Ethics Committee seeks input on conflicts rules

The Ethics Committee invites the profession to suggest improvements to the Martin v. Gray rules governing conflicts that arise when a lawyer changes firms.

In 1995, the Law Society adopted Chapter 6, Rules 7.1 to 7.9 of the Professional Conduct Handbook to permit law firms, in some circumstances, to continue to act for existing clients when a lawyer who previously worked for opposing counsel joins the firm.

The rules permit firms to design screening mechanisms to ensure no confidential information of any party is improperly disclosed to the transferring lawyer’s old or new firm. A checklist of factors to be considered when setting up a screen is set out in Appendix 5 of the Handbook. The rules were drafted from model rules prepared by the Federation of Law Societies following the decision of the Supreme Court of Canada in MacDonald Estate v. Martin (Martin v. Gray) (1990) 77 DLR (4th) 249.

During the past 11 years, the Ethics Committee has given a number of opinions to lawyers concerning their compliance with the rules, including whether screening measures are sufficient to permit the firm to continue to act when a lawyer transfers from an opposing party’s law firm. Based on this experience, the Ethics Committee is now considering whether the rules can be improved and invites the profession's suggestions.

Some changes that have already been suggested:

1. Eliminate the requirements of Rule 7.4(b)(i)(D) and 7.4(b)(i)(E). Typically, suitable alternative counsel will be available and their availability or lack of availability is unlikely to be determinative of the issues raised. Issues affecting the national or public interest will almost never arise and it is better not to refer to them.

2. Modify guideline 5 of Appendix 5 to eliminate the requirement that the files be physically segregated from the files of the new firm’s regular filing system. The incoming lawyer has a duty of confidentiality to both the former client and the current client of the new firm and the requirements of the rule ought to take account of those obligations. While steps need to be taken to ensure that the incoming lawyer does not access any files improperly, those steps may not require that the files be physically segregated.

3. Eliminate the need to physically segregate computer files in guideline 5, and substitute a requirement to segregate them electronically instead.

4. Eliminate the Rule 7.4 requirement that the new law firm must “establish” that it has taken reasonable measures to protect the former client’s confidential information. While it would be reasonable to continue to require a firm to justify the measures it has taken to protect the former client’s information if called upon to do so, it is not necessary that the new firm establish that it has taken reasonable measures unless the adequacy of those measures is challenged.

5. Eliminate the requirement in Rule 7.4(b)(i) that the new law firm establish that it is in the interests of justice that its representation of its client continue. Where a client would have to forgo its counsel of choice because of a conflict caused when an incoming lawyer to the firm has confidential information of a party adverse in interest to the new firm’s client, it should be presumed that it is in the interests of justice to permit that client to continue to retain its counsel of choice.

6. Clarify the use of the words “should” and “must” in Rules 7.5(a) and 7.5(b). Rule 7.5(a) states that where a lawyer possesses relevant information that is not also confidential the lawyer “should” execute an affidavit to that effect. Rule 7.5(b) states that the law firm “must” deliver a copy of the affidavit to affected persons. It might be preferable to state that a lawyer covered by (a) must execute an affidavit. Alternatively, it may be that a lawyer who has relevant information that is not confidential ought not to be required to take any steps at all in relation to that information.

Lawyers are invited to suggest any improvements in these rules or comment on suggestions already made by contacting Jack Olsen, Staff Lawyer – Ethics, at Tel. 604 443-5711, Fax 604 646-5902 or email: