Lawyers are agents who act for principals in dispute or legal problem resolution matters. Their work is impregnated with fiduciary duty and so, for each principal they represent (i.e. client), they cannot allow another interest to interfere with their loyalties.

Lawyers have to avoid conflicts of interest in regards to their objective presentation of legal advice to their clients but also as to avoid conflicts of interest in regards to other duties they have.

Integrity and ethics are, arguably, among the most valuable features of a lawyer's reputation and avoiding a conflict of interest is part and parcel of that.

A typical Canadian prohibition of a lawyer conflict of interest:

"The (Ontario) Rules of Professional Conduct (Rules) defines conflict of interest or conflicting interest as an interest (anything of importance or consequence) that would likely have an adverse effect on the lawyer’s judgment on behalf of, or loyalty to, a client or prospective client, or that a lawyer might be prompted to prefer to the interests of a client.

lawyer conflict of interest"Conflict of interest includes not only actual conflicts of interest but potential conflicts; interests that would likely have adverse effects, or that a lawyer might be prompted to prefer."

The Canadian Bar Association Code of Professional Conduct:

"The lawyer must not advise or represent both sides of a dispute and, save after adequate disclosure to and with the consent of the client or prospective client concerned, he should not act or continue to act in a matter when there is or there is likely to be a conflicting interest. A conflicting interest is one which would be likely to affect adversely the judgment of the lawyer on behalf of or his loyalty to a client or prospective client or which the lawyer might be prompted to prefer to the interests of a client or prospective client ...

"A lawyer who has acted for a client in a matter should not thereafter act against him (or against persons who are involved in or associated with him in that matter) in the same or any related matter, or place himself in a position where he might be tempted or appear to be tempted to breach the Rule relating to Confidential Information. It is not, however, improper for the lawyer to act against a former client in a fresh and independent matter wholly unrelated to any work he has previously done for that person."

The American Bar Association version differs little suggesting that the watershed test of a lawyer's conflict of interest is:

"..the representation of that client may be materially limited by the lawyer's responsibilities to another client, or by the lawyer's own interests."

In Aldrich v. Struk, Justice Finch (as he then was, later chief justice of the Court of Appeal for British Columbia):

"The rule is directed towards ensuring the lawyer's present ability to devote all of his skill and knowledge to the cause of his client of the moment. Any relationship, past or present, which impairs or compromises his ability to devote himself fully to his client's interests may be a reason for his inability to act or to continue to act."

Typical conflicts on interest, for a lawyer, include acting against a former client:

"... the principle upon which it [the Court] restrains a solicitor from acting against a former client is the prevention of abuse of the confidence reposed in the solicitor by his former client; accordingly, before an injunction can be obtained, the Court must be convinced of the existence of such confidence and of the probability of its being abused."1

In Regina and Spied, Justice Dyubin wrote:

"... no client has a right to retain a counsel if that counsel, by accepting the brief, puts himself in a position of having a conflict of interest between his new client and a former one."

Another species of conflict of interest for lawyers is purporting to represent both sides to a legal transaction such as a sale, a mortgage or litigation.

Yet another involves a lawyer seeking to act for multiple interested parties to an overlapping legal matter such as representing corporate entities with relevant documents while also representing a primary party to litigation.

The most serious may be allowing a personal conflict of interest to develop such as the co-mingling of a lawyer's personal funds in estate investments with a client.

Although the precise shine of authority on lawyers differs from jurisdiction, the tradition of the common law is that certified lawyers are officers of the court; this, even if those lawyers are actually certified to practise by some outside agency such as a bar association or a law society. As the lawyer is an officer of the court, the court has inherent jurisdiction over its officers, including that they keep clean from conflicts of interests.

But at the same time, almost all lawyers are also under the auspices of their rules of conduct and are subject to investigation and discipline if a conflict is raised.

Lawyers can be lawyers too and the potential for abusive use of the conflict of interest prohibition is alive and well:

In Sharp Electronics v Battery, Justice Keenan of the Ontario Superior Court of Justice wrote of the:

"... increase in the number of cases in which motions are brought to remove counsel from the record. The courts have become more and more alert to the use of "removal litigation" by one party to gain a tactical advantage over its opponent."

Or these words of Justice Esson of the British Columbia Supreme Court in Manville Canada Inc. v. Ladner Downs:

"No doubt, some of those applications are brought to prevent a risk of real mischief. But can there be any doubt that many are brought simply because an application to disqualify has become a weapon which can be used, amongst other things, to discomfit the opposite party by adding to the length, cost and agony of litigation. If that becomes a regular feature of our litigation it will not likely do much to improve the profession's standards in an area in which there seemed to have been few serious problems but it could do much to further reduce the court's ability to get judgment in a timely way."

But abusive applications are never something that should be encouraged. Already exacerbating judicial consideration of this issue is the plain fact that participants in the justice system constantly split hairs on the topic. Even an entire law book dedicated to the subject is unable to provide a definition instead referring to the very topic as:

"... an abstract concept that is highly value-driven ... the rules can be ... confounding and abstract... Conflict of interest is not only difficult for most clients to appreciate but it is probably equally difficult for lawyers...." 2

Unfortunately, the current generation of lawyers and judges have been unable to derive a cogent definition and policy on lawyer conflicts of interest. For so long as this wholly unsatisfactory state of affairs exists, the law on lawyer conflicts of interest will remain neither black on white nor white on black, but a morass of grey shapes on a like-coloured background.

REFERENCES:

  • Aldrich v. Struk, 1 BCLR (2d) 71 (BCSC, 1986)
  • Law Society of British Columbia, Code of Professional Conduct, 2012
  • Macdonald Estate v. Martin, [1990] 3 SCR 1235
  • Manville Canada Inc. v. Ladner Downs, 88 D.L.R. (4th) 208 (1992)
  • McNair, Deborah, Conflicts of Interest: Principles for the Legal Profession (Toronto: Canada Law Book, 2005 - NOTE 2)
  • Rakusen v. Ellis, Munday & Clarke, [1912] 1 Ch. 831 as summarized in Cordery's Law Relating to Solicitors, 7th ed. (1981), p. 71 [NOTE 1]
  • Regina and Spied, 8 CCC (3d) 18 (ONCA, 1983)
  • R. v. Neil, 2002 SCC 70