Supreme Court modifies conflicts of interest rules for lawyers

July 15, 2013

[Source: Legal Post]

The Supreme Court of Canada today clarified the rules under which lawyers may act against existing clients.

“The result is a great one for advocates of choice, because the court ruled that clients were free to choose their lawyers and lawyers were free to act for them unless there was a real risk of mischief,” says Malcolm Mercer of McCarthy Tétrault LLP, who represented the Canadian Bar Association.

The decision, Canadian National Railway v. McKercher LLP, affects a wide range of clients — from large companies who must rely on the limited number of major firms in Canada’s legal market for representation in significant transactions and litigation, to consumers from rural and remote areas that are served by only a few lawyers. It is also a blow to those who advocated a bright line rule forbidding lawyers from acting against current clients or former clients without first obtaining their consent. Indeed, the court ruled that even lawyers who breach conflicts of interest rules by acting against existing clients without obtaining consent to do so may still avoid disqualification from continuing as counsel in the proceedings.

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