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THE LATEST WORD

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Lawyers

1. General
2. Lawyer Has Authority to Bind Client
3. Duty of Loyalty to Client
4. Duty to Advise
5. Duty to Court
6. Assessment of Lawyer's Bills

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1. General

This is the law of lawyers. It is primarily governed by the Law Society Act and its Regulations, but also by the Rules of Professional Conduct and the Law Society By-Laws.

2. Lawyer Has Authority to Bind Client

. Dick v McKinnon

In Dick v McKinnon (Ont CA, 2014) the court confirms that a lawyer has the implied authority to bind a client as follows:
[4] This court has observed that it is well-established law that “a solicitor of record has the ostensible authority to bind his or her clients and that opposing counsel are entitled to rely upon that authority in the absence of some indication to the contrary”: Oliveira v. Tarjay Investments Inc., reflex, [2006] O.J. No. 1109, at para. 2 (C.A.), referring to Scherer v. Paletta, 1966 CanLII 286 (ON CA), [1966] 2 O.R. 524 (C.A.) and Mohammed v. York Fire and Casualty Insurance Co., 2006 CanLII 3954 (ON CA), [2006] O.J. No. 547, at para. 20 (C.A.).

3. Duty of Loyalty to Client

. R v Baharloo

In R. v. Baharloo (Ont CA, 2017) the Court of Appeal discusses a lawyer's duty of loyalty to their client, and when conflicts of interest arise with respect to that duty:
[31] A lawyer’s duty of loyalty to a client includes a duty to avoid conflicting interests. One type of prejudice from which the law of conflict of interest seeks to protect a client is the “prejudice arising where the lawyer ‘soft peddles’ his representation of a client in order to serve his own interests, those of another client, or those of a third person”: Canadian National Railway Co. v. McKercher LLP, 2013 SCC 39 (CanLII), [2013] S.C.R. 649 (“CNR”), at para. 23.

[32] As regards a current client, a lawyer must not place herself in a situation that jeopardizes her effective on-going representation of the client: CNR, at para. 23. That is because “[t]here should be no room for doubt about counsel’s loyalty and dedication to the client’s case”: R. v. McCallen (1999), 1999 CanLII 3685 (ON CA), 43 O.R. (3d) 56 (C.A.), at p. 67. As well, “[w]hen a client employs an attorney, he has a right to presume, if the latter be silent on the point, that he has no engagements, which interfere, in any degree, with his exclusive devotion to the cause confided to him”: Williams v. Reed, 29 F. Cas. 1386 (Cir. Ct., D. Maine 1824), quoted with approval in Strother v. 3464920 Canada Inc., 2007 SCC 24 (CanLII), [2007] S.C.R. 177, at para. 55.

[33] Although the relentless financial pressure of the business of law may tempt some lawyers to accept or hang onto mandates that impinge on their duty of loyalty to an existing client, the law is clear: “Loyalty includes putting the client’s business ahead of the lawyer’s business”: R. v. Neil, 2002 SCC 70 (CanLII), [2002] 3 S.C.R. 631, at para. 24.

[34] The case law sets out a two-step analysis to determine whether a lawyer’s acceptance of a retainer would conflict with her duty of loyalty to a current client. The first step involves ascertaining whether the “bright line” rule articulated by the Supreme Court in Neil, at para. 29, applies. That rule states:
[A] lawyer may not represent one client whose interests are directly adverse to the immediate interests of another current client — even if the two mandates are unrelated — unless both clients consent after receiving full disclosure (and preferably independent legal advice), and the lawyer reasonably believes that he or she is able to represent each client without adversely affecting the other. [Emphasis in original.]
[35] The “bright line” rule applies only where the immediate, legal interests of clients are directly adverse in the matters on which the lawyer is acting: CNR, at paras. 33 and 35.

[36] Where the “bright line” rule does not apply, the second step of the analysis considers the more contextual substantial risk principle formulated in CNR, at para. 38:
When a situation falls outside the scope of the bright line rule for any of the reasons discussed above, the question becomes whether the concurrent representation of clients creates a substantial risk that the lawyer’s representation of the client would be materially and adversely affected. The determination of whether there exists a conflict becomes more contextual, and looks to whether the situation is “liable to create conflicting pressures on judgment” as a result of “the presence of factors which may reasonably be perceived as affecting judgment”.
. Salomon v. Matte‑Thompson

In Salomon v. Matte‑Thompson (SCC, 2019) the Supreme Court of Canada explained the necessity of a lawyer to avoid a conflict of interest as an aspect of the duty of loyalty:
[71] As mandataries, lawyers have a duty to avoid placing themselves in situations in which their personal interests are in conflict with those of their clients (art. 2138 para. 2 C.C.Q.). The duty to avoid conflicts of interest is a salient aspect of the duty of loyalty they owe to their clients (Canadian National Railway Co. v. McKercher LLP, 2013 SCC 39 (CanLII), [2013] 2 S.C.R. 649, at para. 19, citing R. v. Neil, 2002 SCC 70 (CanLII), [2002] 3 S.C.R. 631, at para. 19; see also C.A. reasons, at para. 94). In conjunction with the duty of commitment to the client’s cause, the duty to avoid conflicting interests ensures that “divided loyalt[ies] d[o] not cause the lawyer to ‘soft peddle’ his or her representation of a client out of concern for [other interests]” (McKercher, at para. 43, quoting Neil, at para. 19). In the same manner, the duty of loyalty shields the performance of the lawyer’s duty to advise clients from the taint of undue interference.

4. Duty to Advise

. Salomon v. Matte‑Thompson

In Salomon v. Matte‑Thompson (Ont CA, 2019) the Supreme Court of Canada explained the duty to advise in these terms:
[52] A lawyer’s duty to advise is threefold, encompassing duties (1) to inform, (2) to explain, and (3) to advise in the strict sense. The duty to inform pertains to the disclosure of relevant facts; the duty to explain requires that the legal and economic consequences of a course of action be presented; and the duty to advise in the strict sense requires that a course of action be recommended (Poulin v. Pilon, [1984] C.S. 177, at p. 180; M.-C. Thouin, “L’avocat, toujours de bon conseil?”, in Service de la formation permanente du Barreau du Québec, vol. 228, Développements récents en déontologie, droit professionnel et disciplinaire (2005), 49, at pp. 51-52).

[53] The duty to advise is inherent in the legal profession and exists regardless of the nature of the mandate (Baudouin, Deslauriers and Moore, at No. 2-138; Labrie v. Tremblay, [2000] R.R.A. 5, at p. 10 (Que. C.A.)). Its exact scope depends on the circumstances, including the object of the mandate, the client’s characteristics and the expertise the lawyer claims to have in the field in question (Côté v. Rancourt, 2004 SCC 58 (CanLII), [2004] 3 S.C.R. 248, at para. 6; Thouin, at pp. 55-69).

[54] As no bright lines can be drawn in this regard, the case law is replete with examples of situations in which courts have had to perform the difficult task of deciding whether lawyers should, in advising their clients, have taken the initiative to go beyond what the clients specifically asked them for (see, e.g., Labrie, at p. 11; Sylvestre v. Karpinski, 2011 QCCA 2161, at para. 19 (CanLII); Daigneault v. Lapierre, [2003] R.R.A. 902 (Que. Sup. Ct.)). One thing is clear, however: when lawyers do provide advice, they must always act in their clients’ best interests and meet the standard of the competent, prudent and diligent lawyer in the same circumstances. In this respect, I agree with the Court of Appeal that any advice lawyers give that exceeds their mandates may, if wrongful, engage their liability. Whether Mr. Salomon was acting within the limits of his mandate in providing financial advice to the respondents is therefore immaterial. He is liable for any wrongful advice he gave in that context.

5. Duty to Court

. Healthy Lifestyle Medical Group Inc. v. Chand Morningside Plaza Inc.

In Healthy Lifestyle Medical Group Inc. v. Chand Morningside Plaza Inc. (Ont CA, 2019) the Court of Appeal explained a lawyer's duty to the court as follows:
[8] While this is sufficient to dispose of the award of costs, we feel compelled to address an issue that arose in the cost submissions.

[9] Mr. Rosenstein took this position in his costs factum:
There is no legal obligation on an opposing party, much less opposing counsel, to review the entire record below to determine whether, and if so what, has been omitted by the appellant from its appeal materials.
Further, assuming that the opposing party does at some later point realize that any portion of the record below has been omitted by the appellant, there is no basis upon which to require that the respondent has an affirmative obligation to supplement the record in a manner which assists the appellant.

[10] We reject this excessively adversarial position. In our view the issue here is not about requiring one party to assist the other, it is about counsel ensuring that the pleadings before the lower court which are germane to the issue on appeal are accurately put before this court.

[11] The Rules of Civil Procedure, R.R.O. 1990, Reg. 194, oblige the parties and their counsel to ensure that the court has before it all of the material necessary for the court to do justice. This is the intended result of the combined operation of r. 61.10 prescribing the appeal book and compendium, r. 61.12 (7) prescribing the respondent’s compendium, and r. 61.10.1 prescribing the exhibit book.

[12] Rule 61.10 (1) (f) obliges the appellant to include the relevant pleadings in the appeal book and compendium. No correlative duty is placed on the respondent. There is therefore a wisp of technical support for Mr. Rosenstein’s assertion, although not more than a wisp. When, for whatever reason, the appellant omits from its materials a pleading central to the decision below and the appeal, a respondent should correct this and not make arguments on the basis that the record before the lower court was different than it actually was. And when an appellant learns that its materials omitted such a pleading it should seek leave to correct the record and revise its materials, not persist in the original error. To view the matter otherwise would be to adopt an unduly technical view of the duty of counsel.

[13] These rules instantiate the foundational “philosophical mandate” of the Rules, which is found in r. 1.04 (1):
These rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.
[14] The Manitoba Court of Appeal rightly held: “[C]ompliance with the Rules is desirable not as a pedantic exercise, but as a means of properly informing the Court of the relevant facts, of directing the Court’s attention to the evidence relied upon and of defining the issues to be argued”: Kingswood Estates Inc. v. Hildebrand, [1995] M.J. No. 645 (C.A.), at para. 6.

[15] Even though ours is an adversarial system, its goal is to pursue truth in the interests of justice, in order to achieve the right result in the dispute for the right reason, according to law. There are many examples of ways in which rules and practices necessarily mitigate the adversarial nature of our system of justice[1].

[16] There is no doubt that had this appeal proceeded on the basis that the the motion judge did not have before her the Amended Statement of Defence, which was the basis put forward by both the appellant and the respondent until the intervenors set the record straight, and not revised by the appellant until during oral argument, this court would have been tacitly misled on what the motion judge had before her and on the proper interpretation of her decision. This cannot be countenanced.

[17] A party to an appeal, led by counsel, has the obligation to provide to the court any material necessary for the court to have a full appreciation of the matter under appeal, whether or not the material supports the party’s position. In this appeal neither counsel took this obligation seriously enough after becoming aware that the Amended Statement of Defence had been omitted from their respective appeal materials.

6. Assessment of Lawyer's Bills

. Ghaeinizadeh v. Bennett Jones LLP

In Ghaeinizadeh v. Bennett Jones LLP (Ont CA, 2014) the court allowed an assessment of a solicitor's litigation account despite the fact that the client has earlier advanced the same account in adversarial cost submissions at trial. The primary basis of this finding was that the purpose of cost submissions at trial and account assessment were distinct:
Given the different objectives and considerations arising in the two contexts of party and party costs and solicitor account assessments, parties availing themselves of both are not pursuing inconsistent options.
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