Although a recent Ontario Court of Appeal decision reaffirms the
existence of absolute privilege, it also holds that the privilege
does not necessarily prevent an aggrieved party from suing their
lawyer for conduct while representing another client, says
Brian Radnoff in an interview about the recent decision of the
Ontario Court of Appeal in Amato v. Welsh.
The Court of Appeal considered whether it is "plain and
obvious" that absolute privilege can prevent a claim against a
lawyer for alleged breaches of fiduciary duty and the duty of
loyalty based on statements made or omitted while the lawyer was
representing a different client.
This important decision, says Radnoff, a partner with Lerners
LLP, involves an unusual factual situation which gives rise to the
underlying legal question.
"Alleged Ponzi scheme operators faced an OSC investigation.
While this was going on, the operators urged the plaintiffs,
investors in the scheme, to retain their lawyers to get an opinion
on whether the Ponzi scheme complied with securities laws. By
taking on the plaintiffs' retainer, the lawyers put themselves
in a very difficult situation, owing fiduciary duties and duties of
loyalty to both the operators and the plaintiffs, who were
investors and therefore victims of the Ponzi scheme," he
The issue, he explains, was whether, in the subsequent action by
the plaintiffs against the lawyers, the plaintiffs could include
allegations in their claim that the lawyers had failed to provide
accurate information or stop the provision of inaccurate
information to the OSC when the operators were being examined.
"There is no doubt the plaintiffs could sue their lawyer
for conduct in the plaintiffs' retainer, and that absolute
privilege would not apply. Here, the plaintiffs claimed that their
lawyers breached their duties to the plaintiffs in their
representation of another client. It is not immediately apparent,
as the court found, that absolute privilege prevents such a claim
and there is no case that stands for this proposition," he
In Irwin v. Alberta Veterinary Medical Association, 2015 ABCA 396, the Alberta Court of Appeal found that the "ABVMA" failed to afford procedural fairness to a veterinarian undergoing an incapacity assessment.
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