Saskatchewan Queens Bench on the issue of conflict of interest.  The plaintiff Lubs was married to Marc Baltzan until 1980 when they separated and entered into a detailed separation agreement.  Baltzan then married the defendant Ahmad.  The plaintiff alleges that before Baltzan died Ahmad induced him to breach the separation agreement and that she received a benefit as a result of those breaches.

The detailed separation agreement was drafted by Tom Gauley.  The Plaintiffs retained the firm of MacDougall Gauley to represent her in the litigation.  MacDougall Gauley put in place practices to ensure that Tom Gauley received no information and the evidence was clear that all of the files with respect to the drafting of the agreement had been destroyed.

MacDougall Gauley received notice of the alleged conflict and went to the Law Society's ethics committee to get an advisory opinion on this.  A majority of the committee was of the opinion there was no conflict and the plaintiffs choice of counsel should be deferred to.

I find this conclusion astonishing.  The practical reality is that the terms of the agreement were going to be in play in the litigation.  The fact that Baltzan had died meant that one of the only sources of information with respect to Baltzan's state of mind when he entered into the agreement was Gauley.  This is the best evidence of the understanding of the agreement.  The other issue is that it is plain that Gauley would have confidential information about Baltzan's assets and affairs.

Ahmad made an application to Court to disqualify MacDougall Gauley.  The court concluded there was a conflict and that this condition could not persist.  The court agreed that chinese walls were a useful tool but they were a tool to be used to ameliorate a conflict that had arisen and not something that should be used to create a situation where a conflict could exist.

Why must a lawyer keep information confidential?

An individual is charged with a crime.  A lawyer's client tells him/her a piece of information prior to trial.  That information will establish the guilt of the client.  The lawyer is not permitted to disclose this information to anyone.  Why not?

The Crown calls a witness who testifies to the critical event.  The client directs the lawyer to impeach the witness even though he knows that the witnesses testimony is correct.  Should the lawyer proceed to impeach the witness?

I am going to try and work through these issues over the next few days.

Disclosure of Information

Jack Goldsmith was the head of the Office of Legal Counsel in the White House and has written a book called the Terror Presidency in which he discusses his tenure and in particular the issues arising from the so-called 'Torture Memo'.  The ethical issues arising from a lawyer writing a book about his tenure as legal counsel, his advice and events in which he as involved are discussed in some detail at Legal Ethics Forum and in detail here by Michael Paulsen at Balkinization.

People at focal points in history often want to make the case regarding their involvement and the decisions they made - Lawyers (particularly those who are explicitly acting as legal counsel) are greatly limited in what they can do.  Contemporary recitations like Mr. Goldsmith's are very problematic as they must relate legal advice and analysis that are current and often provide context based upon conversations and events that the author would not have been privy to if that person was not a lawyer.

As time passes this becomes less problematic (particularly as others write books or the events become commonly known) but writing this book four years after the events that form its basis is questionable.

Fiduciary Duty Persists

Skerpjen v Johnson is a decision from BC regarding fiduciary duties.  In this case the applicant had retained the law firm on a number of unrelated proceedings.  The last two (most recent) retainers were litigation around the breakdown of business relationships.  Both retainers seemed to be relatively complicated.  This action also related to the breakdown of the business relationship.

The Applicant said that the lawyers had gained detailed confidential information about him, the way that he conducted litigation, his tolerance for risk and his business interests.  His evidence related directly to the factors listed in Macdonald v Martin Estate.  The Court concluded that while the matters were unrelated they were sufficiently similar that "...the disclosure falls within a category of confidential information that might permit the law firm to take advantage of him in the current litigation" (para 25).  As a result the court found that the fiduciary duty of the firm to the lawyer was breached by their acting against him.