Today’s British Columbia decision in Robertson v. Slater Vecchio, 2008 BCCA 306 (CanLII) deals with whether the guidelines set out by the CBA for avoiding conflict when lawyers move from one firm to another are to be seen as strict rules or more as persuasive suggestions.
Broadly put the guidelines are more suggestions than rules.
Since the seminal decision of the Supreme Court of Canada in MacDonald Estate v. Martin 1990 CanLII 32 (S.C.C.), [1990] 3 S.C.R. 1235, 77 D.L.R. (4th) 249, so-called “Chinese walls” or “firewalls” have become common phenomena in Canadian law firms. The basic tenets of MacDonald Estate are well known: where a lawyer has received confidential information attributable to a solicitor-client relationship at one firm and then transfers to a new firm whose files would place him in a position of conflict, the law will infer that “confidences are likely to be disclosed” unless one can be satisfied, on the basis of “clear and convincing evidence”, that all reasonable measures have been taken to eliminate such risk. It is not sufficient for the lawyer merely to provide assurances or to swear an affidavit that no disclosure has occurred or will occur, or even to give an undertaking to this effect. Objective and verifiable standards must be in place such that “the public represented by the reasonably informed person would be satisfied that no use of confidential information would occur.” (MacDonald Estate, 1259-60.)
In response to the Court’s comments in MacDonald Estate, the Canadian Bar Association formulated a set of guidelines that have been adopted substantially by law societies across the country, to assist lawyers and their firms in meeting this high standard. In
Firm disqualification
7.4 If the transferring lawyer actually possesses confidential information relevant to a matter referred to in paragraph 7.2(a) respecting the former client that may prejudice the former client if disclosed to a member of the new law firm, the new law firm must cease its representation of its client in that matter unless:
(a) the former client consents to the new law firm’s continued representation of its client, or
(b) the new law firm establishes, in accordance with Rule 7.8, that:
(i) it is in the interests of justice that its representation of its client in the matter continue, having regard to all relevant circumstances, including:
(A) the adequacy of the measure taken under subparagraph (ii),
(B) the extent of prejudice to any party,
(C) the good faith of the parties,
(D) the availability of alternative suitable counsel, and
(E) issues affecting the national or public interest, and
(ii) it has taken reasonable measures to ensure that there will be no disclosure of the former client’s confidential information to any member of the new law firm. [Emphasis added.]
See Ontario Rule 2.04 which is similar.
The CBA Task Force report, “Conflict of Interest Disqualification: Martin v. Gray and Screening Methods”, dated February 1993 promulgated guidelines as follows:
1. The screened lawyer should have no involvement in the new law firm’s representation of its client.
2. The screened lawyer should not discuss the current matter or any information relating to the representation of the former client (the two may be identical) with anyone else in the new law firm.
3. No member of the new law firm should discuss the current matter or the prior representation with the screened lawyer.
4. The current client matter should be discussed only within the limited group that is working on the matter.
5. The files of the current client, including computer files, should be physically segregated from the new law firm’s regular filing system, specifically identified, and accessible only to those lawyers and support staff in the new law firm who are working on the matter or who require access for other specifically identified and approved reasons.
6. No member of the new law firm should show the screened lawyer any documents relating to the current representation.
7. The measures taken by the new law firm to screen the transferring lawyer should be stated in a written policy explained to all lawyers and support staff within the firm, supported by the admonition that violation of the policy will result in sanctions, up to and including dismissal.
8. Affidavits should be provided by the appropriate firm members, setting out that they have adhered to and will continue to adhere to all elements of the screen.
9. The former client, or if the former client is represented in that matter by a lawyer, that lawyer, should be advised:
(a) that the screened lawyer is now with the new law firm, which represents the current client, and
(b) of the measures adopted by the new law firm to ensure that there will be no disclosure of confidential information.
10. The screened lawyer should not participate in the fees generated by the current client matter.
11. The screened lawyer’s office or work station should be located away from the offices or work stations of those working on the matter.
12. The screened lawyer should use associates and support staff different from those working on the current client matter.
The British Columbia Court of Appeal found the guidelines are suggestive but not ironclad rules. The Court held:
[23] Mr. Robertson placed primary emphasis on the first ground of appeal, highlighting Slater Vecchio’s failure to comply with Guidelines 11 and 12, quoted above at para. 3. Although he was reluctant to agree with the suggestion that it is “practically impossible” for a small firm to comply with these requirements, he submitted that such firms must organize themselves so as to comply with all the Guidelines without exception. Not having done so, Slater Vecchio left open the risk that, for example, a legal assistant who had prepared a document on the impugned files might also work for Mr. Gordon, or that Mr. Gordon would have lunch with one of his co-workers or even socialize with them outside the office.
[24] With respect, this submission comes perilously close to treating the Guidelines in Appendix 5 to the Handbook as if they were mandatory rules that must be met in every case and in every detail – essentially the position adopted by Cory J. for the minority in MacDonald Estate. That position did not prevail. As mentioned earlier, Appendix 5 itself says that it is not possible to formulate “reasonable measures” that will be appropriate or adequate in every case and that adoption of only some of the Guidelines may be adequate in some cases. Thus Robertson J.A. observed for the Court in Bank of
… The Task Force observed that the greater the number of guidelines implemented the greater the chance of a screen's success. There is no reason to quibble with this proposition. It is consistent with clause 4(b)(i)(A) of the Law Society's conflict rules, which speaks of the "adequacy" of the measures taken to prevent disclosure of confidential information. However, this understanding does not detract from the reality that some guidelines are mandatory. Others are not. Some are more significant than others. Some relate to ethical matters. Others focus exclusively on the erection of an effective screen. …
In summary, disqualification is not automatic because of a failure to comply with all twelve of the Law Society's guidelines. To hold otherwise would be tantamount to saying that the professional bodies concerned were intent on adopting a comprehensive code of conduct. That approach is too impractical. The diversity of factual circumstances that can arise is documented in the law reports. This is one area of the law in which flexibility is required. [At paras. 56 and 60; emphasis added.]
The court must determine, then, not whether each of the Guidelines has been followed to the letter, but whether on the facts of the case the lawyer and his or her firm have met the “difficult burden” of the “reasonable member of the public” test formulated by the majority in MacDonald Estate.
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