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Representation - Lawyers - Duty of Loyalty to Client

. R. v. Gregson

In R. v. Gregson (Ont CA, 2021) the Court of Appeal considered the lawyer's duty of loyalty to a client:

[22] The duty of loyalty owed by a lawyer to their client is undoubtedly a foundational principle in the adversarial system. As explained in R. v. Neil, 2002 SCC 70, [2002] 3 S.C.R. 631, at para. 12, “[u]nless a litigant is assured of the undivided loyalty of the lawyer, neither the public nor the litigant will have confidence that the legal system, which may appear to them to be a hostile and hideously complicated environment, is a reliable and trustworthy means of resolving their disputes and controversies.” The principle of the duty of loyalty endures because it is essential to the integrity of the administration of justice: at para. 12. It consists of several dimensions, including a duty not to disclose confidential information, a duty to avoid conflicting interests, a duty of commitment to the client’s cause or zealous representation, and a duty of candour with the client on matters relevant to the retainer: at paras. 18-19.

[23] That said, the duty is not unlimited. Lord Reid’s remarks in Rondel v. Worsley, [1969] 1 A.C. 191 (U.K. H.L.), at pp. 227-28, accepted by this court in R. v. Samra (1998), 1998 CanLII 7174 (ON CA), 129 C.C.C. (3d) 144 (C.A.), at para. 64, illustrate this point:

Every counsel has a duty to his client fearlessly to raise every issue, advance every argument, and ask every question, however distasteful, which he thinks will help his client's case. But, as an officer of the court concerned in the administration of justice, he has an overriding duty to the court, to the standards of his profession, and to the public, which may and often does lead to a conflict with his client's wishes or with what the client thinks are his personal interests. Counsel must not mislead the court, he must not lend himself to casting aspersions on the other party or witnesses for which there is no sufficient basis in the information in his possession, he must not withhold authorities or documents which may tell against his clients but which the law or the standards of his profession require him to produce. And by so acting he may well incur the displeasure or worse of his client so that if the case is lost, his client would or might seek legal redress if that were open to him. [Emphasis added.]

[24] Allan C. Hutchinson, in his textbook Legal Ethics and Professional Responsibility, 2nd ed. (Toronto: Irwin Law, 2006), at pp. 106-7, similarly explains that there are limits to lawyers’ obligations to place their clients’ interests ahead of all others. One of the primary constraints is a lawyer’s duty to the courts.

[25] It is also useful to remember that the concepts of ineffective assistance and disloyalty cannot be conflated. A breach of the duty of loyalty does not occur whenever a client’s interests are damaged by a lawyer’s actions. A lawyer acting with intent to further a client’s interests sometimes can, by incompetence, damage those interests. Such a lawyer has not breached the duty of loyalty. Otherwise, every incompetent act would be an act of disloyalty.

[26] The existing test for whether there has been a breach of loyalty owed by a lawyer to their client, when raised for the first time on appeal, may be stated as follows. First, there must have been an actual conflict of interest between the respective interests represented by counsel and, second, as a result of that conflict, there must have been some impairment of counsel’s ability to represent the interests of the appellant: R. v. W.(W.) (1995), 1995 CanLII 3505 (ON CA), 100 C.C.C. (3d) 225 (Ont. C.A.), at p. 237; Neil, at para. 39; and R. v. Silvini (1991), 1991 CanLII 2703 (ON CA), 68 C.C.C. (3d) 251 (Ont. C.A.), at pp. 258-59.

[27] As the Supreme Court accepted in Neil, a conflict is a “substantial risk that the lawyer's representation of the client would be materially and adversely affected by the lawyer's own interests or by the lawyer's duties to another current client, a former client, or a third person”: at para. 31. Where the allegation of a conflict of interest is raised for the first time on appeal, the court must be concerned with actual conflicts of interest, not just potential or possible conflicts, and whether counsel’s representation was in fact compromised in such a way as to result in a miscarriage of justice: W.(W.), at pp. 238-39.

[28] This court noted in Samra that the problem of conflict of interest has usually arisen because counsel has been retained to act for a client opposed in interest to the former client: at para. 19. In the context of joint representation of co-accused, an actual conflict exists when a course of conduct dictated by the best interest of one accused would, if followed, be inconsistent with the best interests of the co-accused: W.(W.), at p. 239.

[29] In Samra, the appellant alleged that a miscarriage of justice had occurred when the appointed amicus, who had formerly been the appellant’s defence counsel for the same matter, had disclosed confidential information when he clarified something the appellant’s new counsel had said. This court noted that this was the only time an actual conflict of interest might have arisen and where possibly confidential information was disclosed, but even so, there was no adverse effect on the appellant’s defence as a result of that conflict. As such, while it was not necessary to decide whether an actual conflict existed, this court doubted, at para. 63, that there was a conflict:

It is not unusual that counsel may find themselves in a conflict between their duty to the client and their duty to the court. It has never been suggested that when such a conflict arises counsel is always disqualified from continuing to act in the case.

[30] If the two-part test is satisfied, the court may order a new trial: Neil, at para. 40.

. 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.