Tom Jarmyn

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.

Conflict of Interest Defined

We all have a number of interests of varying importance at any one time.  Each of us also has a number of duties and obligations that we owe to others at any one time.  The relationship between our various interests, duties and obligations forms the basis for assessing whether an individual is in a conflict of interests.  A broad definition must deal with situations that range from professional to employment to fiduciary.

Michael MacDonald at UBC has defined a conflict of interest as a "situation in which a person, such as a public official, an employee, or a professional, has a private or personal interest sufficient to appear to influence the objective exercise of his or her official duties." This definition has a number of key elements:

1. The person has a defined status of employee, professional or public official with official duties
2. The person has a private or personal interest
3. The private or personal interest is sufficiently important
4. That it could appear to a third party ('objective exercise")
5. That the private or personal interest influences performance of official duties

MacDonald only sees three key elements in his definition and roles items 2 and 3 and 4 and 5 together into single key elements.  For the purposes of my analysis I will keep them separate as I think that the gradation of interest by importance and the requirement to consider the fact situation from the perspective of an objective third party is important.

In subsequent posts I will consider the application of this definition.