Conflict of Interest Definition:

Company Law

The author of Director Duties wrote:

"A conflict of interest occurs where a personal interest is sufficiently connected with public or professional duties that it results in a reasonable apprehension that the personal interest may influence the exercise of professional or public responsibilities. Conflicts of interest can arise for directors when they or their friends of family stand to benefit financially from the actions of the board of directors, or when a director serves two or more organizations that may have adverse interests. As conflicts of interest can be both direct and indirect, directors must be vigilant in thinking about and identifying possible personal conflicts of interest."

Politics

In Old St. Boniface, Justice Sopinka wrote, in a municipal law case:

"I would distinguish between a case of partiality by reason of pre-judgment on the one hand and by reason of personal interest on the other.  It is apparent from the facts of this case, for example, that some degree of pre-judgment is inherent in the role of a councillor.  That is not the case in respect of interest.  There is nothing inherent in the hybrid functions, political, legislative or otherwise, of municipal councillors that would make it mandatory or desirable to excuse them from the requirement that they refrain from dealing with matters in respect of which they have a personal or other interest.  It is not part of the job description that municipal councillors be personally interested in matters that come before them beyond the interest that they have in common with the other citizens in the municipality.  Where such an interest is found, both at common law and by statute, a member of Council is disqualified if the interest is so related to the exercise of public duty that a reasonably well-informed person would conclude that the interest might influence the exercise of that duty. 

"This is commonly referred to as a conflict of interest."

Lawyers

In Michel, Alberta's Court of Appeal wrote:

"A conflict of interest need not be a conflict of duties. It may be a duty to do one thing, and a financial or other interest or desire to do the opposite."

In R. v Neil, Justice Binnie of Canada's Supreme Court wrote:

"I adopt ... the notion of a conflict in ... as a substantial risk that the lawyer’s representation of the client would be materially and adversely affected by the lawyer’s own interests or by the lawyer’s duties to another current client, a former client, or a third person."

REFERENCES:

• Duhaime, Lloyd, Labour Law (Unions and Collective Bargaining) - A Primer: "The system defers to expediency - even over justice - and with expediency comes arbitrary decisions. For example, ... in one case, I felt that the BC Labour Relations Board member might of had a private arbitration practice and possibly clients including the othr side in my case. I was never able to find out although, with no credit to my rumblings, the BC LRB later and very quietly adopted a conflict of interest rule."
• Michel v. Lafrentz, 4 C.P.C. (3d) 155 (ABCA, 1992)
• Old St. Boniface Residents Assn. Inc. v. Winnipeg (City), [1990] 3 S.C.R. 1170
• Reiter, Barry, Directors Duties in Canada (3rd ed.) (Toronto: CCH Canadian Ltd, 2006). Cited with approval in Rakowski v. Malagerio, 28 B.L.R. (4th) 126 (2007)
• R. v. Neil, 2002 SCC 70