Acting for more than one party on a related matter may be possible in some circumstances with the use of screens

Benchers approve broader use of screens to overcome imputed conflicts

The Benchers have decided in principle to permit firms to use screens to overcome imputed conflicts in some circumstances. The Benchers will consider draft changes to the Professional Conduct Handbook to give effect to the decision later in the year.

The decision is to permit firms to act against current clients in related matters where confidential information is in issue, provided the information is screened and the affected clients consent. Firms will also be permitted to act against former clients on related matters without client consent if the firms can establish that they can meet criteria similar to those that govern the representation of clients when lawyers transfer from one firm to another. Those situations are currently addressed in Chapter 6, Rule 7.4 of the Professional Conduct Handbook and, among other requirements, stipulate that a firm must establish that the representation is in the interests of justice and that confidential information is appropriately screened.

The changes will not, however, permit a client to consent to the use of screens to enable a law firm to act on both sides of the same matter or to consent to the same lawyer acting for and against the client in any matter.

The changes with respect to current clients will permit lawyers to meet the requirements of Chapter 6, Rule 6.3(b) of the Handbook through the use of screens. Clients will still be required to consent to the representation under Rule 6.3(a) and will also have to consent to the screening arrangements. The changes with respect to former clients will permit lawyers to fulfil the requirements of Rule 7(b) through the use of screens, if the lawyer can meet the same standard as exists when lawyers transfer from one firm to another, as currently set out in Rule 7.4.

These Rule changes will allow clients a wider choice of counsel by mitigating the general rule on imputed conflicts. That rule, both from a professional responsibility and legal standpoint, is that the conflicts of one lawyer are to be treated as conflicts for every member of that lawyer's firm. As noted in Lawyers and Ethics by Gavin MacKenzie, "Lawyers who practise together are permitted to share confidential information, and may have ready access to one another's files. They are bound together also by the ties of finance, friendship and loyalty."

The imputation rule and the possibility that lawyers may, in some circumstances, be able to use screens to overcome it has been considered in a number of cases, most notably by the Supreme Court of Canada in MacDonald Estate v. Martin (1990) 3 SCR 1235 (Martin v. Gray). In that case the Court considered whether a disqualifying conflict existed when a lawyer changed firms and possessed confidential information that, if used by the new firm, could damage the interests of a client of the lawyer's former firm. It was held that a court should draw the inference that lawyers who work together share confidences, unless satisfied on the basis of clear and convincing evidence that all reasonable measures have been taken to ensure that no disclosure will occur by the "tainted lawyer" to the member or members for the firm who are engaged against the former client - such as through appropriate screening devices in the firm. Law societies across Canada subsequently implemented rules designed to permit a law firm to continue to act for a client despite the fact that a lawyer joining the firm has confidential information about the client on the other side of the case - by taking steps to ensure the lawyer joining the firm does not disclose confidential information about the case. Those rules are set out as Chapter 6, Rules 7.1 to 7.9 and Appendix 5 of the Professional Conduct Handbook.

The question has since arisen: should similar rules be adopted to cover situations other than those in which lawyers are transferring firms? Several courts have recently considered the scope of imputed conflicts. The law society in Ontario now allows law firms to act against former clients, if there is client consent or if the firm can meet certain standards (similar to those set out in Chapter 6, Rule 7.4 of BC's Professional Conduct Handbook).

Lawyers who would like further information on these changes should contact Jack Olsen, Staff Lawyer - Ethics, at:

Law Society of British Columbia
845 Cambie Street
Vancouver, BC V6B 4Z9
Tel.: 604 443-5711
Fax: 604 646-5902
Email: jolsen@lsbc.org