Thursday, May 8, 2014

On Defining Clients and the Duty of Loyalty

Two interesting articles to share. First, from the University of Calgary comes an excellent and detailed write up from law professor Alice Woolley, providing the facts, analysis and opinion tied to a recent Canadian decision: "Defining the 'Client' (or not) in Former Client Conflicts"--
  • "…knowing whether a client is a former or a current client, whether the matters are the same, related or unrelated, and whether the clients are represented by the same lawyer or lawyers at the same firm, will direct them to the norms and [conflicts] rules that appropriately govern the situation."
  • "A recent decision by a Master Schulz of the Alberta Court of Queen’s Bench in the case of Orr v. Alook, 2014 ABQB 141, illustrates how this sort of challenge can arise when applying the law of conflicts of interest, and also how to address it satisfactorily.  Her decision demonstrates that it is crucial to get those relationships right, but that the point is to look at them in substance, not formally or technically – to determine what, in actuality, are the relevant relationships."
  • "In addition, it shows that the factual categorization cannot be separated from the legal analysis (even if it necessarily precedes it).  Assessing the various relationships depends on understanding the legal principles governing conflicts of interest well enough to know what you ought to be looking for."
  • "First, the judgment illustrates the point that the law on conflicts of interest protects information that is confidential and not merely information that is privileged."
  • "Second, Master Schulz seems to suggest that once Ms. Kennedy was found to have relevant confidential information that was at risk of disclosure, one ought nonetheless to consider factors that “militate against disqualification” (para 33).  Those factors include protecting a client’s choice of counsel and addressing delay in bringing forward an application."
  • "Finally, Master Schulz suggests that Davis LLP may continue to act if it demonstrates that "'Chinese Walls' have been in existence around these files from the date Ms. Kennedy joined the firm until the present date" (para 42).  She notes affidavit evidence suggesting that Ms. Kennedy’s "aboriginal files were separated behind a 'Chinese Wall'" after Ms. Kennedy joined the Davis firm."
And another hat tip to the Legal Ethics Form for pointing out the provocative: "The Duty of Lawyers to Serve Their Clients’ Interests -- An Economic and Psychological Account"-
  • "In many Codes of Conduct for lawyers around the globe, the duty of the lawyer to serve the interests of his client, and not his own interest, is incorporated."
  • "This paper analyzes this duty from various perspectives. Theoretical Law and Economics literature views the client-lawyer relationship as a principal-agent relationship and predicts that the lawyer may (try to) further his own interests, even at the expense of those of the client... Empirical research subsequently corroborates this view, so that one may conclude that lawyers are also influenced by their self-interest, which is contrary to the norm that they should always act in the best interest of their client."
  • "Psychological and behavioral economics literature in addition casts doubt on whether lawyers are able to act in their client’s best interest, even if they would want to do so. Research concerning personality characteristics of lawyers vis-à-vis clients as well as literature discussing various biases and heuristics plaguing lawyers is discussed."
  • "The paper concludes, on the basis of Law and Economics, empirical, behavioral economic and psychological literature, that there are various reasons to believe that the principle that lawyers should only serve the interest of their client and not their own interests is naive."

No comments:

Post a Comment