Ethics Committee Seeks Comment on Draft Conflicts Rules 2.04(1) to 2.04(4)
BC Code of Professional Conduct – Consultation on new version of some conflicts rules
The Ethics Committee is seeking the views of British Columbia lawyers on a new version of some of the conflicts rules developed for the Federation of Law Societies Model Code and the adaptation of those rules for British Columbia the Committee is considering recommending to the Benchers.
The Federation of Law Societies established the Standing Committee on the Model Code in September 2010 with a mandate to monitor developments in the law of professional responsibility, consider feedback from law societies as they implement the Model Code, and make recommendations for amendments to the Model Code as necessary. In March 2011 the Standing Committee was asked to review the conflicts section of the Model Code and recommend an appropriate rule for inclusion in the Code. BC Law Society President and Ethics Committee member, Gavin Hume, Q.C., is the current Chair of the Standing Committee. The current draft of the Model Code for British Columbia is known as “the BC Code.”
The Standing Committee has now proposed to the Federation, and the Federation has adopted, a small number of revisions to the Model Code conflict rules that includes a revision to the definition of a conflict of interest and the crafting of a general conflicts rule that encompasses all situations, including those involving conflicts of interest between current clients. Subject to consultation with the profession, it is those changes the Ethics Committee is considering recommending to the Benchers.
The changes recommended to the Federation by the Standing Committee, an analysis of those changes by Professor Brent Cotter of the Law Faculty of the University of Saskatchewan, and comments by the Canadian Bar Association on the conflicts issues are set out at the Federation of Law Societies website at http://www.flsc.ca/en/federation-news/.
See the conflicts portion of the current proposed version of the BC Code (PDF). It is Subrules 2.04(1) to Subrule 2.04(4) on which the Ethics Committee is inviting comment, although a complete version of the conflicts portion of the draft BC Code, including rules subsequent to Subrule 2.04(4), is included for information. Issues raised by BC Code provisions subsequent to Subrule 2.04(4) were the subject of an earlier consultation.
Significant changes included in new Subrules 2.04(1) to 2.04(4)
Some significant changes included in the new Subrules 2.04(1) to 2.04(4) are the following:
- Subrule 2.04(1) contains a general prohibition on acting where there is a conflict of interest. The Commentary following the general prohibition makes it clear that the rule applies to all conflicts situations, including those involving conflicts of interest between current clients, and also includes specific references to the Neil and Strother cases. No specific rule relating to lawyers acting against current clients is now required, although a rule dealing with acting against a former client is preserved.
- Provisions dealing with consent in advance and implied consent to act against a current client have been revised and moved to the Commentary following Subrule 2.04(2).
- Subrule 2.04(4) preserves the Federation Model Code provision that permits a firm to act for more than one client with competing interests in some limited circumstances, including circumstances where there is no dispute between the clients, the clients consent and the matters are screened.
- The Standing Committee notes in its report to the Federation: “The definition of conflict of interest included in the Definitions section that opens the Model Code, and referred to in the commentary to rule 2.04 (1), has been amended to make specific reference to the duty of loyalty. The revised definition reflects the opinion of the members of the Standing Committee that the duties that flow from the lawyer client relationship require that both conduct that would have an adverse impact on the representation of the client and conduct that might impair the relationship between a lawyer and the client be prohibited. The commentary to rule 2.04(1) (the general prohibition on acting in situations of conflict of interest) also highlights the importance of the duty of loyalty.”
- The Standing Committee notes in its report to the Federation: “The general rule prohibiting a lawyer from acting where there is a conflict of interest is followed by an exception permitting a lawyer to act where there is express or implied consent from all clients and the lawyer reasonably believes that he or she is able to represent each client without there being any material adverse effect upon either the representation of or the loyalty to the clients. The draft rule on consent and the commentary that follows it contain important clarifications on the use of implied consent and consent obtained in advance in order to provide reasonable, principled relief from the strict prohibition. The ability to obtain consent in advance and, in certain circumstances, to infer consent would permit a lawyer to act in situations otherwise proscribed by the general prohibition on acting when there is a conflict of interest.”
Current Status of Ethics Committee Consideration of the Model Code
The Ethics Committee invited comments on the non-conflicts portion of the BC Code from October to December 31, 2010. The Committee made numerous changes to the Code based on submissions made by members of the profession and the Benchers adopted a version of the non-conflicts portion of the Code on April 14, 2011, to be implemented at a date to be set. Download the non-conflicts portion of the BC Code (PDF).
The Ethics Committee invited comments on the conflicts portion of the BC Code during June, July and August 2011, and expects to recommend to the Benchers a number of changes to the Code based on that consultation. Because of the changes now contemplated to the conflicts portion of the BC Code, and set out in Subrules 2.04(1) to 2.04(4), the Committee wants to hear the views of the profession on those Subrules before making further recommendations to the Benchers.
When the Benchers are satisfied with the conflicts portion of the BC Code, they will set an effective date for both the non-conflicts and conflicts portions of the Code to come into effect, replacing our current Professional Conduct Handbook.
Contact the Ethics Committee
Lawyers who wish to make comments on Subrules 2.04(1) to 2.04(4) of the BC Code are requested to do so by letter or email by January 16, 2012 by contacting:
Staff Lawyer – Ethics
Law Society of BC
845 Cambie Street
Vancouver, BC V6B 4Z9
Tel. direct: 604.443.5711
Toll-free from in BC: 1.800.903.5300
The final decision about whether to adopt a version of the Model Code for British Columbia will be made by the Benchers.