Sunday, October 17, 2010

Canadian Decision: Disqualification Denied -- Lawyer Changing Firms, No Imputation, Ethical Screen

Hat tip to Bill Freivogel for pointing out a recent decision by the Ontario Superior Court of Justice: Basque v. Stranges, 2010 ONSC 5605 (Ont. Super. Ct. Oct. 12, 2010). A lawyer left a firm who represented a client he eventually found himself defending another party against. As Freivogel summarizes: "The court noted that there was no showing that Lawyer had any knowledge whatsoever about the plaintiff or her case."

In its analysis, the court relied heavily on the Canadian Supreme Court decision on conflicts, disqualification and ethical screening, MacDonald Estate v. Martin. The judge noted the no sharing of confidential information could be demonstrated or could otherwise likely be assumed. And found that even if the lawyer in question had in fact been exposed to confidential information, the firm's procedures for confidentiality were sufficient.
  • [46] In my opinion, Graham’s relationship with Chown Cairns during the period... was not sufficiently connected to his retainer by The Dominion of Canada General Insurance Company one year later so as to raise the inference that confidential information was imparted. During the overlap period, there would have been no reason for confidential information regarding the plaintiff’s case to have been divulged to, or obtained by, Graham. Graham had no involvement in the plaintiff’s case (or knowledge of its existence) during the overlap period and this is wholly consistent with his role at Chown Cairns during that time. And, furthermore, there is no evidence of confidential information having been imparted to Graham during the overlap period.
For one, it could not be demonstrated that the lawyer had any exposure to the plaintiff or the lawyers at his previous firm who were representing the plaintiff prior to his departure. The lawyer left the firm 35 days after the plaintiff first consulted the firm.

Secondly, in this case the plaintiff, who changed counsel during the course of the matter, argued that the confidentiality practices of her first law firm, which internally screening its own lawyers in some instances, were insufficient to prevent the imputation of knowledge to a lawyer not working on the case.

The judge disagreed: "This protocol, while not elaborate, was in place for many years and appears to have been effective (although the relevant question to be asked is whether it was effective in the circumstances of this case)." Because the original firm was small, the judge excused the lack of written policies, geographic separation or other more rigorous screening measures. Instead, he concluded that if a party were determined to explicitly seek out restricted confidential information, he would have been able to do so -- but that nothing in this case suggested the lawyer at hand had acted in this inappropriate manner, which was the applicable standard in this situation.

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