Duty of loyalty to client

Consulate Ventures Inc. v. Amico Contracting & Engineering (1992) Inc., 2010 ONCA 788, released today online, makes clear that a lawyer's duty of loyalty to the client is broader than just ensuring confidential information is not misused. Clients must be confident that their lawyers will not become their adversaries' lawyers at some subsequent point in the course of the same dispute. The Court holds:

[22]          Counsel submits that lawyers owe a duty of loyalty to their former clients.  That duty is not premised on or confined to confidentiality obligations, but flows from a broader concept of fidelity that is essential to the proper functioning of the client/solicitor relationship.  Clients must be able to speak frankly and without fear of exposure to their lawyers about their legal problems.  To do so, .  The prospect of one's lawyer switching sides must undermine the confidence essential to the operation of the client/solicitor relationship.  There is also concern that if lawyers act against former clients in the same manner, the public confidence in the integrity of the legal profession will suffer.  That confidence is crucial to the effective and just administration of justice. 

[23]          The Rules of Professional Conduct of the Law Society of Upper Canada ("Rules") offer cogent support for the duty of loyalty relied on by the respondent.  Rule 2.04(4)(a) provides:

(4)       A lawyer who has acted for a client in a matter shall not thereafter act against the client or against persons who were involved in or associated with the client in that matter

(a) in the same matter[.]

[24]          No doubt, the Rules are not binding on the courts:  MacDonald Estate at p. 1245.  The Rules are, however, a clear expression of the profession's concept of the duties owed to former clients.  That expression must be given considerable weight by the courts. 

[25]          This court long ago recognized a broad obligation not to act against former clients in the same dispute.  In Re R. and Speid (1983), 43 O.R. (2d) 596, a very strong panel of this court dealt with a Crown motion to disqualify the accused's lawyer.  That lawyer's partner had acted for the accused's wife in the same investigation.  She was now a principal Crown witness. 

[26]          Dubin J.A., speaking for himself, Martin J.A. and Robins J.A. (both former Treasurers of the Law Society), said this at p. 600:

A client has a right to professional services.  Ms. Nugent [the witness] had that right as well as Mr. Speid [the accused].  It was fundamental to her rights that her solicitor respect her confidences and exhibit loyalty to her.  A client has every right to be confident that the solicitor retained will not subsequently take an adversarial position against the client with respect to the same subject matter that he was retained on.  That fiduciary duty, as I have noted, is not terminated when the services rendered have been completed.  [Emphasis added.]

[27]          Speid and similar cases have been aptly described by P. Perell (now Perell J.) in Conflicts of Interest in the Legal Profession (Toronto:  Butterworths, 1995) at pp. 38-42 as the "turncoat cases".  In these cases, disqualification is not based on confidentiality concerns but rather "the need to foster and maintain public confidence in the integrity of the legal profession and in the administration of justice."