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Chapter 6 out of 14 chapters in the annotated Professional Conduct Handbook



General principles

1. As a general principle, a lawyer has a duty to give undivided loyalty to every client.

[amended 07/01]

2. A lawyer may act for clients adverse in interest in circumstances permitted in this chapter.

[amended 07/01]

3. A lawyer may, with informed client consent, represent clients in circumstances that might, in the future, give rise to divided loyalties.

[amended 07/01]

Annotations - Rules 1 and 2
Annotations - Rule 3

Acting for two or more clients

4. A lawyer may jointly represent two or more clients if, at the commencement of the retainer, the lawyer:

(a) explains to each client the principle of undivided loyalty,

(b) advises each client that no information received from one of them as a part of the joint representation can be treated as confidential as between them,

(c) receives from all clients the fully informed consent to one of the following courses of action to be followed in the event the lawyer receives from one client, in the lawyer's separate representation of that client, information relevant to the joint representation:

(i) the information must not be disclosed to the other jointly represented clients, and the lawyer must withdraw from the joint representation;

(ii) the information must be disclosed to all other jointly represented clients, and the lawyer may continue to act for the clients jointly, and

(d) secures the informed consent of each client (with independent legal advice, if necessary) as to the course of action that will be followed if a conflict arises between them.

[amended 01/95]

5. If a lawyer jointly represents two or more clients, and a conflict arises between any of them, the lawyer must cease representing all the clients, unless all of the clients:

(a) consented, under paragraph 4(d), to the lawyer continuing to represent one of them or a group of clients that have an identity of interests, or

(b) give informed consent to the lawyer assisting all of them to resolve the conflict.

[amended 01/95]

6. A lawyer who ceased joint representation under Rule 5 or who continued to represent one or more clients under paragraph 5(a) may, with the informed consent of all the clients, resume representation of all of them after the conflict has been resolved.

[amended 01/95]

Appendix 6 to this Handbook sets out two precedent letters that lawyers may use as the basis for compliance with Rules 4 to 6.

[added 04/00]


Space-sharing arrangements

6.1 In Rules 6.1 to 6.3 and 7.1, "sharing space" means sharing office space with one or more other lawyers, but not practising or being held out to be practising in partnership or association with the other lawyer or lawyers.1

[added 05/96]

6.2 Unless all lawyers sharing space together agree that they will not act for clients adverse in interest to the client of any of the others,2 each lawyer who is sharing space must disclose in writing to all of the lawyer's clients:

(a) that an arrangement for sharing space exists,

(b) the identity of the lawyers who make up the firm acting for the client, and

(c) that lawyers sharing space with the firm are free to act for other clients who are adverse in interest to the client.3

[added 05/96]

Acting against a current client

6.3 A lawyer must not represent a client for the purpose of acting against the interests of another client of the lawyer unless:

(a) both clients are informed that the lawyer proposes to act for both clients and both consent, and

(b) the matters are substantially unrelated and the lawyer does not possess confidential information arising from the representation of one client that might reasonably affect the other representation.

[added 07/01]

6.4 For the purposes of Rule 6.3, the consent of a client to the lawyer acting for another client adverse in interest may be inferred in the absence of contrary instructions if, in the reasonable belief of the lawyer, the client would consent in the matter in question because the client has

(a) previously consented to the lawyer, or another lawyer, acting for another client adverse in interest, 

(b) commonly permitted a lawyer to act against the client while retaining the same lawyer in other matters to act on the client's behalf, or

(c) consented, generally, to the lawyer acting for another client adverse in interest.

[added 07/01]

Acting against a former client

7. Subject to Rule 7.4, a lawyer must not represent a client for the purpose of acting against the interests of a former client of the lawyer unless:

(a) the former client is informed that the lawyer proposes to act for a client adverse in interest to the former client and the former client consents to the new representation, or

(b) the new representation is substantially unrelated to the lawyer's representation of the former client, and the lawyer does not possess confidential information arising from the representation of the former client that might reasonably affect the new representation.

[amended 02/95; 07/01]


Limited representation

7.01 In Rules 7.01 to 7.04,4 “limited legal services” means advice or representation of a summary nature provided by a lawyer to a client under the auspices of a not-for-profit organization with the expectation by the lawyer and the client that the lawyer will not provide continuing representation in the matter.

[added 01/09]

7.02 A lawyer must not provide limited legal services if the lawyer is aware of a conflict of interest and must cease providing limited legal services if at any time the lawyer becomes aware of a conflict of interest.

[added 01/09]

7.03 A lawyer may provide limited legal services notwithstanding that another lawyer has provided limited legal services under the auspices of the same not-for-profit organization to a client adverse in interest to the lawyer’s client, provided no confidential information about a client is available to another client from the not-for-profit organization.

[added 01/09]

7.04 If a lawyer keeps information obtained as a result of providing limited legal services confidential from the lawyer’s partners and associates, the information is not imputed to the partners or associates, and a partner or associate of the lawyer may

(a) continue to act for another client adverse in interest to the client who is obtaining or has obtained limited legal services, and

(b) act in future for another client adverse in interest to the client who is obtaining or has obtained limited legal services.

[added 01/09]

Conflicts arising as a result of transfer between law firms

7.1 In Rules 7.1 to 7.9 and Appendix 5:

"client" includes anyone to whom a lawyer owes a duty of confidentiality, whether or not a solicitor-client relationship exists between them;

"confidential information" means information not generally known to the public that is obtained from a client;

"law firm" includes one or more lawyers practising:

(a) in a sole proprietorship,

(b) in a partnership,

(c) in an arrangement for sharing space,5

(d) as a law corporation,

(e) in a government, a Crown corporation or any other public body,6

(f) in a corporation or other body,7and

(g) in a multi-disciplinary practice (MDP);7.1

"lawyer" means a member of the Society, and includes an articled student registered in the Law Society Admission Program;

"matter" means a case or client file, but does not include general "know-how" and, in the case of a government lawyer, does not include policy advice unless the advice relates to a particular case.

[added 02/1995; amended 05/1996; amended 12/2009, effective 07/2010]


Application of Rules8

7.2 Rules 7.1 to 7.9 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:

(a) 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"),

(b) the interests of those clients in that matter conflict, and

(c) the transferring lawyer actually possesses relevant information respecting that matter.

[added 02/95]

7.3 Rules 7.4 to 7.7 do not apply to a lawyer employed by the federal or a provincial or territorial attorney general or department of justice who continues to be employed by that attorney general or department of justice after transferring from one department, ministry or agency to another.

[added 02/95]


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 can establish, in accordance with Rule 7.8, when called upon to do so by a party adverse in interest, that:

(i) it is reasonable that its representation of its client in the matter continue, having regard to all relevant circumstances, including:

(A) the adequacy of the measures taken under subparagraph (ii),

(B) the extent of prejudice to the affected clients, and,

(C) the good faith of the former client and the client of the new law firm, and

(ii) it 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.9

[added 02/95; amended 02/09]


Continued representation not to involve transferring lawyer

7.5 If the transferring lawyer actually possesses information relevant to a matter referred to in paragraph 7.2(a) respecting the former client, but that information is not confidential information that may prejudice the former client if disclosed to a member of the new law firm, the new law firm must notify its client of the relevant circumstances and its intended action under Rules 7.1 to 7.9.

[added 02/95; heading and rule amended 02/09]

7.6 Unless the former client consents, a transferring lawyer to whom Rule 7.4 or 7.5 applies must not:

(a) participate in any manner in the new law firm's representation of its client in that matter, or

(b) disclose any confidential information respecting the former client.

[added 02/95]

7.7 Unless the former client consents, a member 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 to whom Rule 7.4 or 7.5 applies.

[added 02/95]


Determination of compliance

7.8 Anyone who has an interest in, or who represents a party in, a matter referred to in Rules 7.1 to 7.9 may apply to a court of competent jurisdiction for a determination of any aspect of those Rules, or seek the opinion of the Society on the application of those Rules.

[added 02/95]


Due diligence

7.9 A lawyer must exercise due diligence in ensuring that each member and employee of the lawyer's law firm, and each other person whose services the lawyer has retained:

(a) complies with Rules 7.1 to 7.9, and

(b) does not disclose:

(i) confidences of clients of the firm, and

(ii) confidences of clients of another law firm in which the person has worked.

[added 02/95]


Finders' fees

8. A lawyer who, in exchange for making an introduction between a borrower and a lender, receives any payment from one of them, shall not act for the other of them in any resulting transaction between them, unless the lawyer:

(a) makes full disclosure to the client, and

(b) pays the fee over to the client or credits the same against the lawyer's own account to the client.

The principle here involved is that the lawyer should not, by receiving or bargaining for compensation from any source except the client, be put in a position which might interfere with the lawyer's undivided loyalty to the client.

These principles apply to fees received from mutual fund corporations and other financial institutions for procuring investment in those institutions.

Acting as a family law mediator

9. A lawyer who acts as a family law mediator shall comply with Appendix 2 to this Handbook and, to the extent they are not inconsistent with Appendix 2, the Rules in this Chapter.

Real property conveyancing transactions

10. A lawyer who agrees to act in a real property conveyancing transaction for two or more parties with different interests shall comply with this Chapter and with Appendix 3 to this Handbook.

*    *    *


1. Different rules apply when lawyers are held out as practising in partnership or association. See Chapter 13, Rule 6.

[added 05/96]

2. Like other lawyers, those who share space must take all reasonable measures to ensure client confidentiality. Lawyers who do not wish to act for clients adverse in interest to clients of lawyers with whom they share space should establish an adequate conflicts check system.

In order both to ensure confidentiality and to avoid conflicts, a lawyer must have the consent of each client before disclosing any information about the client for the purpose of conflicts checks. Consent may be implied in some cases but, if there is any doubt, the best course is to obtain express consent.

[added 05/96]

3. While disclosure is required of all lawyers sharing space who reserve the right to act for clients adverse in interest, disclosure is recommended for all lawyers sharing space, including those who agree not to act for clients adverse in interest to the clients of the lawyers with whom they share space.

[added 05/96]

4. These Rules contemplate that, in some instances when a lawyer provides limited legal services, it may be impractical for the lawyer to perform a conflicts check before providing legal services to a client.

[added 01/09]

5.This recognizes

(a) the concern that opposing clients may have about the appearance of proximity of lawyers sharing space, and

(b) the risk that lawyers sharing space may be exposed inadvertently to confidential information of an opposing client.

[added 02/95; amended 12/95; renumbered 05/96; 01/09]

6. Rules 7.1 to 7.9 apply to lawyers transferring to or from government service and into or out of an in-house counsel position, but do not extend to purely internal transfers in which, after transfer, the employer remains the same.

[added 02/95; renumbered 05/96; 01/09]

7. Rules 7.1 to 7.9 treat as one "law firm" such entities as the various legal services units of a government, a corporation with separate regional legal departments, an inter-provincial law firm and a legal aid program with many community law offices. The more autonomous that each such unit or office is, the easier it should be, in the event of a conflict, for the new firm to obtain the former client's consent.

[added 02/95; renumbered 05/96; 01/09; amended 02/09]

7.1 See the definition of "MDP" in Rule 1 and Rules 2-23.1 to 2-23.12 of the Law Society Rules.

[added 12/2009, effective 07/2010]

8. Rules 7.1 to 7.9 are intended to regulate lawyers and articled students who transfer between law firms. They also impose a general duty on lawyers to exercise due diligence in the supervision of non-lawyer staff, to ensure that they comply with the Rules and with the duty not to disclose confidences of clients of:

(a) the lawyer's firm, or

(b) other law firms in which the non-lawyer staff have worked.

[added 02/95; renumbered and amended 05/96; renumbered 01/09]

9. Appendix 5 to this Handbook may be helpful in determining what constitutes "reasonable measures" in this context.

Issues arising as a result of a transfer between law firms should be dealt with promptly. A lawyer's failure to promptly raise any issues identified may prejudice clients and may be considered sharp practice.

[added 02/95; amended 06/95; renumbered and amended 05/96; renumbered 01/09; amended 02/09]

*    *    *


Rules 1 and 2 - General principles

A lawyer who represented both a company and the majority shareholders in an action initiated by a minority shareholder who was claiming relief from oppression under the Company Act was found to be acting in a conflict of interest.
DCD 93- 5

Husband and wife lawyers are not prohibited from acting for clients whose interests conflict, provided full disclosure of the circumstances of the representation is made to the parties in accordance with Canon 3(2). (See also Chapter 7, Rule 2 which may prevent husband and wife acting for adverse parties in some circumstances.)
EC March 1995, item 12

A lawyer who is elected to a city council is prohibited from representing a client involved in litigation with the city.
EC December 1996, item 12

A lawyer may not act for two clients in separate matrimonial proceedings where the clients live together in a common law relationship. Because they reside in a common household, there is a danger that the representation he provides for one will affect the claim of the other. For example, there may be fewer resources in the common household to satisfy one party's claims. Furthermore, he may have obtained confidential information from both clients that may affect the representation of the other.
EC March 1997, item 9

It is improper for a lawyer to act for both the purchaser of a business and the bank that is advancing funds for the purchase of the business.
EC February 1997, item 9

A lawyer can never act jointly for two parties to a transaction where the interests of the parties are actually adverse. However, in limited circumstances, two opposite parties to a transaction could be described as not adverse in interest such that a lawyer could act for them jointly. Those circumstances might include the following:

  • where all issues with respect to the transaction have been agreed upon by the parties and the lawyer is asked only to prepare standard form documents to give effect to the transaction;
  • where both parties have requested that the lawyer prepare documentation to evidence an agreement negotiated by the parties, on the understanding that the parties own separate lawyers will use that documentation to conduct further negotiations, if necessary, and conclude an agreement; or
  • where lawyers for both parties retain a single lawyer to prepare documentation to give effect to an agreement, the separate lawyers for the parties have negotiated and are free to negotiate further if they choose.

Preparation of documents to give effect to an agreement already reached by the parties is not proper. The preparation of documents, other than standard form documents, will require a lawyer to emphasize certain aspects of the bargain that favour one party at the expense of the other.
EC July 2002, item 5

A recommendation of independent legal advice to both parties to a transaction is insufficient to permit a lawyer to act on both sides of the transaction.
EC December 2008, item 3

It is not improper for a lawyer to continue to act in a matter where the lawyer is prevented by an implied undertaking from disclosing relevant confidential information to a client, as long as the lawyer complies with the undertaking.
EC February 2009, item 3

Case Law

A lawyer was retained by the husband in a matrimonial dispute. Shortly thereafter, the lawyer had a telephone conversation with the wife who was seeking legal advice on her matrimonial problem. The wife was not aware that her husband had consulted the lawyer, and the lawyer did not realize during the call that the wife was married to her client. The wife was successful in her application to disqualify the lawyer from acting for her husband. She had divulged confidential information to the lawyer, even though she had not yet formally retained the lawyer.
Bell v. Nash
(1993), 83 B.C.L.R. (2d) 155 (C.A.)

Litigation arising out of a proxy battle between two groups of shareholders for control of a company was commenced. At a social occasion before litigation was commenced, one responding shareholder spoke about a matter not at issue in the dispute to a lawyer from the firm representing the petitioning shareholders. No disqualifying conflict of interest was found.
Sinclair v. Sutton Resources Ltd.
(1996) 21 B.C.L.R. (3d) 135 (S.C.)

The court declined an alleged bankrupts application to have a law firm representing the court appointed interim receiver removed on the basis that one of the lawyers acting for the petitioning creditors was married to one of the lawyers representing the interim receiver. The issue raised by the lawyers marital relationship could be addressed by an undertaking or affidavit deposing that no confidential information would be exchanged.
Re Down [1999] Civ. L.D. 537 (BCSC); [1999] BCJ No.1809

The court will not infer that lawyers who are married to each other will necessarily share professional confidences. However, there may be circumstances where a spousal relationship will prevent spouses from acting against each other for competing clients. Two examples are where they cannot give undivided loyalty to the clients, or where one or both spouses have a direct or indirect interest in a matter.
Grabber Industrial Products Central Ltd. v. Stewart, 2000 BCCA 206

The facts arose from a dispute within company S, which resulted in an action by the J group seeking relief against C, who was alleged to have been improperly representing herself as the sole director of the company and acting without regard for the shareholders. The first proceeding, brought by C, resulted in a court ordered AGM where directors from J group were elected as directors of S. C was not elected. Shortly thereafter, the petitioners in the second proceeding sought an order seeking return of shares, corporate records and documents from C, amongst others. In this application, the court queried why the petitioners sought the return of shares and documents as opposed to S itself. The lawyer amended the notice of motion, naming S as the applicant, and filing a notice of change of solicitor naming himself as solicitor for S. The result was that the lawyer was now counsel for the petitioners in the second proceeding, as well as counsel for one of the respondents in the same proceeding. The court found that the lawyer was not in a conflict of interest in the first proceeding, because S was not a party to the action, and because he represented only the interests of parties who claimed to be entitled to cause a meeting of the company to be convened. With respect to the second proceeding, the lawyer had placed himself in a conflict by representing S, as well as the petitioners in their personal capacity. The company required advice that was independent and objective and must be detached from the interests of the petitioners themselves. The advice could not be provided by a solicitor or counsel retained to act for both sides. The lawyer was removed as counsel for S and the J group.
Coutu v. Jorgensen, 2003 BCSC 1608

An expert report prepared by a lawyer as witness on behalf of the plaintiff in litigation was not admissible because the lawyer was in a conflict of interest, having been a partner in a firm that had provided advice to the defendant on a matter sufficiently related to the litigation in question. The report was prepared by a former partner of the lawyer who had previously advised the defendant at a time when the firm in which they were partners had been dissolved, but still appeared in the public eye, to be practicing together. The duty of confidentiality owed to clients includes a much broader principle of avoidance of conflicts of interest in which confidential information may or may not play a role.
Schober v. Walker, 2003 BCSC 783

In an action seeking removal of, and return of funds by the president of a society, the court allowed the same lawyer to act for the president and director of the society in proceedings brought by other (but not all) directors. The interests of the two clients the president and the society were not adverse. The Board of the society, and therefore the society itself, had concluded that the actions of the president were authorized. The positions of the society and its president were not adverse and while there was a potential for conflict, there was as yet no actual conflict of interest. The joint retainer therefore did not breach the duty of loyalty. Furthermore, the petitioners had not identified prejudice arising from the current representation, and it was late in the proceedings. Granting the application to remove the lawyer would undermine the fairness of the litigation process.
de Guzman v. de la Cruz, 2004 BCSC 36

In an ongoing battle for control of a society the dissident directors sought to remove counsel who acted for the incumbent directors and the society. The dissidents argued that it was improper for the incumbents to act and instruct counsel for the society until the court determined who was properly authorized to give instructions on behalf of the society. The court found no conflict between the incumbent directors and the society; their interests were parallel as each was striving to maintain the integrity of the society’s processes. It was only possible that the interests of the society and the incumbent directors would diverge if the court confirmed the validity of a meeting at which the dissidents appointed their own Board of Directors. Until the court declared that the meeting was valid, the incumbents were entitled to manage the society and instruct counsel. While the court has inherent jurisdiction to remove counsel, such power should be used sparingly, particularly when it contrary to the wishes of the client.
Philippine Community Centre Society v. DeGuzman, 2006 BCSC 1294

Where a lawyer concludes that past advice given to a current client concerning the tax implications of certain business ventures in which the client had been engaged may no longer be valid, the lawyer has a duty to advise the client of that view.  This duty arises even though the matters on which the lawyer’s firm now acts for the client are unrelated to the matters on which that advice was given.
Strother v. 3464920 Canada Inc.,
2007 SCC 24

A firm was precluded from acting in a number of proceedings involving a company (RID) and its shareholders. The firm had been acting for RID on litigation brought by it against a shareholder (RBL) and its principal (M). The firm had come into confidential information of RID in its relationship with RBL and M. The court concluded that this information would now be available to the majority shareholders in the oppression action if the firm was permitted to continue representing the company and its majority shareholders. It is reasonable for a shareholder to expect that a company, as a separate legal entity, will not take sides in a shareholder oppression action. It is equally reasonable for a shareholder to expect that corporate counsel will not put itself in a position where it finds itself obliged to share with the majority shareholders what it learned from the company about a party’s history as a shareholder in the company. Because the firm’s involvement had extended over a considerable period of time, the court could not conclude that it had not received confidential information that would be relevant to the dispute.
RBL Management Inc. v. Royal Island Development Ltd., 2007 BCSC 674

The plaintiff in an oppression action sought to remove the firm from acting for the company. The firm did not act for any shareholders, but had been retained as corporate counsel and had investigated matters in dispute. The firm had asked for the plaintiff’s resignation as director, and subsequently filed defences in a wrongful dismissal action and an oppression action brought by the plaintiff. The majority shareholders had their own counsel at all times. Because the plaintiff had claims against the company, it was unavoidable that the firm would take an adversarial position against him. However, disqualifying the firm would not solve the problem, and it was permitted to continue acting for the company.
Ewanchyna v. Canadian Community Reading Plan Inc., 2007 BCSC 1210

Where the joint retainer for a company and its shareholders was brief and no actual prejudice arose, one could infer that a lawyer had not received confidential information to the prejudice of the complaining shareholders and therefore be permitted to continue to act.
Jorgenson v. San Jose Mines Ltd., 2003 BCSC 1608

Rule 3 - Potential conflict

A mother and her children retained a lawyer to commence an action against the woman's husband and children's father in a motor vehicle accident case, alleging that he was driving negligently. The father alleged that the mother was contributorily negligent in failing to ensure the children's seatbelts were fastened. There was also a potential policy limits problem. The lawyer was in a conflict of interest, given the allegation that the mother might have a duty to ensure the children were wearing seatbelts. He should cease representing the mother and children. He had likely received confidential information from the mother, which he would be obliged to use to the benefit of the children if he continued to act for them. And, he would be unable to continue to represent the mother without disclosing confidential information received by him from the children. One lawyer could represent the children with great caution and in compliance with Chapter 6.
EC February 1996, item 9

A lawyer acted for a client in her capacity as administrator of her mother's estate for damages against a Tribal Council for taking her mother's land. Two years previously, the administrator and the Council approached him to act as an arbitrator in the matter. The Council Chief sent the lawyer a letter setting out the history of the dispute, offers that had been made, the status of the documents, and the position of the Department of Indian Affairs. In finding that it would be improper for the lawyer to continue to act as counsel for the administrator, the Committee noted that the lawyer's dealings with the Chief may have permitted him to understand the Council's strengths and weaknesses, apart from any strictly factual information imparted. That understanding could give the administrator an advantage in the ensuing litigation and undermine the Council's confidence in the integrity of both the arbitration and the litigation process. Furthermore, the public's confidence in arbitration generally may suffer. One member dissented, noting that the arbitration process had not commenced and the arbitrator had a clear obligation to share all information provided by him with both parties. The Council would not be prejudiced by him acting as counsel for the administrator.
EC April 2006, item 2

ICBC requires defences counsel to enter into a Strategic Alliance Agreement (SAA) with it, wherein counsel agree to decline to act against ICBC in some kinds of actions, although it does not prevent them from acting for plaintiffs against ICBC in other matters. The Trial Lawyers Association queried whether the agreement placed lawyers in a conflict or created ethical dilemmas for them. The Committee found:

  • A lawyer who has signed the SAA must not advise clients or act for clients where there is a reasonable basis for believing the evidence supports claims of this nature. Lawyers who are prevented from bringing claims by reason of their agreement with ICBC may properly refer them to other lawyers. A lawyer must cease acting for a client when he or she discovers that the client has a reasonable basis for commencing a claim that the lawyer is prevented from bringing.
  • A lawyer must not act for a client where there is a reasonable basis for a property damage claim involving ICBC, particularly where there is a potential claim for bad faith and/or punitive, aggravated, or exemplary damages against ICBC.
  • Where a lawyer acting for an ICBC-insured defendant believes that the plaintiffs claim may exceed the defendants policy limit, resulting in personal exposure, the lawyer must advise the client to seek independent legal advice. The terms of the SAA do not prevent a lawyer from doing this; in fact, the lawyer must act in the best interests of ICBC and its insureds.
  • A lawyer subject to the SAA must not act if the circumstances support a claim for punitive, aggravated, or exemplary damages against ICBC.
  • It is proper for a lawyer in good faith to recommend that a person obtain independent legal advice.

If ICBC refused to permit SAA lawyers to disclose the fact that they represent ICBC and cannot act in some kinds of matters because of their obligations to ICBC, the Committee would be prepared to consider the issue further.
EC April 2006, item 5

A lawyer represented a group of plaintiffs in class action proceedings. Settlement discussions were underway, but he anticipated that he could encounter a situation where all aspects of the proceeding were settled except counsel fees. He was concerned that would place him in a conflict of interest position that would require his withdrawal from the matter and queried whether the role of the Case Management judge may alleviate his concerns about potential conflict. The Committee observed that s. 38 of the Class Proceedings Act gives the court wide authority to determine a lawyers fees and disbursements in class proceedings and an agreement respecting fees is not enforceable unless approved by the court. The lawyer would not be in a conflict if all matters save fees were settled.
EC May 2006, item 3

Case Law

Lawyers acting for the plaintiff corporation and its majority shareholders were not removed in a dispute between persons who were all shareholders in the company in which their status as shareholders was incidental to the personal dispute. The risk of possible future conflict was not sufficiently great to enjoin the law firm from acting and might unfairly prejudice the company and shareholders seeking urgent injunctive relief
Will Millar Associates Co. v. Millar
(11 October 1995), Vancouver, No. 955407, (B.C.S.C.)

The accused paralegal (N) faced a 92-count indictment. One charged that he had fabricated court documents in a divorce action; another that concerned an alleged scheme to defraud a trust company. The accused's business partner was also implicated in the trust company matter. N had an ongoing relationship with a law firm (V). One lawyer at V acted for the business partner on her divorce. He knew that she would likely be charged in the trust company matter, and intended to run an aggressive defence against the accused for the benefit of the partner. While his firm had an ongoing solicitor-client relationship with the accused, the lawyer met with the accused for the sole purpose of collecting information from him that would be useful in the defence of the business partner. The two clients of the firm were therefore adverse in interest to each other. The court found that a lawyer owes a duty of loyalty to a current client of the lawyer (or his firm), which includes a broader principle of avoidance of conflicts of interest in which confidential information may or may not play a role. The court drew a bright line, saying that there is a general rule that a lawyer may not represent one client whose interests are directly adverse to the immediate interests of another current client even if the mandates are unrelated unless both clients consent after receiving full disclosure (and preferable independent legal advice), and the lawyer reasonably believes that he or she is able to represent each client without adversely affecting the other. Consent, in exceptional cases, could be inferred. For example, professional litigants such as banks or governments will understand that lawyers may act for and against them in sufficiently unrelated matters where there is no danger of confidential information being abused. In this case, despite finding a breach of duty of loyalty, the court held that no stay of proceedings was justified.
R. v. Neil, 2002 SCC 70

Rules 4, 5 and 6 - Acting for two or more clients

A lawyer who commences an action for negligence arising out of a mishap that occurs in the home on behalf of a mother and her children, with the mother acting as guardian ad litem for the children, must withdraw when the issue of contributory negligence on the part of the mother is raised by one of the defendants. Unless the lawyer has an agreement with the clients permitting him to continue to act for one of his clients, or unless the lawyer receives permission to continue to act for the mother of the children after a new guardian ad litem is appointed and after the children had obtained independent legal advice, a lawyer should not continue to act for any of the clients.
EC June 1996, item 6

Where a lawyer represented two clients whose cases were related but did not have an agreement with the clients to represent them jointly, it is improper for the lawyer to disclose to one clients new counsel any confidential information that he is holding on behalf of the other client.
EC June 1997, item 6

A lawyer acting jointly for an insured and the insurer in the defence of a claim for damages may accept insurer instructions to send confidential information to a third party auditor without the informed consent of the insured provided:

(1)   it would be proper for the lawyer to provide the information to the insurer itself; and

(2)   the insurer confirms to the lawyer in writing that:

(a)  the auditors services are required in order to facilitate the provision of legal services in the litigation;

(b) the arrangements in place with the auditor protect the confidentiality of the information the lawyer provides; and

(c) the insurer will notify the lawyer if condition i or ii above ceases to be true.

EC May 1999, item 6

Lawyers should not act for both spouses in bringing a joint petition for divorce, even if all matters have been resolved between the spouses.
EC April 2000, item 8 (But see EC October 2002, item 2)

A lawyer acting for more than one party in the preparation of a representation agreement must comply with the requirements for joint representation. In determining whether there is a conflict that may prevent the lawyer from acting, a lawyer may wish to meet with the parties separately. The interests of a representative and a monitor to the same agreement are sufficiently divergent that a lawyer cannot represent them jointly.
EC October 2000, item 3

A lawyer, including a lawyer who has acted as mediator for the spouses, may act for both spouses in a joint action for divorce, provided:

  • all relief sought is by consent; and
  • both parties have received independent legal advice in relation to the matter.

EC October 2002, item 2

Rule 4 must defer to legislation that prevents a lawyer from complying with it. However, where s. 148 of the Securities Act prevents a lawyer from complying with the requirement to share relevant information with joint clients, it does not necessarily follow that the joint retainer cannot proceed. It is proper for a lawyer to act for a client jointly where s. 148 of the Act prevents the lawyer from disclosing relevant information given by one joint client to another where:

  • The client is fully informed about the restrictions the lawyer is under in a manner that does not offend s. 148, and consents to the lawyer acting on this basis;
  • The lawyer provides the client with all relevant information, save information that s. 148 requires that the lawyer keep confidential; and

Notwithstanding the restrictions imposed by s. 148, the lawyer reasonably believes that the lawyer will be able to provide effective representation to each affected client.

EC December 2003, item 2

Where a lawyer proposes to represent two groups of plaintiffs in actions arising out of an investment scheme, it is improper for the lawyer to represent the groups jointly where the first group was not suing a defendant sued by the second group.
EC April 2008, item 4

A lawyer engaged by an insurer to represent an insured to defend a third-party liability claim may represent the insured alone or, with appropriate disclosure in accordance with Chapter 6 of the Professional Conduct Handbook, may represent both the insurer and the insured jointly with respect to all or some aspects of the matter. Where the representation is structured as a joint retainer, the lawyer has duties to both the insured and the insurer, and must take care to identify and avoid conflicts of interest between the two clients. So long as the insured is a client, the Rules of professional conduct — and not the insurance contract — govern the lawyer's obligations to the insured.
EC reported in October 2008 Benchers Bulletin

Where a lawyer acting for ICBC and an insured as joint clients knows that the insured opposes the admission of liability or the terms of a proposed settlement, the lawyer must give the insured reasonable notice of ICBC's intention to admit liability or settle the claim.
EC April 2009, item 4a

The conflict provisions of the Professional Conduct Handbook do not require a lawyer acting jointly for ICBC and the insured to withdraw where the insured objects to ICBC instructing the lawyer, as long as the instructions from ICBC are in the areas permitted by Regulation 74.1 of the Insurance (Vehicle) Act.
EC April 2009, item 4b

While an insured may not wish to be represented by a lawyer appointed by ICBC and may either retain his or her own counsel or elect to self represent, that does not affect ICBC's right to control the defence in the ways permitted by Regulation 74.1.
EC April 2009, item 4c  

Where a lawyer is acting for ICBC and an insured as joint clients the insured is entitled to receive the same information from counsel that ICBC receives.
EC April 2009, item 4d

A lawyer who acts jointly for the insurer and an insured may properly decline to provide information to an insured with the insured's consent.
EC April 2009, item 4e  

A lawyer acted for the purchaser and mortgagee in a real estate transaction. The purchaser flipped the property and entered into an agreement with another purchaser, whom the lawyer also represented. The lawyer breached his fiduciary duty to the second purchaser by failing to disclose each party's interest in the transaction to every other party and obtaining their consent, and in failing to disclose the profit being made in the second conveyance.
2004 LSBC 40

Case Law

A lawyer acting for an injured plaintiff in a motor vehicle accident where the defendant owner was also a passenger in the vehicle agreed to obtain information relating to the owner's claim and, in the course of doing so, obtained confidential information relevant to the action. The lawyer was removed as solicitor of record for the plaintiff and ordered to cease acting for any of the parties.
Clouthier v. Milljour
(11 August 1995), Nanaimo, No. 7113, (B.C.S.C.)

A lawyer was prohibited from acting for the both majority shareholders and the company in a proceeding where a minority shareholder petitioned for relief under s. 224 of the Company Act.
Gaylor v. Galiano Trading Co. (30 August 1996), Vancouver, No. A962077, (B.C.S.C.); supplementary reasons September 18, 1996.

ICBC appointed one lawyer to defend four separate motor vehicle actions against one plaintiff. The court ordered the four actions to be heard together. The trial judge refused to permit the trials to proceed on the basis that counsel for the defendants was in a conflict of interest. The Court of Appeal allowed the appeal as there was no apparent conflict that justified the interference of the court.
Mara (Guardian ad litem of) v. Blake (25 April 1996), Vancouver, No. CA019711, (B.C.C.A.)

The plaintiffs had lived in premises that were destroyed by fire and alleged the defendant set the fire. The defendant counterclaimed that one of the plaintiffs set the fire. The defendant had previously faced criminal charges arising out of the fire. A judicial stay of proceedings had been entered on one count, and the defendant was acquitted on the other three counts. The defendant sought to remove the plaintiffs' solicitor on the basis that there was a conflict of interest between the parties for whom the solicitor acted. The court dismissed the application, concluding that it should not intervene concerning the plaintiffs choice of counsel. There was a potential conflict, but with informed consent, counsel could act for more than one party in circumstances that might give rise to divided loyalties. The lawyer had said he complied with Law Society provisions, and he must be taken at his word. Although a theoretical conflict might exist, it was a conflict that arose on the evidence of the defendant, evidence that might not be accepted by the court.
Davies v. Pedersen 2002 BCSC 1245

The city applied to restrain the plaintiff's counsel from acting on the grounds that the firm initially represented the city on other matters that were sufficiently related to establish that a conflict existed. For a significant period of time, the law firm was acting for both parties. The court concluded that even if the two matters were sufficiently related, that fact alone should not lead the court to infer that confidential information was imparted. A reasonably informed person would be satisfied objectively that no confidential information came into the firm's hands that would or could be used by the firm to the prejudice of the city. The firm could continue to act for the plaintiff.
Ribeiro v. Vancouver (City) 2002 BCCA 678; leave to appeal refused September 11, 2003.

The plaintiff commenced a lien action against the defendant, who retained a law firm to represent it. The firm was already on retainer to the plaintiff for ongoing corporate, commercial, and other solicitor's work. The plaintiff did not consent to the firm acting for the defendant. The firm terminated its retainer with the plaintiff. The plaintiff sought an order restraining the firm from acting for the defendant. Although the court found that the two retainers were unrelated, it granted an order removing the firm. The bright line rule applied. A lawyer or law firm must not put his or their own business interests ahead of the client's.
Toddglen Construction Limited v. Concord Adex Developments Corp. [2004] O.J. No. 1788

A lawyer who acted for joint plaintiffs need not be removed from continuing to act for one plaintiff when the other terminated the retainer and sought new counsel. Due to the joint retainer, all confidential information between the clients would have had to be shared. The issues in this case were not likely to put the firm into a position where it would be tempted to use the confidential information of the departing client, particularly because the two parties remained as joint plaintiffs in an action that had common interests.
Saddle Lake Indian Band v. Canada, 2006 F.C. 27

Rule 7 - Acting against a former client

A lawyer is in a disqualifying conflict of interest in a divorce proceeding when he represents a client whose wife (and opposing party) was a former client in divorce proceedings that took place approximately ten years ago.
EC December 1993, item 5

A lawyer served as in-house counsel to an Indian Band, and gave advice regarding a utility company owned by the Band. Shortly after leaving her position, she began acting for two Band members (as representatives of other Band members) in bringing an action on behalf of the utility company against the company's directors and officers alleging, amongst other things, breach of fiduciary duty. Three of the respondents in the action were Band councilors and one was the Chief at the time the lawyer had been in-house counsel. The lawyer was found to be acting in a conflict of interest because the action concerned matters and referred to information and facts that would have come to her in her capacity as in-house counsel.
DCD 99-32

Where an associate in the firm has previously represented a witness while working at another firm, it is improper for a lawyer to act for a plaintiff in an action where the lawyer would have to explore the witness credibility and potential bias in cross examination touching on confidential information the witness would have disclosed to the associate in the former representation.
EC May 2000, item 6

It is generally appropriate to impute the conflicts of one lawyer in a firm to all other lawyers in the firm in circumstances involving Rule 7. However in circumstances where the departing lawyer had only a short consultation with the affected client, left the firm without discussing the facts of the case with any other members of the firm and took all notes with him, it is proper for a lawyer in the firm to act against the client on the basis that the confidential information disclosed to the lawyer who left the firm should not be imputed to the other lawyers in the firm.
EC June 2000, item 3 (See also Mottershead v. Burdwood Bay Settlement Co. [1999] Civ. L.D. 379 (B.C.S.C.))

A lawyer was acting for C Co. in an action for debt and unjust enrichment against F Co. and its director, S. The lawyer had previously been retained by F Co. to conduct a lien search of the same premises in issue, although counsel at a different firm removed the liens for F Co. However, in the course of his consultation with the S about the lien matter, S discussed the work that C Co. had preformed for F Co. The lawyer was prevented from acting for C Co. It could not be said that this work was substantially unrelated to the work he did for his former client. The confidential information he had received might reasonably affect representation of his new client.
EC December 2001, item 7

A lawyer was not called to the bar at the time he represented the province in general land negotiations with his current client. He acted in a senior capacity for the province in a relationship of trust and substantial responsibility. His current status as a lawyer did not permit him to act toward the province in any way inconsistent with the obligations flowing from such a relationship. Therefore, the lawyer could not act for the client unless the province consented.
EC July 2003, item 4

Where a law firm acts for a client who is the lessee of aboriginal land, and acted on behalf of another client who purchased an assignment of a sub-lease on the land, it is not proper for the firm to act against the sub-lessee in an action to remove her as a tenant. The firm's obligations to the purchaser were to ensure that she received a secure interest in land, and the lessees action may be to deprive her of that interest.
EC July 2003, item 5

Lawyer A acted for a client in a matrimonial matter ten years before joining lawyer Bs firm. The file was in storage. B acted for a client being sued by As former client for constructive trust, quantum meruit, and spousal maintenance. Although the conflicts of one lawyer are generally imputed to other lawyers in the firm, if A had any relevant confidential information from her previous representation, it was not necessary to impute knowledge of that information to B, and B could continue to act for his client.
EC September 2003, item 6

A lawyer who is listed on a firm's letterhead as associate counsel (who keeps separate financial statements and remits monthly overhead costs to the law firm) is deemed to have the same professional obligations to the public, other lawyers, and the Law Society as if they were practicing in a partnership. Those obligations generally require the conflict of one lawyer in a firm to be imputed to all other lawyers in the firm.
EC September 2003, item 8

A lawyer should not be prohibited from acting for a client in matrimonial proceedings where her estranged husband previously consulted with him on a wills variation matter because it was substantially unrelated to the current matter and the lawyer had no confidential information from the former matter that would be relevant to the current one.
EC March 2005, item 6

In some unique circumstances it may be proper for a lawyer to act on an application to have a committee appointed for a former client. The situation may arise where the lawyer has acted for a client over a period of years and a new client, often a family member, consults the lawyer to have a committee appointed. Such applications may be contentious and require a trial to determine the issues.  If the client does not consent to the appointment of the committee, or is unable to do so, Rule 7 will permit a lawyer to act against the client on a committeeship application in some circumstances: if the application is unrelated to the work the lawyer formerly did for the client and the lawyer has no confidential information from that work relevant to the committeeship application.
EC May 2005, item 5

A lawyer was the solicitor and registered and records office for a company. He also acted for the proprietor of the company, D, when she transferred her shares to her three daughters. When D died, she named her daughters as executors and the lawyer acted for them in probating the estate. One of the daughters purchased the shares of her sisters, and a dispute arose as to the value of those shares. The lawyer represented one of the daughters (the defendant) in the action. The Committee found that the lawyer was not in a conflict by representing the defendant. If he were to be a witness to any matters in relation to the litigation, he would be bound to comply with Chapter 8, Rule 9. His position as solicitor and records office for the company did not place him in a conflict. The company was not a party to the litigation and he owed no duty to refrain from acting against the plaintiff by virtue of her status as shareholder. His representation of the defendant in the current matter and representation of the plaintiff in her capacity as executor had no common issues. The lawyer did not have confidential information about the plaintiff arising from his former representation of her.
EC September 2006, item 7

Case Law

In a number of civil actions, the defendant petitioned to have the law firm representing the plaintiffs disqualified on the grounds that it was associated with firms in Toronto and Montreal in an international partnership, and the defendant had consulted the Toronto firm on a number of matters, including the defence of the action in question. The application was denied. The Court of Appeal found that no confidential knowledge could be attributed to the Vancouver lawyers as the firms remained distinct entities.
Manville Canada Inc. v. Ladner Downs (1992), 63 B.C.L.R. (2d) 102 (B.C.S.C.); affirmed on appeal (1993), 76 B.C.L.R. (2d) 273 (B.C.C.A.).

A lawyer who was a member of the firm that had represented the regional district on a petitioners first application to rezone his property was disqualified from acting for the petitioner when he wished to take proceedings regarding the refusal of his second zoning application under the Judicial Review Procedure Act. The Court of Appeal confirmed the disqualification.
Bekar v. Regional District of Bulkley Nechako (1993), 26 B.C.A.C. 78

A lawyer retained a specialist law firm to provide tax advice for a client. The client later took his legal business to the specialist firm and asked them to seek a review of the legal services provided by the first lawyer on the basis that he did not provide value for money. The lawyer applied to disqualify the tax firm. The application was allowed on the basis that the confidentiality of the relationship should be protected, whether or not it was one of solicitor and client. The potential existed for the tax firm to acquire special awareness of the first lawyer's knowledge and experience and how he conducted his legal business, which would become relevant on the taxation.
308723 B.C. Ltd. v. Syberg-Olsen, Poulsen & Co. (1994), 97 B.C.L.R. (2d) 384 (S.C.)

No disqualifying conflict of interest was found when a client who was a shareholder in a family corporation employed the same law firm which acted for the corporation to represent her in divorce litigation against the respondent as the respondent had never had a solicitor-client relationship with the law firm nor communicated confidential information to the firm.
Arends v. Arends (27 September 1995), Chilliwack, No D00010607, (B.C.S.C.)

The partner of Crown counsel in a prosecution against the accused had acted for the accused six to nine years before the date set for trial in both civil matters and unrelated criminal charges. Crown counsel had joined the partner's firm two years previously. Due to the lapse of time and lack of relevance to the current charges, a reasonably informed member of the public would be satisfied there was no danger of the transmission of confidential information. And, the timing of the application (four days before trial) gave rise to an inference that the accused's application had been brought for the purpose of delay.
R. v. Johnson [1995] B.C.J. No. 2754 (S.C.)

A law firm was retained to act for a plaintiff in an action for damages for the collapse of a retaining wall on a real estate project. Although the law firm had acted for the defendant and its subsidiaries on various matters for many years, it had never acted for the division that was being sued, nor had it ever acted on a matter that would give it confidential information on the present claim. The court assumed there was some conflict, but it did not outweigh the substantial prejudice that would accrue to the plaintiff should it be deprived of its counsel of choice so late in the proceedings.
Lafarge Construction Materials Precast Division. v. Lawson Lundell Lawson & MacIntosh (20 October 1995), Vancouver, No. 955214, (B.C.S.C.)

The plaintiffs retained K to prepare their tax returns, and were advised that their previous accountant, D, had given them inadequate advice. They employed a law firm, recommended by K, to bring an action against D. One of the firm's lawyers worked with one of K's accountants to prepare the case against D. Ultimately, K was joined as a defendant. K argued that the lawyers were in a conflict of interest, which required their removal. The court agreed. The relationship of the petitioner accountants with the lawyers was not one of solicitor and client. However, the accountants previous relationship with the lawyers was sufficiently related to the matter from which the firm sought to remove the lawyers so as to presume that the accountants imparted confidential information to the lawyers.
KPMG Peat Marwick Thorne v. Davis & Co. (4 September 1996), Vancouver, No. A961214, (B.C.S.C.)

Respondent solicitors were prohibited from acting in an action involving a joint venture agreement because a lawyer at the respondent law firm had previously represented the petitioners with respect to a loan, and the president of the petitioner company had had many confidential discussions with a solicitor from the respondent firm with respect to the loan transaction.
437192 B.C. Ltd. v. Watson Goepel Maledy [1997] B.C.W.L.D. 1238 (S.C.)

The plaintiff and defendant were in a common law relationship for ten years. The lawyer was a friend and business partner of the defendant and represented the plaintiff in separate divorce proceedings during that time. When the common law relationship ended, the plaintiff brought an action against the defendant for an interest in their property and the defendant retained the lawyer to act for him. The plaintiff applied to restrain the lawyer from acting for the defendant on the grounds that there was sufficient relationship between her earlier divorce retainer and the current one to prohibit him from acting in the new matter. On appeal, the court found that the connection between the two cases was sufficient to warrant the lawyers removal from the case. The discretion to restrain a lawyer from acting may be applied more readily in the context of family law.
Rosin v. MacPhail [1997] B.C.W.L.D. 189 (B.C.C.A.)

A party recovered judgment for $5 million against a regional district, C, and others. The defendants combined insurance was $3 million. C sued ICBC and others, claiming bad faith in admitting liability without proper consultation. A lawyer, W, had advised C at the time. C retained a law firm, R, to act for it in its action against ICBC. One of R's lawyers met with W to prepare him for examination for discovery, as he would have to give evidence on behalf of the district. R later decided to add W as a defendant, and he applied for an order to remove R as solicitor and be enjoined from disclosing any confidential information obtained from him. The Court of Appeal ordered that R be removed from the case. What happened between R and W gave rise to an obligation or duty of fairness to W and he should have been warned of his potential liability.
Williamson v. Roberts & Griffin [1997] Civ. L.D. 760 (B.C.C.A)

The husband sought to prevent the wife's lawyer from acting in divorce proceedings. The lawyer had represented the husband in a number of matters prior to the parties' separation. He knew the husband socially, had prepared joint wills of the parties 9 years previously, and 2 months before the separation had provided the husband with legal advice on a family financial matter. The former social relationship and the wills retainer were not so significant so as to deprive the wife of her choice of lawyer. However, the most recent advice may have given the lawyer knowledge of the husband's approach to financial issues and insight into his character. For this reason, the lawyer and his firm were prohibited from acting for the wife.
Burgess v. Burgess (1998) Civ. L.D. 83 (S.C).

A law firm was allowed to act for the plaintiff in spite of the defendants allegation of a conflict. The alleged conflict arose from the fact that the firm had previously acted for the defendant on an unrelated matter during which the plaintiff provided prejudicial and confidential information to the firm regarding securities trading. The court found no factual information linking the current cases with the previous one.
Golden Capital Securities Ltd. v. Holmes (26 August 1998), Vancouver, No. C964230 (B.C.S.C.)

The parties retained a lawyer in a house purchase transaction in 1978. Shortly thereafter, the wife sought the lawyers advice regarding allegations of physical and sexual assault by her husband. The lawyer advised both parties that he would not be able to act for either of them. In 1994, the wife commenced an action for the removal of her husbands name from title of the house. The husband retained another lawyer from the same firm that had represented them in the house purchase. The new lawyer was not at the firm in 1978, and the original lawyer had left the firm. The court disqualified the husband's lawyer and law firm from acting. The parties' legal affairs ceased to be routine or simple when the plaintiff consulted the firm about the assault allegations. The basis for the conflict that required independent legal advice in 1978 had not eroded over time and there was a possibility that the wife's confidential information could be used against her.
McBurnie v. Bailly (21 October 1998), Victoria, No. 944584 (B.C.S.C.)

The court declined an order restraining a defendant's lawyer from continuing to act in an estate matter on the basis that the lawyer had previously jointly represented both the plaintiff and the defendant in an action for damages arising out of a motor vehicle action six years before. The lawyer had never received any confidential information from the plaintiff or had any contact with her during the previous representation as the lawyer dealt only with the defendant.
Sherman v. Ulrich[1999] Civ. L.D. 571 (B.C.S.C.)

An applicant to the defence of an action for the resolution of ownership of company assets commenced nine years earlier sought the removal of lawyer R who acted for two other defendants. The applicant had consulted lawyer O (in R's firm) three years earlier for approximately 45 minutes without retaining him on the same issue. O left the firm one year after the consultation, taking his notes concerning the matter with him. O also gave affidavit evidence he had not disclosed any information or advice he gave the applicant to any member of his former firm. The court declined to remove the lawyer.
Mottershead v. Burdwood Bay Settlement Co. [1999] Civ. L.D. 379 (B.C.S.C.)

G was dismissed from his employment; the plaintiff union filed a grievance on his behalf, and retained A to act. A met with G to prepare for the arbitration. The plaintiff union subsequently instructed A to bring a defamation action against G. A arranged for another lawyer to represent G at the arbitration hearing. The court held that A could not act for the union in the defamation action. G was not a casual witness in the arbitration proceedings. A reasonable person, reasonably informed, would perceive that A would have an unfair advantage in going against G in the defamation action.
United Food & Commercial Union, Local 1518 v. Christian Labour Association of Canada (19 April 1999), Vancouver, No.C957457, (B.C.S.C.)

The parties had previously consulted with a lawyer about a property dispute with a third person. The husband subsequently retained the same lawyer when they became involved in a marital dispute. The wife sought to disqualify the lawyer, claiming that she had previously discussed their financial circumstances and parenting roles with him and that he had gained insight into character and circumstances. The court denied her application, finding that it was not probable that the lawyer had received confidential information from the wife regarding the marital dispute.
Percheson v. Osler 2000 BCSC 392

Three corporate plaintiffs brought an action against three defendants for the unauthorized distribution of Asian movies, in violation of the plaintiff's copyright. The plaintiffs applied to restrain the law firm from acting for the defendants because they had previously acted for the plaintiffs in a copyright matter. The court declined to make such an order because there was insufficient factual connection between the prior representation and the current litigation to warrant such an order. Although both actions involved copyrights of Asian movies, the similarity of the matters ended there.
LS Entertainment Group Inc. v. Wong 2000 BCSC 1789

A law firm entered an appearance for defendants in an action commenced by the plaintiff, its former client. The court disqualified the firm from acting on the basis that the current matter was sufficiently related to the former retainer that a burden was placed on counsel to establish that no confidential information, which includes an understanding of the opponents strengths and weaknesses, actually did pass. The fact that the plaintiff had consented to counsel acting for the defendant in negotiations that had been conducted with the plaintiff a year prior to litigation did not disentitle the plaintiff from objecting to the representation once litigation between the parties was inevitable.
Peel Financial Holdings Ltd. v. Western Delta Lands Partnership 2001 BCSC 1560

The plaintiff operated a restaurant from premises that it owned within a strata unit in the defendant strata corporation. The defendant M owned a majority of the units and had effective control over it. A dispute arose regarding use of a door, and the plaintiff obtained an injunction enabling it to use the door. The plaintiffs lawyer had previously acted for M, who sought to prevent the lawyer from acting in a further application for special costs. The court found that the lawyer was in a conflict because he had defended M in a criminal charge 5 years previously, and had received confidential information attributable to the solicitor-client relationship between himself and M that was relevant to the new matter. He would have obtained from M information of a personal nature that would be relevant in the current matter, since special costs were sought as a result of M's alleged intransigence and arrogance.
Ambleside Chinese Restaurant v. Strata Corp VR 575 and Madatali 2001 BCSC 1182

The plaintiff wife argued that a previous separation agreement between the parties was unfair and sought an equal division of assets. The wife's lawyer had acted for the husband's father 6 years previously in a matrimonial action. In disqualifying the wife's lawyer from acting, the court found that he had acquired confidential information about the husband's financial situation, including the financial arrangements between the husband and his father and information about the assets at issue in the current litigation.
Starr v. Starr 2001 BCSC 1132

The plaintiff claimed that the defendant, then president of a housing society, defamed him by alleging a forgery of documents. The defendants counsel had previously represented the plaintiff in an action alleging a breach of the Municipal Act in that she had, as a municipal councillor, an interest in a contract with the housing society. Counsel for the defendant said there was no relationship between the two actions one related to breach of a statute, whereas the other was an action in defamation. The court disagreed, stating that view of the issues was too narrow and that the integrity and reputation of the plaintiff in the present action was integral to both actions. Once it is shown that there was a previous relationship related to the retainer, the court should infer that confidential information was imparted, unless the solicitor satisfies the court that no information was imparted which could be relevant. The solicitor has a heavy burden to discharge.
Harris v. Reichardt 2001 BCSC 1824

The parties had met with the plaintiff wife's lawyer about 10 years earlier, after they had separated. The defendant applied to restrain his wife's lawyer from acting for her in divorce proceedings. The application was dismissed by the Supreme Court and leave to appeal was refused. It would have been clear to the defendant that the solicitor could not keep any information confidential from the plaintiff when both were present at the time the defendant revealed the information to the lawyer. The fact that the parties had jointly consulted a lawyer would not necessarily be dispositive of all applications to remove the lawyer. In the circumstances of this case, there was no air of reality that anything of significance to the present litigation was dealt with in the earlier brief meeting between the parties and the solicitor.
Tjader v. Tjader, 2002 BCSC 1389; 2002 BCCA 593

The plaintiffs alleged that a law firm was in a conflict of interest by acting for the defendant corporation because it had provided advice to the plaintiffs on certain agreements, the validity of which were the central issue of the litigation. The plaintiffs claimed that the firm provided advice to the plaintiffs as individuals (apart from their role as officers of the defendant corporation), and was therefore in a solicitor-client relationship with the plaintiffs. The court found that the firm should be permitted to continue acting for the defendants, having never acted for the plaintiffs nor any of the individuals except in their capacity as directors of the corporate defendant. The plaintiffs did not have a reasonable expectation that their confidential information was to be kept from the defendant and, in any event, confidential information was not imparted.
Hem Mines Limited NPL v. Omax Resources Ltd. and Hemmerich 2003 BCSC 1339

The court considered whether counsel should be disqualified from acting for the former executors of an estate to secure their claims for fees against a trust deposit in proceedings where the beneficiaries of the estate were applying for a release of the funds. The beneficiaries claimed that the lawyer in question had acted for the former executors when they were supposed to be protecting the interests of the beneficiaries. The lawyer was now acting for the former executors in circumstances adverse in interest to the beneficiaries. The court dismissed the application to disqualify the lawyers. The lawyer, in acting for the executors, had never acted for the beneficiaries. They had been separately represented by counsel themselves, and never had confidential communications with the former executors. Furthermore, the lawyer had acted for the executors for many years without complaint by the beneficiaries.
Jackson v. Ritch 2003 BCSC 1942

The defendant purchased equipment for the use and benefit of the plaintiffs. One piece of equipment was destroyed, but the insurer refused to pay on the policy. The parties jointly instructed the law firm to sue on the insurance contract. Although an action was not commenced, the insurer ultimately paid jointly to the plaintiff and defendant. The plaintiff signed a release. The plaintiffs claimed that the release was executed under duress, and that the proceeds were inadequate; they sought to enjoin the law firm from acting for the defendant. The firm contended that the only occasion on which it could have received confidential information relevant to the action was during the joint engagement when instructed to sue on the insurance contract. The plaintiffs could not expect confidentiality. The court found that the firm had acted jointly for the parties in obtaining the insurance proceeds, and there was a substantial relationship between the two retainers. A reasonably informed person could not be satisfied that confidential information was not disclosed. In this case, the interest that justice appear to be done outweighed the clients right to counsel of choice.
Zaworski and Zaworski Logging Limited v. Carrier Lumber 2003 BCSC 565

M acted for the plaintiffs in a proceeding to overturn the 2002 election of the executive of the defendant society. In 1997, M had acted for a group of individuals, including B, who had been defeated in an election in 1996 of the same society. M's clients, including B, were successful and became directors of the society. An ongoing dispute within the society existed in 1997 and persisted through 2002. Litigation ensued. M did not act for the society, nor for any individuals involved in the litigation. In the proceedings arising out of the 2002 election, M acted for the plaintiffs to set aside the election results on behalf of some individuals. The defendants were the elected directors and the society itself. B was therefore one of the defendants. After a period of time, an application was made to remove M as solicitor. The BCSC granted the order; the BCCA allowed the appeal, determining that the heart of the current litigation was the 2002 election. Whether it was a properly constituted election depended on particular facts of that election, not what happened in the 1996 election when M had previously acted. The question is whether the lawyer received information that was relevant to the current issue and whether there was a risk that such relevant confidential information will be used to the prejudice of the client. There was no basis for a finding that confidential information was imparted to M by B.
Tahal Singh Kaila v. Khalsa Diwan Society 2004 BCCA 236

N acted for the defendant in a construction dispute. N’s law partner had acted briefly for the plaintiff’s wife in a matrimonial dispute, and had obtained information of the plaintiff’s financial circumstances. This information could be influential in the lawsuit; if the defendant was successful, it could diminish the value of the asset over which the wife had a claim. However, at the time of the application to remove N as counsel, his partner no longer acted for the plaintiff’s wife. While the firm could not use any confidential information against the plaintiff because it no longer had the information, it was not unreasonable for the plaintiff to suspect that information might have been passed to N. The court accepted N’s assurance that confidentiality had been maintained, but concluded that the appearance of justice would be harmed if N’s firm continued to act.
Tranfo v. Edel 2006 BCSC 1849

The lawyer V had acted for the testator on a number of matters, including the drafting of a will for the testator and his then-wife, B. The couple later divorced, but V did not act for either of them.  When drafting the will for the testator, V would have reviewed the testator’s assets, his obligations, and potential claims against the estate. V acted for the plaintiffs, the two children of the marriage between V and B, in a Wills Variation Act application. V did not draft the will in dispute. Although V claimed not to remember anything about the testator’s estate, it was reasonable to presume that confidential information would have been disclosed. It was possible that V’s memory of the information would be triggered during litigation. V had obtained sufficiently related information and could be used to the defendant’s detriment. Furthermore, the testator was not alive to waive privilege. For these reasons, V was disqualified from acting.
Knoglinger v. Solbakken, 2007 BCSC 157

The Court of Appeal permitted the lawyer, M, to act against a former client (GVRD) concerning the validity and enforcement of expropriations that took place in the 1970s. M now acted for a client against the GVRD, challenging the validity and enforceability of an expropriation by the GVRD in 1971. Although M had certainly received confidential information, it was not relevant to the issue in dispute and would not prejudice the GVRD’s defence of the action.
Greater Vancouver Regional District v. Melville
2007 BCCA 410

The plaintiffs were related companies operating taxi businesses. They were clients of the defendant lawyer. They alleged that the defendant breached his fiduciary and contractual duties and duty of confidentiality by acting for a competing taxi company in proceedings before the BC Public Transportation Board. The plaintiffs were opposing those proceedings. There were fair questions to be tried – one was whether the plaintiffs had consented to the lawyer acting for the competitor. The other question was whether the facts relevant to the plaintiff’s application before the Board two years earlier might be relevant to the matters before the Board in the current proceedings. The court granted an interim injunction, restraining the lawyer from acting for the new client before the Board. The lawyer had not discharged the heavy burden that no confidential information had been given to him by the plaintiffs that could be relevant to the current matter. The court declined to grant a permanent injunction restraining the lawyer from ever acting for the new client before the Board.
Richmond Taxi Co. Holdings v. Robbins, 2007 BCSC 1680

Gaining insight into the client’s character, and learning of his litigation strategies and attitude to litigation risks may be relevant information to a subsequent retainer against that client, even though they arise out of different matters, and can result in disqualification of counsel.
Skjerpen v. Johnson, 2007 BCSC 1290

Rules 7.1 to 7.9 - Conflicts arising as a result of transfer between law firms

It is proper for a lawyer employed by a trade union to transfer her employment from the union to management in the same environment provided she complies with the requirements of Chapter 6, Rule 7.4 of the Professional Conduct Handbook.
EC July 1997, item 7

It is not necessary for a lawyer to withdraw from a case where a (non-lawyer) assistant left opposing counsels employment to work in his office, provided the following steps are taken to protect confidentiality:

  • all relevant files are removed from the assistants work area;
  • the assistant will not work on any of the relevant files;
  • the assistant will have no involvement in any aspect of the files;
  • the assistant is reminded of the sensitivity of the information she obtained during her previous employment and that it must remain confidential; and
  • the other assistants are reminded of the sensitivity of the situation and are directed not to discuss any aspects of the files with the new assistant.

EC December 2002, item 5

Case Law

A law firm was disqualified from continuing to represent a plaintiff in litigation because one of the firm's associates, who was not involved in the file, had previously done legal work for the defendant while at another firm.
Macdonald Estate v. Martin [1990] 3 S.C.R. 1235

An application to disqualify a lawyer from acting on behalf of litigants was allowed, but an order disqualifying the firm from continuing to act in the matter was not allowed. The lawyer in question had been a partner in a firm appointed by the petitioners insurers to defend it in several negligence actions. The lawyer then left that firm and became a partner in the respondent firm, which acted for parties opposing the petitioner in other actions. The respondent law firm had put into effect screening devices suggested by the guidelines included in the proposals of the Federation of Law Societies Committee on Conflicts of Interest.
Choukalos Woodburn McKenzie Maranda Ltd. v. Smith, Lyons, Torrance, Stevenson & Mayer (1994), 97 B.C.L.R. (2d) 122 (S.C.)

The court refused an application to disqualify a firm from representing its client when a new partner acquired by merger had previously advised the opposing party. The prior advice, all of which related to labour relations and other employment issues, was not related to the current commercial dispute.
Countryside Food Store Ltd. v. Duncan Mall Ltd. [1994] B.C.W.L.D. 564 (S.C.)

The British Columbia Court of Appeal considered whether a lawyer should be disqualified from acting in a matter in which a lawyer with whom he shared office space had once advised the opposing party. The two lawyers shared a common receptionist, fax machine and photocopier but had separate telephone lines, filing systems, books of accounts and secretaries. A reasonable member of the public who knew the facts of the case would conclude that no unauthorized disclosure of confidential information had occurred and thus the lawyer should not be disqualified.
Baumgartner v. Baumgartner (1995), 2 B.C.L.R. (3d) 126

A law firm was disqualified from acting for the plaintiffs in an action as a lawyer from the defendants firm transferred employment to the firm representing the plaintiff. The lawyer had worked on the defence of the action as an articled student and no institutional mechanisms were put in place by the plaintiff's law firm at the time the lawyer joined the firm to isolate the lawyer from the conduct of the case.
Poehler v. Langer [1999] Civ. L.D. 165 (B.C.S.C.)

Conflicts of one lawyer will not automatically be imputed to the firm, although that outcome appears likely unless the conflicted lawyer no longer practices with the firm and it can be established that no confidential information is at risk. Whether the issue of conflict has been raised in a timely fashion can also be decisive.
Cathedral Ventures Ltd. v. Gartrell 2000 BCSC 1020

The defendant husband sought to disqualify the law firm retained by his wife in matrimonial litigation on the basis that the lawyer in that firm had been an associate in the firm he engaged to convey his interest in the matrimonial home to one of his children the previous year. The lawyer later moved to the firm representing the wife. In refusing the husbands application, the court found that the conveyancing and matrimonial matters were unrelated and that no confidential information was imparted to the husband's law firm in connection with the conveyancing matter that was relevant to the matrimonial litigation.
Chan v. Siow, 2001 BCSC 167

A law firm, F, represented the defendant city in an action by the corporate plaintiff. An associate of F had previously been an associate at a firm that acted for the plaintiff in related matters. Since joining the new firm, the lawyer had never discussed any information concerning the plaintiff, including the fact that he had been involved in litigation concerning the plaintiff. The client had a close working relationship with F, and did not want to obtain new counsel. The court, however, disqualified F from acting for the defendant. The heavy burden of proof on the law firm that confidential information was not shared is not usually satisfied simply on the say-so of lawyers. F should have implemented measures when it first accepted the client's retainer to alert the members of the firm that it intended to act. This would have revealed that the lawyer had a conflict of interest, causing F to put into place certain measures, such as the ethical screen, or Chinese wall. The wall should be put into place when the possibility of conflicting and sharing confidential information first arises.
Alcan Inc. v. Farris, Vaughan, Wills & Murphy, 2004 BCSC 784

The plaintiff faced charges arising from a fire on premises owned in part by her. She retained R. R's nominal partner acted for another client, who was also charged with respect to the fire. F said he set the fire at the plaintiff's request and she was convicted. The plaintiff brought an action against R, alleging he acted in a conflict of interest by allowing his partner to represent F, whose interests were adverse to hers. Her action for recovery of her fees was not successful. While R and his nominal partner shared an office and a receptionist, they did not share files. Although the two clients interests were clearly adverse, the partner did not prepare F for the plaintiff's trial. R also told the plaintiff that he was willing to ask the other lawyer to withdraw. The court found there was nothing to indicate that R could not represent C effectively. Not all conflicts call the integrity of the judicial system into question. Sometimes the conflict will involve only private interests, as in this case.
Cote v. Rancourt, 2004 SCC 58

The petitioner was a defendant in several actions. G was his lawyer in these actions and he acquired confidential information about the petitioner.  G then joined the firm (SV), which represented the plaintiffs in actions against the petitioners. G had attended one meeting to prepare the petitioner for discovery after receiving an offer to join SV, but before accepting the offer. Upon joining SV, steps were taken to implement firewall procedures, but it was not fully in place until two or three weeks after G joined the firm. In the meantime, his work did not involve files in which he had a potential conflict. The court dismissed an application to prevent the firm from acting. While a delay in instituting a firewall is fatal in some cases, in this case the “proactive diligence” that SV took was reasonable. There was not complete conformity with Law Society guidelines, but there was sufficient compliance in spirit such that a knowledgeable and reasonable client, witnessing the effect of the good faith effort to protect against disclosure, would conclude that no unauthorized disclosure of confidential information had or was likely to occur in respect of G’s transfer to the firm.
Robertson v. Slater Vecchio 2007 BCSC 987



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Chapter 6 out of 14 chapters in the annotated Professional Conduct Handbook