Originally published in Blakes Bulletin on Litigation
& Dispute Resolution, September 2011
A recent decision by the Chief Justice of the Alberta Court of
Queen's Bench deals with a unique circumstance involving
conflict issues arising in circumstances where, after a lawyer
moves to a new firm, the new firm is retained by a party to the
litigation, while the lawyer's former firm remains retained by
the opposite party.
Dow Chemical Canada Inc. and Dow Europe GmbH (Dow) are
plaintiffs in an action against Nova Chemicals Corporation
Nova retained Osler and McLeod Dixon as co-counsel. Dow retained
Burnet, Duckworth & Palmer LLP initially and then sought to
retain Bennett Jones as co-counsel. Andrew Little, then a partner
at Osler in Calgary, was responsible for representing Nova's
interests in the action and the evidence indicated that he was
involved in the formative strategic stages of the lawsuit. Mr.
Little left Osler to join Bennett Jones in Toronto. Nova complained
of a conflict and introduced evidence that it did not "expect
a lawyer who was involved to prosecute the dispute on its behalf to
join our enemy's law firm."
Bennett Jones sought a declaration that it was able to act on
behalf of Dow, notwithstanding that Mr. Little had joined its
In analyzing the issue, the Chief Justice noted that while codes
of professional conduct or guidelines are helpful, useful and may
be persuasive in a proper case, they were not determinative of
whether a conflict exists in a particular case. Instead, the issues
must be determined by the court. The ultimate question is whether
the public, represented by reasonably informed persons, would be
satisfied that no use of confidential information would occur.
Bennett Jones pointed to the fact that although it did represent
Nova in an immigration matter, Nova had agreed to allow it to act
adverse to Nova and its affiliates in matters unrelated to that and
other existing mandates. Nova tendered evidence that the consent
previously provided in that regard was never intended to extend to
the present situation because it would be unable and unwilling to
accept any risk of Mr. Little inadvertently leaking Nova's
confidential information to members of Bennett Jones who would be
representing Dow. The court recognized that such a generic consent
is not contrary to any principle of public policy; however, it
suggested that, in certain circumstances, a conflict could be so
pronounced that even prior consent could not save a retainer.
The court held that Nova's purported consent did not qualify
as the type of generic agreement sufficient to allow Bennett Jones
to act without more. In addition, the court held that the specific
retainer contemplated was never within the contemplation of the
parties when the immigration retainer letter was agreed, and that
the waiver was never intended to apply to the present situation in
terms of consent.
The court ultimately reviewed the facts of the case and found
that Mr. Little, as conceded by both parties, was in possession of
confidential information which, if disclosed to Bennett Jones,
would be prejudicial to Nova. It found that Bennett Jones had a
detailed and thorough Conflicts Policy and that Mr. Little signed
an undertaking before he became a partner at Bennett Jones swearing
that he had not discussed the relevant Nova retainer with anyone
since his arrival there, nor would he in the future. The court held
that was not enough in that the public perceives any similar sworn
statement of moving lawyers as nothing more than a "trust
me" statement which was not, by itself, sufficient. The court
held that screening devices are also necessary, absent consent of
the other opposing party.
The court also considered the additional safeguards which were
implemented by Bennett Jones which included: all members of its
team signing undertakings not to disclose information; electronic
documents being accessible only to those working on the file; and
the implementation of an ethical wall. In light of those safeguards
and the circumstances of the case – including the fact
that Mr. Little practised in Toronto – the court
ultimately found that no conflict existed.
This case emphasizes the importance and necessity of
establishing ethical walls and other safeguards to protect
confidentiality to avoid potential conflicts of interest.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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