Ethical walls and conflicts of interest

When I meet with clients for the first time, I tell them about confidentiality. The moment the client opens his mouth, I explain, I lose the right to act for his adversaries. And most likely, that moment occurs even earlier: when the client walks through the door of my office or even schedules an appointment with me. Sometimes, I tell about an episode of The Sopranos where the mob boss saw every good divorce lawyer in town to conflict them out from representing his wife. This confidentiality burden is a good reason why lawyers charge for initial consultations (criminal or personal injury lawyers don’t because they usually never act for the Crown or insurance companies).

A recent case of a former unmarried couple’s battle in family court over their child is a good example of the importance of confidentiality (M.S.K. v. T.L.T., 2011 ONSC 5478 (CanLII)). It’s been a long fight with many motions and court orders since the couple’s separation in 2000. But last Tuesday, on September 20, 2011, Justice Wilson of the Superior Court issued her decision on an issue of confidentiality: she ordered that Lorne Wolfson and his firm be removed as the male party’s lawyer because Wolfson’s clerk worked for the female party’s lawyer before.

The reasons for Justice Wilson’s decision explain the test for conflicting a lawyer out of a case:

1) a previous relationship with the lawyer who is allegedly in a conflict of interest
2) the relationship must be sufficiently related to this case
3) the lawyer fails to prove not receiving any relevant confidential information in the prior case

The lawyer or his firm will be in a conflict of interest even if the relationship above was with the lawyer’s employee.

The purpose of this test is to ensure the public’s confidence in the justice system and in lawyers. The competing factor that the court must consider is the harm that losing a lawyer causes a litigant.

If branches (1) and (2) of the test above are true, the court will presume transfer of confidential information. The lawyer can still prevent the court from conflicting him out if he can prove there was no such transfer. But the lawyer’s burden of proof is heavy. A case called Marinangeli v. Marinangeli shows the weight of this burden: lawyer 1 who used to work for party A joined a firm that acted for party B. The firm erected an “ethical wall” around lawyer 1, and he swore in an affidavit that he didn’t discuss A’s file with anyone at the firm and didn’t even remember the file’s specific details. But lawyer 2 at the firm who acted for B failed to swear his own affidavit. The court found that the burden of the third step in the conflict test was on lawyer 2, and he failed to discharge it.

Justice Wilson found that Wolfson’s clerk had a previous relationship with the female party because the clerk used to work for the female party’s previous lawyer when he represented the woman in the same separation battle. The judge found that the clerk’s past relationship with the female litigant was sufficiently related to the current case. At that point, the judge presumed that the clerk was privy to the woman’s confidential information. Like in Marinangeli, the clerk filed her affidavit, but in contrast to Marinangeli, no ethical wall was erected around her. And Wolfson didn’t file his own affidavit. Not surprisingly, Justice Wilson found that Wolfson failed to discharge the burden of the third step of the test. Since Wolfson’s client didn’t give any evidence of harm he would suffer if the court removed Wolfson, the appearance of the justice system’s integrity sealed the fate of this motion, and Justice Wilson ordered that the law firm representing the male party be removed as his lawyers of record.

Pulat Yunusov is a Toronto litigation lawyer.

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