Chapter 3 – Relationship to Clients

3.1 Competence

Definitions

3.1-1 In this rule “Competent lawyer” means a lawyer who has and applies relevant knowledge, skills and attributes in a manner appropriate to each matter undertaken on behalf of a client and the nature and terms of the lawyer’s engagement, including:

  • knowing general legal principles and procedures and the substantive law and procedure for the areas of law in which the lawyer practises;
  • investigating facts, identifying issues, ascertaining client objectives, considering possible options and developing and advising the client on appropriate courses of action;
  • implementing as each matter requires, the chosen course of action through the application of appropriate skills, including:
  • legal research;
  • analysis;
  • application of the law to the relevant facts;
  • writing and drafting;
  • negotiation;
  • alternative dispute resolution;
  • advocacy; and
  • problem solving;
  • communicating at all relevant stages of a matter in a timely and effective manner;
  • (e) performing all functions conscientiously, diligently and in a timely and cost-effective manner;
  • (f) applying intellectual capacity, judgment and deliberation to all functions;
  • (g) complying in letter and spirit with all rules pertaining to the appropriate professional conduct of
  • lawyers;
  • (h) recognizing limitations in one’s ability to handle a matter or some aspect of it and taking steps
  • accordingly to ensure the client is appropriately served;
  • (i) managing one’s practice effectively;
  • (j) pursuing appropriate professional development to maintain and enhance legal knowledge and
  • skills; and
  • (k) otherwise adapting to changing professional requirements, standards, techniques and practices.

Competence

3.1-2 A lawyer must perform all legal services undertaken on a client’s behalf to the standard of a competent lawyer.


Commentary

  • As a member of the legal profession, a lawyer is held out as knowledgeable, skilled and capable in the practice of law. Accordingly, the client is entitled to assume that the lawyer has the ability and capacity to deal adequately with all legal matters to be undertaken on the client’s behalf.
  • Competence is founded upon both ethical and legal principles. This rule addresses the ethical principles. Competence involves more than an understanding of legal principles: it involves an adequate knowledge of the practice and procedures by which such principles can be effectively applied. To accomplish this, the lawyer should keep abreast of developments in all areas of law in which the lawyer practises.
  • In deciding whether the lawyer has employed the requisite degree of knowledge and skill in a particular matter, relevant factors will include:
    (a) the complexity and specialized nature of the matter;
    (b) the lawyer’s general experience;
    (c) the lawyer’s training and experience in the field;
    (d) the preparation and study the lawyer is able to give the matter; and
    (e) whether it is appropriate or feasible to refer the matter to, or associate or consult with, a
    lawyer of established competence in the field in question.
    [4] In some circumstances, expertise in a particular field of law may be required; often the necessary
    degree of proficiency will be that of the general practitioner.
    [4A] To maintain the required level of competence, a lawyer should develop an understanding of, and
    ability to use, technology relevant to the nature and area of the lawyer’s practice and
    responsibilities. A lawyer should understand the benefits and risks associated with relevant
    technology, recognizing the lawyer’s duty to protect confidential information set out in section 3.3.
    [4B] The required level of technological competence will depend upon whether the use or
    understanding of technology is necessary to the nature and area of the lawyer’s practice and
    responsibilities and whether the relevant technology is reasonably available to the lawyer. In
    determining whether technology is reasonably available, consideration should be given to factors
    including:
    (a) The lawyer’s or law firm’s practice areas;
    (b) The geographic locations of the lawyer’s or firm’s practice; and
    (c) The requirements of clients.
    [5] A lawyer should not undertake a matter without honestly feeling competent to handle it, or being
    able to become competent without undue delay, risk or expense to the client. The lawyer who
    proceeds on any other basis is not being honest with the client. This is an ethical consideration
    and is distinct from the standard of care that a tribunal would invoke for purposes of determining
    negligence.

3.2 Quality of Service

Quality of Service

3.2-1 A lawyer has a duty to provide courteous, thorough and prompt service to clients. The quality of service required of a lawyer is service that is competent, timely, conscientious, diligent, efficient and civil.


Commentary

  1. This rule should be read and applied in conjunction with section 3.1 regarding competence.
  2. A lawyer has a duty to provide a quality of service at least equal to that which lawyers generally expect of a competent lawyer in a like situation. An ordinarily or otherwise competent lawyer may still occasionally fail to provide an adequate quality of service.
  3. A lawyer has a duty to communicate effectively with the client. What is effective will vary depending on the nature of the retainer, the needs and sophistication of the client and the need for the client to make fully informed decisions and provide instructions.
  4. A lawyer should ensure that matters are attended to within a reasonable time frame. If the lawyer can reasonably foresee undue delay in providing advice or services, the lawyer has a duty to so inform the client, so that the client can make an informed choice about his or her options, such as whether to retain new counsel.

    Examples of expected practices
  5. The quality of service to a client may be measured by the extent to which a lawyer maintains certain standards in practice. The following list, which is illustrative and not exhaustive, provides key examples of expected practices in this area:
  • keeping a client reasonably informed;
  • answering reasonable requests from a client for information;
  • responding to a client’s telephone calls;
  • keeping appointments with a client, or providing a timely explanation or apology when unable to keep such an appointment;
  • taking appropriate steps to do something promised to a client, or informing or explaining to the client when it is not possible to do so;
  • ensuring, where appropriate, that all instructions are in writing or confirmed in writing;
  • answering, within a reasonable time, any communication that requires a reply;
  • ensuring that work is done in a timely manner so that its value to the client is maintained;
  • providing quality work and giving reasonable attention to the review of documentation to avoid delay and unnecessary costs to correct errors or omissions;
  • maintaining office staff, facilities and equipment adequate to the lawyer’s practice;
  • informing a client of a proposal of settlement, and explaining the proposal properly;
  • providing a client with complete and accurate relevant information about a matter;
  • making a prompt and complete report when the work is finished or, if a final report cannot be made, providing an interim report when one might reasonably be expected;
  • avoiding the use of intoxicants or drugs, that interfere with or prejudice the lawyer’s services to the client;
  • being civil.
  1. A lawyer should meet deadlines, unless the lawyer is able to offer a reasonable explanation and ensure that no prejudice to the client will result. Whether or not a specific deadline applies, a lawyer should be prompt in handling a matter, responding to communications and reporting developments to the client. In the absence of developments, contact with the client should be maintained to the extent the client reasonably expects.

Amended April 22, 2016

Limited Scope Retainers

3.2-1A Before undertaking a limited scope retainer the lawyer must advise the client about the nature, extent and scope of the services that the lawyer can provide and must confirm in writing to the client as soon as practicable what services will be provided


Commentary

  1. Reducing to writing the discussions and agreement with the client about the limited scope retainer assists the lawyer and client in understanding the limitations of the service to be provided and any risks of the retainer.
  2. A lawyer who is providing legal services under a limited scope retainer should be careful to avoid acting in a way that suggests that the lawyer is providing full services to the client.
  3. Where the limited services being provided include an appearance before a tribunal a lawyer must be careful not to mislead the tribunal as to the scope of the retainer and should consider whether disclosure of the limited nature of the retainer is required by the rules of practice or the circumstances.
  4. A lawyer who is providing legal services under a limited scope retainer should consider how communications from opposing counsel in a matter should be managed (See rule 7.2-6A).
  5. This rule does not apply to situations in which a lawyer is providing summary advice, for example over a telephone hotline or as duty counsel, or to initial consultations that may result in the client retaining the lawyer

Honesty and Candour

3.2-2 When advising a client, a lawyer must be honest and candid and must inform the client of all information known to the lawyer that may affect the interests of the client in the matter.


Commentary

  1. A lawyer should disclose to the client all the circumstances of the lawyer’s relations to the parties and interest in or connection with the matter, if any that might influence whether the client selects or continues to retain the lawyer.
  2. A lawyer’s duty to a client who seeks legal advice is to give the client a competent opinion based on a sufficient knowledge of the relevant facts, an adequate consideration of the applicable law and the lawyer’s own experience and expertise. The advice must be open and undisguised and must clearly disclose what the lawyer honestly thinks about the merits and probable results.
  3. Occasionally, a lawyer must be firm with a client. Firmness, without rudeness, is not a violation of the rule. In communicating with the client, the lawyer may disagree with the client’s perspective, or may have concerns about the client’s position on a matter, and may give advice that will not please the client. This may legitimately require firm and animated discussion with the client.

Language Rights

3.2-2A A lawyer must, when appropriate, advise a client of the client’s language rights, including the right to proceed in the official language of the client’s choice.

3.2-2B Where a client wishes to retain a lawyer for representation in the official language of the client’s choice, the lawyer must not undertake the matter unless the lawyer is competent to provide the required services in that language.

Amended May 22, 2015


Commentary

  1. The lawyer should advise the client of the client’s language rights as soon as possible.
  2. The choice of official language is that of the client not the lawyer. The lawyer should be aware of relevant statutory and Constitutional law relating to language rights including the Canadian Charter of Rights and Freedoms, s.19(1) and Part XVII of the Criminal Code regarding language rights in courts under federal jurisdiction and in criminal proceedings. The lawyer should also be aware that provincial or territorial legislation may provide additional language rights, including in relation to aboriginal languages.
  3. When a lawyer considers whether to provide the required services in the official language chosen by the client, the lawyer should carefully consider whether it is possible to render those services in a competent manner as required by rule 3.1-2 and related Commentary.

When the Client is an Organization

3.2-3 Although a lawyer may receive instructions from an officer, employee, agent or representative, when a lawyer is employed or retained by an organization, including a corporation, the lawyer must act for the organization in exercising his or her duties and in providing professional services.


Commentary

  1. A lawyer acting for an organization should keep in mind that the organization, as such, is the client and that a corporate client has a legal personality distinct from its shareholders, officers, directors and employees. While the organization or corporation acts and gives instructions through its officers, directors, employees, members, agents or representatives, the lawyer should ensure that it is the interests of the organization that are served and protected. Further, given that an organization depends on persons to give instructions, the lawyer should ensure that the person giving instructions for the organization is acting within that person’s actual or ostensible authority.
  2. In addition to acting for the organization, a lawyer may also accept a joint retainer and act for a person associated with the organization. For example, a lawyer may advise an officer of an organization about liability insurance. In such cases the lawyer acting for an organization should be alert to the prospects of conflicts of interests and should comply with the rules about the avoidance of conflicts of interests (section 3.4).

Encouraging Compromise or Settlement

3.2-4 A lawyer must advise and encourage a client to compromise or settle a dispute whenever it is possible to do so on a reasonable basis and must discourage the client from commencing or continuing useless legal proceedings.


Commentary

  1. A lawyer should consider the use of alternative dispute resolution (ADR) when appropriate, inform the client of ADR options and, if so instructed, take steps to pursue those options.

Threatening Criminal or Regulatory Proceedings

3.2-5 A lawyer must not, in an attempt to gain a benefit for a client, threaten, or advise a client to threaten:

  • to initiate or proceed with a criminal or quasi-criminal charge; or
  • to make a complaint to a regulatory authority.

Commentary

  1. It is an abuse of the court or regulatory authority’s process to threaten to make or advance a complaint in order to secure the satisfaction of a private grievance. Even if a client has a legitimate entitlement to be paid monies, threats to take criminal or quasi-criminal action are not appropriate.
  2. It is not improper, however, to notify the appropriate authority of criminal or quasi-criminal activities while also taking steps through the civil system. Nor is it improper for a lawyer to request that another lawyer comply with an undertaking or trust condition or other professional obligation or face being reported to the Society. The impropriety stems from threatening to use, or actually using, criminal or quasi-criminal proceedings to gain a civil advantage.
  3. It is not improper for a lawyer to advise that a proceeding before a regulatory authority will be initiated or maintained if the benefit to be gained is one that the regulatory authority has the jurisdiction to order in the proceedings. The impropriety stems from threatening to make a complaint for the purpose of obtaining a collateral benefit.

Amended February 26, 2016

Inducement for Withdrawal of Criminal or Regulatory Proceedings

3.2-6 A lawyer must not:

  • give or offer to give, or advise an accused or any other person to give or offer to give, any valuable consideration to another person in exchange for influencing the Crown or a regulatory authority’s conduct of a criminal or quasi-criminal charge or a complaint, unless the lawyer obtains the consent of the Crown or the regulatory authority to enter into such discussions;
  • accept or offer to accept, or advise a person to accept or offer to accept, any valuable consideration in exchange for influencing the Crown or a regulatory authority’s conduct of a criminal or quasi-criminal charge or a complaint, unless the lawyer obtains the consent of the Crown or regulatory authority to enter such discussions; or
  • wrongfully influence any person to prevent the Crown or regulatory authority from proceeding with charges or a complaint or to cause the Crown or regulatory authority to withdraw the complaint or stay charges in a criminal or quasi-criminal proceeding.

Commentary

  1. “Regulatory authority” includes professional and other regulatory bodies.
  2. A lawyer for an accused or potential accused must never influence a complainant or potential complainant not to communicate or cooperate with the Crown. However, this rule does not prevent a lawyer for an accused or potential accused from communicating with a complainant or potential complainant to obtain factual information, arrange for restitution or an apology from an accused, or defend or settle any civil matters between the accused and the complainant. When a proposed resolution involves valuable consideration being exchanged in return for influencing the Crown or regulatory authority not to proceed with a charge or to seek a reduced sentence or penalty, the lawyer for the accused must obtain the consent of the Crown or regulatory authority prior to discussing such proposal with the complainant or potential complainant. Similarly, lawyers advising a complainant or potential complainant with respect to any such negotiations can do so only with the consent of the Crown or regulatory authority. In such circumstances, a lawyer must find a balance between the duty of loyalty to their client and their duty to the administration of justice.
  3. A lawyer cannot provide an assurance that the settlement of a related civil matter will result in the withdrawal of criminal or quasi-criminal charges, absent the consent of the Crown or regulatory authority.
  4. When the complainant or potential complainant is unrepresented, the lawyer should have regard to the rules respecting unrepresented persons and make it clear that the lawyer is acting exclusively in the interests of the accused. If the complainant or potential complainant is vulnerable, the lawyer should take care not to take unfair or improper advantage of the circumstances. When communicating with an unrepresented complainant or potential complainant, it is prudent to have a witness present.

Dishonesty, Fraud by Client or others

3.2-7 A lawyer must never:

  • knowingly assist in or encourage any dishonesty, fraud, crime, or illegal conduct;
  • do or omit to do anything that the lawyer ought to know assists in or encourages any dishonest, fraud, crime, or illegal conduct by a client or others; or
  • instruct a client or others on how to violate the law.

Amended May 26, 2017


Commentary

  1. A lawyer should be on guard against becoming the tool or dupe of an unscrupulous client, or of others, whether or not associated with the unscrupulous client.
  2. A lawyer should be alert to and avoid unwittingly becoming involved with a client or others engaged in criminal activities such as mortgage fraud or money laundering. Vigilance is required because the means for these, and other criminal activities, may be transactions for which lawyers commonly provide services such as: establishing, purchasing or selling business entities; arranging financing for the purchase or sale or operation of business entities; arranging financing for the purchase or sale of business assets; and purchasing and selling real estate.
  3. If a lawyer has suspicions or doubts about whether he or she might be assisting a client or others in dishonesty, fraud, crime or illegal conduct, the lawyer should make reasonable inquiries to obtain information about the client or others and, in the case of a client, about the subject matter and objectives of the retainer. These should include verifying who are the legal or beneficial owners of property and business entities, verifying who has the control of business entities, and clarifying the nature and purpose of a complex or unusual transaction where the purpose is not clear. The lawyer should make a record of the results of these inquiries.
  4. A bona fide test case is not necessarily precluded by this rule and, so long as no injury to a person or violence is involved, a lawyer may properly advise and represent a client who, in good faith and on reasonable grounds, desires to challenge or test a law and the test can most effectively be made by means of a technical breach giving rise to a test case. In all situations, the lawyer should ensure that the client appreciates the consequences of bringing a test case.

Dishonesty, Fraud when Client an Organization

3.2-8 A lawyer who is employed or retained by an organization to act in a matter in which the lawyer knows that the organization has acted, is acting or intends to act dishonestly, fraudulently, criminally or illegally, must do the following, in addition to his or her obligations under rule 3.2-7:

  • advise the person from whom the lawyer takes instructions and the chief legal officer, or both the chief legal officer and the chief executive officer, that the proposed conduct is, was or would be dishonest, fraudulent, criminal, or illegal and should be stopped;
  • if necessary because the person from whom the lawyer takes instructions, the chief legal officer or the chief executive officer refuses to cause the proposed conduct to be stopped, advise progressively the next highest persons or groups, including ultimately, the board of directors, the board of trustees, or the appropriate committee of the board, that the proposed conduct was, is or would be dishonest, fraudulent, criminal, or illegal and should be stopped; and
  • if the organization, despite the lawyer’s advice, continues with or intends to pursue the proposed wrongful conduct, withdraw from acting in the matter in accordance with section 3.7.

Commentary

  1. The past, present, or proposed misconduct of an organization may have harmful and serious consequences, not only for the organization and its constituency but also for the public who rely on organizations to provide a variety of goods and services. In particular, the misconduct of publicly traded commercial and financial corporations may have serious consequences for the public at large. This rule addresses some of the professional responsibilities of a lawyer acting for an organization, including a corporation, when he or she learns that the organization has acted, is acting, or proposes to act in a way that is dishonest, fraudulent, criminal or illegal. In addition to these rules, the lawyer may need to consider, for example, the rules and commentary about confidentiality (section 3.3).
  2. This rule speaks of conduct that is dishonest, fraudulent, criminal or illegal. Such conduct includes acts of omission. Indeed, often it is the omissions of an organization, such as failing to make required disclosure or to correct inaccurate disclosures that constitute the wrongful conduct to which these rules relate. Conduct likely to result in substantial harm to the organization, as opposed to genuinely trivial misconduct by an organization, invokes these rules.
  3. In considering his or her responsibilities under this section, a lawyer should consider whether it is feasible and appropriate to give any advice in writing.
  4. A lawyer acting for an organization who learns that the organization has acted, is acting, or intends to act in a wrongful manner, may advise the chief executive officer and must advise the chief legal officer of the misconduct. If the wrongful conduct is not abandoned or stopped, the lawyer must report the matter “up the ladder” of responsibility within the organization until the matter is dealt with appropriately. If the organization, despite the lawyer’s advice, continues with the wrongful conduct, the lawyer must withdraw from acting in the particular matter in accordance with rule 3.7-1. In some but not all cases, withdrawal means resigning from his or her position or relationship with the organization and not simply withdrawing from acting in the particular matter.
  5. This rule recognizes that lawyers as the legal advisers to organizations are in a central position to encourage organizations to comply with the law and to advise that it is in the organization’s and the public’s interest that organizations do not violate the law. Lawyers acting for organizations are often in a position to advise the executive officers of the organization, not only about the technicalities of the law, but also about the public relations and public policy concerns that motivated the government or regulator to enact the law. Moreover, lawyers for organizations, particularly in-house counsel, may guide organizations to act in ways that are legal, ethical, reputable and consistent with the organization’s responsibilities to its constituents and to the public.

Clients with Diminished Capacity

3.2-9 When a client’s ability to make decisions is impaired because of minority or mental disability, or for some other reason, the lawyer must, as far as reasonably possible, maintain a normal lawyer and client relationship.


Commentary

  1. A lawyer and client relationship presupposes that the client has the requisite mental ability to make decisions about his or her legal affairs and to give the lawyer instructions. A client’s ability to make decisions depends on such factors as age, intelligence, experience and mental and physical health and on the advice, guidance and support of others. A client’s ability to make decisions may change, for better or worse, over time. A client may be mentally capable of making some decisions but not
    others. The key is whether the client has the ability to understand the information relative to the decision that has to be made and is able to appreciate the reasonably foreseeable consequences of the decision or lack of decision. Accordingly, when a client is, or comes to be, under a disability that impairs his or her ability to make decisions, the lawyer will have to assess whether the impairment is minor or whether it prevents the client from giving instructions or entering into binding legal relationships.
  2. A lawyer who believes a person to be incapable of giving instructions should decline to act. However, if a lawyer reasonably believes that the person has no other agent or representative and a failure to act could result in imminent and irreparable harm, the lawyer may take action on behalf of the person lacking capacity only to the extent necessary to protect the person until a legal representative can be appointed. A lawyer undertaking to so act has the same duties under these rules to the person lacking capacity as the lawyer would with any client.
  3. If a client’s incapacity is discovered or arises after the solicitor-client relationship is established, the lawyer may need to take steps to have a lawfully authorized representative, such as a litigation guardian, appointed or to obtain the assistance of the Office of the Public Trustee to protect the interests of the client. Whether that should be done depends on all relevant circumstances, including the importance and urgency of any matter requiring instruction. In any event, the lawyer has an ethical obligation to ensure that the client’s interests are not abandoned. Until the appointment of a legal representative occurs, the lawyer should act to preserve and protect the client’s interests.
  4. In some circumstances when there is a legal representative, the lawyer may disagree with the legal representative’s assessment of what is in the best interests of the client under a disability. So long as there is no lack of good faith or authority, the judgment of the legal representative should prevail. If a lawyer becomes aware of conduct or intended conduct of the legal representative that is clearly in bad faith or outside that person’s authority, and contrary to the best interests of the client with diminished capacity, the lawyer may act to protect those interests. This may require reporting the misconduct to a person or institution such as a family member or the Public Trustee.
  5. When a lawyer takes protective action on behalf of a person or client lacking in capacity, the authority to disclose necessary confidential information may be implied in some circumstances: See Commentary under rule 3.3-1 (Confidentiality) for a discussion of the relevant factors. If the court or other counsel becomes involved, the lawyer should inform them of the nature of the lawyer’s relationship with the person lacking capacity.

3.3 Confidentiality

Confidential Information

3.3-1 A lawyer at all times must hold in strict confidence all information concerning the business and affairs of a client acquired in the course of the professional relationship and must not divulge any such information unless:

  • expressly or impliedly authorized by the client;
  • required by law or a court to do so;
  • required to deliver the information to the Society, or
  • otherwise permitted by this rule.

Commentary

  1. A lawyer cannot render effective professional service to a client unless there is full and unreserved communication between them. At the same time, the client must feel completely secure and entitled to proceed on the basis that, without any express request or stipulation on the client’s part, matters disclosed to or discussed with the lawyer will be held in strict confidence.
  2. This rule must be distinguished from the evidentiary rule of lawyer and client privilege, which is also a constitutionally protected right, concerning oral or documentary communications passing between the client and the lawyer. The ethical rule is wider and applies without regard to the nature or source of the information or the fact that others may share the knowledge.
  3. A lawyer owes the duty of confidentiality to every client without exception and whether or not the client is a continuing or casual client. The duty survives the professional relationship and continues indefinitely after the lawyer has ceased to act for the client, whether or not differences have arisen between them.
  4. A lawyer also owes a duty of confidentiality to anyone seeking advice or assistance on a matter invoking a lawyer’s professional knowledge, although the lawyer may not render an account or agree to represent that person. A solicitor and client relationship is often established without formality. A lawyer should be cautious in accepting confidential information on an informal or preliminary basis, since possession of the information may prevent the lawyer from subsequently acting for another party in the same or a related matter. (See rule 3.4-1 Conflicts.)
  5. Generally, unless the nature of the matter requires such disclosure, a lawyer should not disclose having been:
  • retained by a person about a particular matter; or
  • consulted by a person about a particular matter, whether or not the lawyer-client relationship has been established between them.
  1. A lawyer should take care to avoid disclosure to one client of confidential information concerning or received from another client and should decline employment that might require such disclosure.
  2. Sole practitioners who practise in association with other lawyers in cost-sharing, space-sharing or other arrangements should be mindful of the risk of advertent or inadvertent disclosure of confidential information, even if the lawyers institute systems and procedures that are designed to insulate their respective practices. The issue may be heightened if a lawyer in the association represents a client on the other side of a dispute with the client of another lawyer in the association. Apart from conflict of interest issues such a situation may raise, the risk of such disclosure may depend on the extent to which the lawyers’ practices are integrated, physically and administratively, in the association.
  3. A lawyer should avoid indiscreet conversations and other communications, even with the lawyer’s spouse or family, about a client’s affairs and should shun any gossip about such things even though the client is not named or otherwise identified. Similarly, a lawyer should not repeat any gossip or information about the client’s business or affairs that is overheard or recounted to the lawyer. Apart altogether from ethical considerations or questions of good taste, indiscreet shoptalk among lawyers, if overheard by third parties able to identify the matter being discussed, could result in prejudice to the client. Moreover, the respect of the listener for lawyers and the legal profession will probably be lessened. Although the rule may not apply to facts that are public knowledge, a lawyer should guard against participating in or commenting on speculation concerning clients’ affairs or business.
  4. In some situations, the authority of the client to disclose may be inferred. For example, in court proceedings some disclosure may be necessary in a pleading or other court document. Also, it is implied that a lawyer may, unless the client directs otherwise, disclose the client’s affairs to partners and associates in the law firm and, to the extent necessary, to administrative staff and to others whose services are used by the lawyer. But this implied authority to disclose places the lawyer under a duty to impress upon associates, employees, students and other lawyers engaged under contract with the lawyer or with the firm of the lawyer the importance of non-disclosure (both during their employment and afterwards) and requires the lawyer to take reasonable care to prevent their disclosing or using any information that the lawyer is bound to keep in confidence.
  5. The client’s authority for the lawyer to disclose confidential information to the extent necessary to protect the client’s interest may also be inferred in some situations where the lawyer is taking action on behalf of the person lacking capacity to protect the person until a legal representative can be appointed. In determining whether a lawyer may disclose such information, the lawyer should consider all circumstances, including the reasonableness of the lawyer’s belief the person lacks capacity, the potential harm that may come to the client if no action is taken, and any instructions the client may have given the lawyer when capable of giving instructions about the authority to disclose information. Similar considerations apply to confidential information given to the lawyer by a person who lacks the capacity to become a client but nevertheless requires protection.
  6. A lawyer may have an obligation to disclose information under rules 5.5-2, 5.5-3 and 5.6-3. If client information is involved in those situations, the lawyer should be guided by the provisions of this rule.

Use of Confidential Information

3.3-2 A lawyer must not use or disclose a client’s or former client’s confidential information to the disadvantage of the client or former client, or for the benefit of the lawyer or a third person without the consent of the client or former client.


Commentary

  1. The fiduciary relationship between a lawyer and a client forbids the lawyer or a third person from benefiting from the lawyer’s use of a client’s confidential information. If a lawyer engages in literary works, such as a memoir or autobiography, the lawyer is required to obtain the client’s or former client’s consent before disclosing confidential information.

Future Harm / Public Safety Exception

3.3-3 A lawyer may disclose confidential information, but must not disclose more information than is required, when the lawyer believes on reasonable grounds that there is an imminent risk of death or serious bodily harm, and disclosure is necessary to prevent the death or harm.


Commentary

  1. Confidentiality and loyalty are fundamental to the relationship between a lawyer and a client because legal advice cannot be given and justice cannot be done unless clients have a large measure of freedom to discuss their affairs with their lawyers. However, in some very exceptional situations identified in this rule, disclosure without the client’s permission might be warranted because the lawyer is satisfied that truly serious harm of the types identified is imminent and cannot otherwise be prevented. These situations will be extremely rare.
  2. The Supreme Court of Canada has considered the meaning of the words “serious bodily harm” in certain contexts, which may inform a lawyer in assessing whether disclosure of confidential information is warranted. In Smith v. Jones, [1999] 1 S.C.R. 455 at paragraph 83, the Court observed that serious psychological harm may constitute serious bodily harm if it substantially interferes with the health or well-being of the individual.
  3. In assessing whether disclosure of confidential information is justified to prevent death or serious bodily harm, a lawyer should consider a number of factors, including:
  • the likelihood that the potential injury will occur and its imminence;
  • the apparent absence of any other feasible way to prevent the potential injury; and
  • the circumstances under which the lawyer acquired the information of the client’s intent or prospective course of action.
  1. How and when disclosure should be made under this rule will depend upon the circumstances. A lawyer who believes that disclosure may be warranted should contact the Society for ethical advice. When practicable and permitted, a judicial order may be sought for disclosure.
  2. If confidential information is disclosed under rule 3.3-3, the lawyer should prepare a written note as soon as possible, which should include:
  • the date and time of the communication in which the disclosure is made;
  • the grounds in support of the lawyer’s decision to communicate the information, including the harm intended to be prevented, the identity of the person who prompted communication of the information as well as the identity of the person or group of persons exposed to the harm; and
  • the content of the communication, the method of communication used and the identity of the person to whom the communication was made.

3.3-4 If it is alleged that a lawyer or the lawyer’s associates or employees:

  • have committed a criminal offence involving a client’s affairs;
  • are civilly liable with respect to a matter involving a client’s affairs;
  • have committed acts of professional negligence; or
  • have engaged in acts of professional misconduct or conduct unbecoming a lawyer,

the lawyer may disclose confidential information in order to defend against the allegations, but must not disclose more information than is required.

3.3-5 A lawyer may disclose confidential information in order to establish or collect the lawyer’s fees, but must not disclose more information than is required.

3.3-6 A lawyer may disclose confidential information to another lawyer to secure legal or ethical advice about the lawyer’s proposed conduct.

3.3-7 A lawyer may disclose confidential information to the extent reasonably necessary to detect and resolve conflicts of interest arising from the lawyer’s change of employment or from changes in the composition or ownership of a law firm, but only if the information disclosed does not compromise solicitor-client privilege or otherwise prejudice the client.

Amended May 22, 2015


Commentary

  1. As a matter related to clients’ interests in maintaining a relationship with counsel of choice and protecting client confidences, lawyers in different firms may need to disclose limited information to each other to detect and resolve conflicts of interest, such as when a lawyer is considering an association with another firm, two or more firms are considering a merger, or a lawyer is considering the purchase of a law practice.
  2. In these situations (see Rules 3.4-17 to 3.4-23 on Conflicts From Transfer Between Law Firms), rule 3.3-7 permits lawyers and law firms to disclose limited information. This type of disclosure would only be made once substantive discussions regarding the new relationship have occurred.
  3. This exchange of information between the firms needs to be done in a manner consistent with the transferring lawyer’s and new firm’s obligations to protect client confidentiality and privileged information and avoid any prejudice to the client. It ordinarily would include no more than the names of the persons and entities involved in a matter. Depending on the circumstances, it may include a brief summary of the general issues involved, and information about whether the representation has come to an end.
  4. The disclosure should be made to as few lawyers at the new law firm as possible, ideally to one lawyer of the new firm, such as a designated conflicts lawyer. The information should always be disclosed only to the extent reasonably necessary to detect and resolve conflicts of interest that might arise from the possible new relationship.
  5. As the disclosure is made on the basis that it is solely for the use of checking conflicts where lawyers are transferring between firms and for establishing screens, the disclosure should be coupled with an undertaking by the new law firm to the former law firm that it will:
  • limit access to the disclosed information;
  • not use the information for any purpose other than detecting and resolving conflicts; and
  • return, destroy, or store in a secure and confidential manner the information provided once appropriate confidentiality screens are established.
  1. The client’s consent to disclosure of such information may be specifically addressed in a retainer agreement between the lawyer and client. In some circumstances, however, because of the nature of the retainer, the transferring lawyer and the new law firm may be required to obtain the consent of clients to such disclosure or the disclosure of any further information about the clients. This is especially the case where disclosure would compromise solicitor-client privilege or otherwise prejudice the client (e.g., the fact that a corporate client is seeking advice on a corporate takeover that has not been publicly announced; that a person has consulted a lawyer about the possibility of divorce before the person’s intentions are known to the person’s spouse; or that a person has consulted a lawyer about a criminal investigation that has not led to a public charge).

3.4  Conflicts

Duty to Avoid Conflicts of Interest

3.4-1  A lawyer must not act or continue to act for a client where there is a conflict of interest, except as permitted under this Code.

Amended May 22, 2015


Commentary

  1. Lawyers have an ethical duty to avoid conflicts of interest. Some cases involving conflicts of interest will fall within the scope of the bright line rule as articulated by the Supreme Court of Canada. The bright line rule prohibits a lawyer or law firm from representing one client whose legal interests are directly adverse to the immediate legal interests of another client even if the matters are unrelated unless the clients consent. However, the bright line rule cannot be used to support tactical abuses and will not apply in cases where it is unreasonable for the client to expect that the lawyer or law firm will not act against it in unrelated matters. See also rule 3.4-2 and commentary [6].
  2.  In cases where the bright line rule is inapplicable, the lawyer or law firm will still be prevented from acting if the concurrent representation of clients would create 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. The risk must be more than a mere possibility; there must be a genuine, serious risk to the duty of loyalty or to client representation arising from the retainer.
  3. This rule applies to a lawyer’s representation of a client in all circumstances in which the lawyer acts for, provides advice to or exercises judgment on behalf of a client. Effective representation may be threatened where a lawyer is tempted to prefer other interests over those of his or her own client: the lawyer’s own interests, those of a current client, a former client, or a third party.

The Fiduciary Relationship, the Duty of Loyalty and Conflicting Interests

  1. The rule governing conflicts of interest is founded in the duty of loyalty which is grounded in the law governing fiduciaries. The lawyer-client relationship is based on trust. It is a fiduciary relationship and as such, the lawyer has a duty of loyalty to the client. To maintain public confidence in the integrity of the legal profession and the administration of justice, in which lawyers play a key role, it is essential that lawyers respect the duty of loyalty. Arising from the duty of loyalty are other duties, such as a duty to commit to the client’s cause, the duty of confidentiality, the duty of candour and the duty to avoid conflicting interests.
  2. A client must be assured of the lawyer’s undivided loyalty, free from any material impairment of the lawyer and client relationship. The relationship may be irreparably damaged where the lawyer’s representation of one client is directly adverse to another client’s immediate interests. One client may legitimately fear that the lawyer will not pursue the representation out of deference to the other client.

Other Duties Arising from the Duty of Loyalty

  1. The lawyer’s duty of confidentiality is owed to both current and former clients, with the related duty not to attack the legal work done during a retainer or to undermine the former client’s position on a matter that was central to the retainer.
  2. The lawyer’s duty of commitment to the client’s cause prevents the lawyer from summarily and unexpectedly dropping a client to circumvent conflict of interest rules. The client may legitimately feel betrayed if the lawyer ceases to act for the client to avoid a conflict of interest.
  3. The duty of candour requires a lawyer or law firm to disclose any factors relevant to the lawyer or law firm’s ability to provide effective representation.

Identifying Conflicts

  1. A lawyer should examine whether a conflict of interest exists not only from the outset but throughout the duration of a retainer because new circumstances or information may establish or reveal a conflict of interest. Factors for the lawyer’s consideration in determining whether a conflict of interest exists include:
  • the immediacy of the legal interests;
  • whether the legal interests are directly adverse;
  • whether the issue is substantive or procedural;
  • the temporal relationship between the matters;
  • the significance of the issue to the immediate and long-term interests of the clients involved; and
  • the clients’ reasonable expectations in retaining the lawyer for the particular matter or representation.

Examples of  areas where conflicts of interest may occur

  1. Conflicts of interest can arise in many different circumstances. The following examples are intended to provide illustrations of circumstances that may give rise to conflicts of interest. The examples are not exhaustive.
  • A lawyer acts as an advocate in one matter against a person when the lawyer represents that person on some other matter.
  • A lawyer provides legal advice to a small business on a series of commercial transactions and at the same time provides legal advice to an employee of the business on an employment matter, thereby acting for clients whose legal interests are directly adverse.
  • A lawyer, an associate, a law partner or a family member has a personal financial interest in a client’s affairs or in a matter in which the lawyer is requested to act for a client, such as a partnership interest in some joint business venture with a client. A lawyer owning a small number of shares of a publicly traded corporation would not necessarily have a conflict of interest in acting for the corporation because the holding may have no adverse influence on the lawyer’s judgment or loyalty to the client.
  • A lawyer has a sexual or close personal relationship with a client. Such a relationship may conflict with the lawyer’s duty to provide objective, disinterested professional advice to the client. The relationship may obscure whether certain information was acquired in the course of the lawyer and client relationship and may jeopardize the client’s right to have all information concerning his or her affairs held in strict confidence. The relationship may in some circumstances permit exploitation of the client by his or her lawyer. If the lawyer is a member of a firm and concludes that a conflict exists, the conflict is not imputed to the lawyer’s firm, but would be cured if another lawyer in the firm who is not involved in such a relationship with the client handled the client’s work.
  • A lawyer or his or her law firm acts for a public or private corporation and the lawyer serves as a director of the corporation. These two roles may result in a conflict of interest or other problems because they may affect the lawyer’s independent judgment and fiduciary obligations in either or both roles, obscure legal advice from business and practical advice, jeopardize the protection of lawyer and client privilege, and disqualify the lawyer or the law firm from acting for the organization.
  • Sole practitioners who practise with other lawyers in cost-sharing or other arrangements represent clients on opposite sides of a dispute. The fact or the appearance of such a conflict may depend on the extent to which the lawyers’ practices are integrated, physically and administratively, in the association.

The Role of the Court and Law Societies

  1. These rules set out ethical standards to which all members of the profession must adhere. The courts have a separate supervisory role over court proceedings. In that role, the courts apply fiduciary principles developed by the courts to govern lawyers’ relationships with their clients, to ensure the proper administration of justice. A breach of the rules on conflicts of interest may lead to sanction by a law society even where a court dealing with the case may decline to order disqualification as a remedy.

3.4-2 A lawyer must not represent a client in a matter when there is a conflict of interest unless there is express or implied consent from all affected clients and the lawyer reasonably believes that he or she is able to represent the client without having a material adverse effect upon the representation of or loyalty to the client or another.

  • Express consent must be fully informed and voluntary after disclosure.
  • Consent may be inferred and need not be in writing where all of the following apply:
  • the client is a Government, financial institution, publicly traded or similarly substantial entity, or an entity with in-house counsel;
  • the matters are unrelated;
  • the lawyer has no relevant confidential information from one client that might reasonably affect the other; and
  • the client has commonly consented to lawyers acting for and against it in unrelated matters.

Amended May 22, 2015


Commentary

Disclosure and consent

  1. Disclosure is an essential requirement to obtaining a client’s consent and arises from the duty of candour owed to the client. Where it is not possible to provide the client with adequate disclosure because of the confidentiality of the information of another client, the lawyer must decline to act.
  2. Disclosure means full and fair disclosure of all information relevant to a person’s decision in sufficient time for the person to make a genuine and independent decision, and the taking of reasonable steps to ensure understanding of the matters disclosed. The lawyer therefore should inform the client of the relevant circumstances and the reasonably foreseeable ways that the conflict of interest could adversely affect the client’s interests. This would include the lawyer’s relations to the parties and any interest in or connection with the matter.

    2.A While this rule does not require that a lawyer advise a client to obtain independent legal advice about the conflict of interest, in some cases the lawyer should recommend such advice. This is to ensure that the client’s consent is informed, genuine and uncoerced, especially if the client is vulnerable or not sophisticated.
  1. Following the required disclosure, the client can decide whether to give consent. As important as it is to the client that the lawyer’s judgment and freedom of action on the client’s behalf not be subject to other interests, duties or obligations, in practice this factor may not always be decisive. Instead, it may be only one of several factors that the client will weigh when deciding whether or not to give the consent referred to in the rule. Other factors might include, for example, the availability of another lawyer of comparable expertise and experience, the stage that the matter or proceeding has reached, the extra cost, delay and inconvenience involved in engaging another lawyer, and the latter’s unfamiliarity with the client and the client’s affairs.

Consent in Advance

  1. A lawyer may be able to request that a client consent in advance to conflicts that might arise in the future. As the effectiveness of such consent is generally determined by the extent to which the client reasonably understands the material risks that the consent entails, the more comprehensive the explanation of the types of future representations that might arise and the actual and reasonably foreseeable adverse consequences of those representations, the greater the likelihood that the client will have the requisite understanding. A general, open-ended consent will ordinarily be ineffective because it is not reasonably likely that the client will have understood the material risks involved. If the client is an experienced user of the legal services involved and is reasonably informed regarding the risk that a conflict may arise, such consent is more likely to be effective, particularly if, for example, the client is independently represented by other counsel in giving consent and the consent is limited to future conflicts unrelated to the subject of the representation.
  2. While not a pre-requisite to advance consent, in some circumstances it may be advisable to recommend that the client obtain independent legal advice before deciding whether to provide consent. Advance consent must be recorded, for example in a retainer letter.

Implied consent

  1. In limited circumstances consent may be implied, rather than expressly granted. In some cases it may be unreasonable for a client to claim that it expected that the loyalty of the lawyer or law firm would be undivided and that the lawyer or law firm would refrain from acting against the client in unrelated matters. In considering whether the client’s expectation is reasonable, the nature of the relationship between the lawyer and the client, the terms of the retainer and the matters involved must be considered. Governments, chartered banks and entities that might be considered sophisticated consumers of legal services may accept that lawyers may act against them in unrelated matters where there is no danger of misuse of confidential information. The more sophisticated the client is as a consumer of legal services, the more likely it will be that an inference of consent can be drawn. The mere nature of the client is not, however, a sufficient basis upon which to assume implied consent; the matters must be unrelated, the lawyer must not possess confidential information from one client that could affect the other client, and there must be a reasonable basis upon which to conclude that the client has commonly accepted that lawyers may act against it in such circumstances.

3.4-2A In rules 3.4-2B to 3.4-2D “Short-term summary legal services” means advice or representation to a client under the auspices of a pro bono or not-for-profit legal services provider with the expectation by the lawyer and the client that the lawyer will not provide continuing legal services in the matter.

3.4-2B A lawyer may provide short-term summary legal services without taking steps to determine whether there is a conflict of interest.

3.4-2C Except with consent of the clients as provided in rule 3.4-2, a lawyer must not provide, or must cease providing short-term summary legal services to a client where the lawyer has actual knowledge of or becomes aware that there is a conflict of interest.

3.4-2D A lawyer who provides short-term summary legal services must take reasonable measures to ensure that no disclosure of the client’s confidential information is made to another lawyer in the lawyer’s firm.

Amended January 23, 2015


Commentary

  1. Short-term summary legal service and duty counsel programs are usually offered in circumstances in which it may be difficult to systematically screen for conflicts of interest in a timely way, despite the best efforts and existing practices and procedures of the not-for-profit legal services provider and the lawyers and law firms who provide these services. Performing a full conflicts screening in circumstances in which the short-term summary services described in these rules are being offered can be very challenging given the timelines, volume and logistics of the setting in which the services are provided.
  2. The limited nature of short-term summary legal services significantly reduces the risk of conflicts of interest with other matters being handled by the lawyer’s firm. Accordingly, the lawyer is disqualified from acting for a client receiving short-term summary legal services only if the lawyer has actual knowledge of a conflict of interest between the client receiving short-term summary legal services and an existing client of the lawyer or the lawyer’s firm, or an existing client of the pro bono or not-for-profit legal services provider or between the lawyer and the client receiving short-term summary legal services.
  3. Confidential information obtained by a lawyer providing the services described in Rules 3.4-2A-2D will not be imputed to the lawyers in the lawyer’s firm. As such, these individuals may continue to act for another client adverse in interest to the client who is obtaining or has obtained short-term summary legal services, and may act in future for another client adverse in interest to the client who is obtaining or has obtained short-term summary legal services, whether or not such adverse representation relates to the same matter.
  4. In the provision of short-term summary legal services, the lawyer’s knowledge about possible conflicts of interest is based on the lawyer’s reasonable recollection and information provided by the client in the ordinary course of consulting with the pro bono or not-for-profit legal services provider to receive its services.
  5. When providing short-term summary legal services a lawyer must ensure compliance with Commentary [7B] of rule 3.1-2 respecting the duty of competence.  

Amended February 26, 2016

Dispute

3.4-3 Despite rule 3.4-2 a lawyer must not represent opposing parties in a dispute.

Amended July 20, 2012


Commentary

  1. A lawyer representing a client who is a party in a dispute with another party or parties must competently and diligently develop and argue the position of the client. In a dispute, the parties’ immediate legal interests are clearly adverse. If the lawyer were permitted to act for opposing parties in such circumstances even with consent, the lawyer’s advice, judgment and loyalty to one client would be materially and adversely affected by the same duties to the other client or clients. In short, the lawyer would find it impossible to act without offending these rules.

Concurrent Representation with protection of confidential client information

3.4-4  Where there is no dispute among the clients about the matter that is the subject of the proposed representation, two or more lawyers in a law firm may act for current clients with competing interests and may treat information received from each client as confidential and not disclose it to the other clients, provided that:

  • disclosure of the risks of the lawyers so acting has been made to each client;
  • the lawyer recommends each client receive independent legal advice, including on the risks of concurrent representation;
  • the clients each determine that it is in their best interests that the lawyers so act and consent to the concurrent representation;
  • each client is represented by a different lawyer in the firm;
  • appropriate screening mechanisms are in place to protect confidential information; and
  • all lawyers in the law firm withdraw from the representation of all clients in respect of the matter if a dispute that cannot be resolved develops among the clients.

Amended May 22, 2015


Commentary

  1. This rule provides guidance on concurrent representation, which is permitted in limited circumstances. Concurrent representation is not contrary to the rule prohibiting representation where there is a conflict of interest provided that the clients are fully informed of the risks and understand that if a dispute arises among the clients that cannot be resolved the lawyers may have to withdraw, resulting in potential additional costs.
  2. An example is a law firm acting for a number of sophisticated clients in a matter such as competing bids in a corporate acquisition in which, although the clients’ interests are divergent and may conflict, the clients are not in a dispute. Provided that each client is represented by a different lawyer in the firm and there is no real risk that the firm will not be able to properly represent the legal interests of each client, the firm may represent both even though the subject matter of the retainers is the same. Whether or not a risk of impairment of representation exists is a question of fact.
  3. The basis for the advice described in the rule from both the lawyers involved in the concurrent representation and those giving independent legal advice is whether concurrent representation is in the best interests of the clients. Even where all clients consent, the lawyers should not accept a concurrent retainer if the matter is one in which one of the clients is less sophisticated or more vulnerable than the other.
  4. In cases of concurrent representation lawyers should employ, as applicable, the reasonable screening measures to ensure non-disclosure of confidential information within the firm set out in the rule on conflicts from transfer between law firms.

Amended February 26, 2016

Joint Retainers

3.4-5  Before a lawyer acts in a matter or transaction for more than one client, the lawyer must advise each of the clients that:

  • the lawyer has been asked to act for both or all of them;
  • no information received in connection with the matter from one client can be treated as confidential so far as any of the others are concerned; and
  • if a conflict develops that cannot be resolved, the lawyer cannot continue to act for both or all of them and may have to withdraw completely.

Amended July 20, 2012


Commentary

  1. Although this rule does not require that a lawyer advise clients to obtain independent legal advice before the lawyer may accept a joint retainer, in some cases, the lawyer should recommend such advice to ensure that the clients’ consent to the joint retainer is informed, genuine and uncoerced. This is especially so when one of the clients is less sophisticated or more vulnerable than the other.
  2. A lawyer who receives instructions from spouses or partners to prepare one or more wills for them based on their shared understanding of what is to be in each will should treat the matter as a joint retainer and comply with rule 3.4-5. Further, at the outset of this joint retainer, the lawyer should advise the spouses or partners that, if subsequently only one of them were to communicate new instructions, such as instructions to change or revoke a will:
  • the subsequent communication would be treated as a request for a new retainer and not as part of the joint retainer;
  • in accordance with section 3.3, the lawyer would be obliged to hold the subsequent communication in strict confidence and not disclose it to the other spouse or partner; and
  • the lawyer would have a duty to decline the new retainer, unless:
  • the spouses or partners had annulled their marriage, divorced, permanently ended their conjugal relationship or permanently ended their close personal relationship, as the case may be;
  • the other spouse or partner had died; or
  • the other spouse or partner was informed of the subsequent communication and agreed to the lawyer acting on the new instructions.
  1. After advising the spouses or partners in the manner described above, the lawyer should obtain their consent to act in accordance with rule 3.4-

3.4-6  If a lawyer has a continuing relationship with a client for whom the lawyer acts regularly, before the lawyer accepts joint employment for that client and another client in a matter or transaction, the lawyer must advise the other client of the continuing relationship and recommend that the client obtain independent legal advice about the joint retainer.

Amended July 20, 2012

3.4-7  When a lawyer has advised the clients as provided under rules 3.4-5 and 3.4-6 and the parties are content that the lawyer act, the lawyer must obtain their consent.

Amended July 20, 2012


Commentary

  1. Consent in writing, or a record of the consent in a separate  written communication to each client is required. Even if all the parties concerned consent, a lawyer should avoid acting for more than one client when it is likely that a contentious  issue will arise  between them  or their interests, rights or obligations will diverge as the matter progresses.

3.4-8    Except as provided by rule 3.4-9, if a contentious issue arises between clients who have consented to a joint retainer, the lawyer must not advise them on the contentious issue and must

  • refer the clients to other lawyers; or
  • advise the clients of their option to settle the contentious issue by direct negotiation in which the lawyer does not participate provided:
  • no legal advice is required; and
  • the clients are sophisticated.

Amended July 20, 2012

3.4-8A
If the contentious issues referred to in rule 3.4-8 are not resolved, the lawyer must withdraw from the joint representation.

Amended July 20, 2012


Commentary

  1. This rule does not prevent a lawyer from arbitrating or settling, or attempting to arbitrate or settle, a dispute between two or more clients or former clients who are not under any legal disability and who wish to submit the dispute to the lawyer.
  2. If, after the clients have consented to a joint retainer, an issue contentious between them or some of them arises, the lawyer is not necessarily precluded from advising them on non- contentious matters.

3.4-9   Subject to this rule, if clients consent to a joint retainer and also agree that, if a contentious issue arises, the lawyer may continue to advise one of them, the lawyer may advise that client about the contentious matter and must refer the other or others to another lawyer.

Amended July 20, 2012


Commentary

  1. This rule does not relieve the lawyer of the obligation, when the contentious issue arises, to obtain the consent of the clients when there is or is likely to be a conflict of interest, or if the representation on the contentious issue requires the lawyer to act against one of the clients.
  2. When entering into a joint retainer, the lawyer should stipulate that, if a contentious issue develops, the lawyer will be compelled to cease acting altogether unless, at the time the contentious issue develops, all parties consent to the lawyer’s continuing to represent one of them. Consent given before the fact may be ineffective since the party granting the consent will not at that time be in possession of all relevant information.

Acting Against Former Clients

3.4-10  Unless the former client consents, a lawyer must not act against a former client in:

  • the same matter,
  • any related matter, or
  • any other matter if the lawyer has relevant confidential information arising from the representation of the former client that may prejudice that client.

Amended May 22, 2015


Commentary

  1. This rule guards against the misuse of confidential information from a previous retainer and ensures that a lawyer does not attack the legal work that was central to a previous retainer. It is not improper for a lawyer to act against a former client in a fresh and independent matter wholly unrelated to any work the lawyer has previously done for that client if previously obtained confidential information is irrelevant to that matter.

3.4-11  When a lawyer has acted for a former client and obtained confidential information relevant to a new matter, another lawyer (“the other lawyer”) in the lawyer’s firm may act in the new matter against the former client if:

  • the former client consents to the other lawyer acting; or
  • the law firm has:
  • taken reasonable measures to ensure that there will be no disclosure of the former client’s confidential information by the lawyer to any other lawyer, any other member or employee of the law firm, or any other person whose services the lawyer or the law firm has retained in the new matter; and
  • advised the lawyer’s former client, if requested by the client, of the measures taken.

Amended May 22, 2015


Commentary

  1. The Commentary to rules 3.4-17 to 3.4-23 regarding conflicts from transfer between law firms provide valuable guidance for the protection of confidential information in the rare cases in which it is appropriate for another lawyer in the lawyer’s firm to act against the former client.

Acting for Borrower and Lender

3.4-12  Subject to rule 3.4-14, a lawyer or two or more lawyers practising in partnership or association must not act for or otherwise represent both lender and borrower in a mortgage or loan transaction.

3.4-13  In rules 3.4-14 to 3.4-16 “lending client” means a client that is a bank, trust company, insurance company, credit union or finance company that lends money in the ordinary course of its business.

3.4-14  Provided there is compliance with this rule, and in particular rules (7) to (11), a lawyer may act for or otherwise represent both lender and borrower in a mortgage or loan transaction in any of the following situations:

  • the lender is a lending client;
  • the lender is selling real property to the borrower and the mortgage represents part of the purchase price;
  • the lawyer practises in a remote location where there are no other lawyers that either party could conveniently retain for the mortgage or loan transaction; or
  • the lender and borrower are not at “arm’s length” as defined in the Income Tax Act (Canada).

3.4-15  When a lawyer acts for both the borrower and the lender in a mortgage or loan transaction, the lawyer must disclose to the borrower and the lender, in writing, before the advance or release of the mortgage or loan funds, all material information that is relevant to the transaction.


Commentary

  1. What is material is to be determined objectively. Material information would be facts that would be perceived objectively as relevant by any reasonable lender or borrower. An example is a price escalation or “flip”, where a property is re-transferred or re-sold on the same day or within a short time period for a significantly higher price. The duty to disclose arises even if the lender or the borrower does not ask for the specific information.

3.4-16  If a lawyer is jointly retained by a client and a lending client in respect of a mortgage or loan from the lending client to the other client, including any guarantee of that mortgage or loan, the lending client’s consent is deemed to exist upon the lawyer’s receipt of written instructions from the lending client to act and the lawyer is not required to:

  • provide the advice described in rule 3.4-5 to the lending client before accepting the retainer;
  • provide the advice described in rule 3.4-6; or
  • obtain the consent of the lending client as required by rule 3.4-7, including confirming the lending client’s consent in writing, unless the lending client requires that its consent be reduced to writing.

Amended January 20, 2012


Commentary

  1. Rules 3.4-15 and 3.4-16 are intended to simplify the advice and consent process between a lawyer and institutional lender clients. Such clients are generally sophisticated. Their acknowledgement of the terms of and consent to the joint retainer is usually confirmed in the documentation of the transaction (e.g., mortgage loan instructions) and the consent is generally acknowledged by such clients when the lawyer is requested to act.
  2. Rule 3.4-16 applies to all loans when a lawyer is acting jointly for both the lending client and another client regardless of the purpose of the loan, including, without restriction, mortgage loans, business loans and personal loans. It also applies where there is a guarantee of such a loan.

Conflicts from Transfer Between Law Firms

Application of Rule

3.4-17  In rules 3.4-17 to 3.4-23 “matter” means a case, a transaction , or other client representation, but within such representation does not include offering general “know-how” and, in the case of a government lawyer, providing policy advice unless the advice relates to a particular client representation.

Amended May 22, 2015

3.4-18  Rule 3.4-17 to 3.4-23 apply when a lawyer transfers from one law firm (“former law firm”) to another (“new law firm”), and either the transferring lawyer or the new law firm is aware at the time of the transfer or later discovers:

  • that it is reasonable to believe that the transferring lawyer has confidential information relevant to the new law firm’s matter for its client; or 
  • that
  • the new law firm represents a client in a matter that is the same as or related to a matter in which the former law firm represents its client (“former client”);
  • the interests of those clients in that matter conflict; and
  • the transferring lawyer actually possesses relevant information respecting that matter.

Amended May 22, 2015


Commentary

  1. The purpose of the rule is to deal with actual knowledge. Imputed knowledge does not give rise to disqualification. As stated by the Supreme Court of Canada in Macdonald Estate v. Martin, [1990] 3 SCR 1235, with respect to the partners or associates of a lawyer who has relevant confidential information, the concept of imputed knowledge is unrealistic in the era of the mega-firm. Notwithstanding the foregoing, the inference to be drawn is that lawyers working together in the same firm will share confidences on the matters on which they are working, such that actual knowledge may be presumed. That presumption can be rebutted by clear and convincing evidence that shows that all reasonable measures, as discussed in rule 3.4-20, have been taken to ensure that no disclosure will occur by the transferring lawyer to the member or members of the firm who are engaged against a former client.
  2. The duties imposed by this rule concerning confidential information should be distinguished from the general ethical duty to hold in strict confidence all information concerning the business and affairs of the client acquired in the course of the professional relationship, which duty applies without regard to the nature or source of the information or to the fact that others may share the knowledge.
  3. Law firms with multiple offices — This rule treats as one “law firm” such entities as the various legal services units of a government, a corporation with separate regional legal departments and an interjurisdictional law firm.

3.4-19  Rules 3.4-20 to 3.4-22 do not apply to a lawyer employed by the federal, a provincial or a territorial government who, after transferring from one department, ministry or agency to another, continues to be employed by that government.

Amended May 22, 2015


Commentary

  1. Government employees and in-house counsel — The definition of “law firm” includes one or more lawyers practising in a government, a Crown corporation, any other public body or a corporation. Thus, the rule applies to lawyers transferring to or from government service and into or out of an in-house counsel position, but does not extend to purely internal transfers in which, after transfer, the employer remains the same.

Law Firm Disqualification

3.4-20  If the transferring lawyer actually possesses relevant confidential information 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:

  • the former client consents to the new law firm’s continued representation of its client; or
  • the new law firm has:
  • taken reasonable measures to ensure that there will be no disclosure of the former client’s confidential information by the transferring lawyer to any member of the new law firm; and
  • advised the lawyer’s former client, if requested by the client, of the measures taken.

Amended May 22, 2015


Commentary

  1. It is not possible to offer a set of “reasonable measures” that will be appropriate or adequate in every case. Instead, the new law firm that seeks to implement reasonable measures must exercise professional judgment in determining what steps must be taken “to ensure that no disclosure will occur to any member of the new law firm of the former client’s confidential information.”  Such measures may include timely and properly constructed confidentiality screens.
  2. For example, the various legal services units of a government, a corporation with separate regional legal departments, an interjurisdictional law firm, or a legal aid program may be able to demonstrate that, because of its institutional structure, reporting relationships, function, nature  of work, and geography, relatively fewer “measures” are necessary to ensure the non-disclosure of client confidences. If it can be shown that, because of factors such as the above, lawyers in separate units, offices or departments do not “work together” with other lawyers in other units, offices or departments, this will be taken into account in the determination of what screening measures are “reasonable.”
  3. The guidelines that follow are intended as a checklist of relevant factors to be considered. Adoption of only some of the guidelines may be adequate in some cases, while adoption of them all may not be sufficient in others.

Guidelines: How to Screen/Measures to be taken

  1. The screened lawyer should have no involvement in the new law firm’s representation of its client in the matter.
  1. 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.
  2. No member of the new law firm should discuss the current matter or the previous representation with the screened lawyer.
  3. The firm should take steps to preclude the screened lawyer from having access to any part of the file.
  4. The new law firm should document the measures taken to screen the transferring lawyer, the time when these measures were put in place (the sooner the better), and should advise all affected lawyers and support staff of the measures taken.
  5. These Guidelines apply with necessary modifications to situations in which non-lawyer staff leave one law firm to work for another and a determination is made, before hiring the individual, on whether any conflicts of interest will be created and whether the potential new hire actually possesses relevant confidential information.

How to Determine If a Conflict Exists Before Hiring a Potential Transferee

  1. When a law firm (“new law firm”) considers hiring a lawyer, or an articled law student (“transferring lawyer”) from another law firm (“former law firm”), the transferring lawyer and the new law firm need to determine, before the transfer, whether any conflicts of interest will be created. Conflicts can arise with respect to clients of the law firm that the transferring lawyer is leaving and with respect to clients of a firm in which the transferring lawyer worked at some earlier time.
  2. After completing the interview process and before hiring the transferring lawyer, the new law firm should determine whether any conflicts exist. In determining whether the transferring lawyer actually possesses relevant confidential information, both the transferring lawyer and the new law firm must be very careful, during any interview of a potential transferring lawyer, or other recruitment process, to ensure that they do not disclose client confidences. See Rule 3.3-7 which provides that a lawyer may disclose confidential information to the extent the lawyer reasonably believes necessary to detect and resolve conflicts of interest where lawyers transfer between firms.
  3. A lawyer’s duty to the lawyer’s firm may also govern a lawyer’s conduct when exploring an association with another firm and is beyond the scope of these Rules.

Transferring Lawyer Disqualification

3.4-21  Unless the former client consents, a transferring lawyer referred to in rule 3.4-20 or 3.4-22 must not:

  • participate in any manner in the new law firm’s representation of its client in the matter; or
  • disclose any confidential information respecting the former client except as permitted by rule 3.3-7.

Amended May 22, 2015

3.4-22  Unless the former client consents, members of the new law firm must not discuss the new law firm’s representation of its client or the former law firm’s representation of the former client in that matter with a transferring lawyer referred to in rule 3.4-20 except as permitted by rule 3.3-7.

Amended May 22, 2015

Lawyer Due Diligence for non-lawyer staff

3.4-23  A lawyer or law firm must exercise due diligence to ensure that each lawyer and employee of the law firm and each other person whose services the lawyer or the law firm has retained:

  • complies with rules 3.4-17 to 3.4-23; and
  • does not disclose confidential information:
  • of clients of the firm; or
  • any other law firm in which the person has worked.

Amended May 22, 2015


Commentary