 I think it's fair to say we've been looking forward to this event for some time. When Professor Richard Devlin came into my office in July, he said, those of us who have been planning the wick wire or are thinking of shaking it up a bit this year, we're thinking of an engaged panel on a gripping, cutting-edge topic, conflicts of interest. And at the time I thought, you people who think about ethics and professionalism are an odd bunch. It was not long after that, though, that my phone started to ring. This year's committee, the planning for it, has struck a chord. Indeed, there are lawyers and scholars across the country eagerly awaiting the video cast from tonight's lecture to be released. It has taken on a spirit of its own. This event is the lawyer's equivalent of a Justin Bieber concert. I hope I said that right. Actually, it's Bieber, maybe. Welcome to the Schulich School of Law. We're delighted that you're able to be here with us this evening, and we're delighted to be co-hosting this year's FB Wick Wire Memorial Lecture in Professional Responsibility and Legal Ethics with the Nova Scotia Barrister Society. I'm pleased that this lecture, named in honor of Ted Wick Wire, a man who received his LOB here in 1962, is housed at the school. First, the lecture honors a man who worked tirelessly to ensure that lawyers maintained a level of uncompromised professionalism. We're fittingly proud of his contributions to the legal academy, the university, and the profession. You can read more about those contributions on your invitation card. Second, this lecture reflects an ongoing relationship between the school and the Nova Scotia Barrister Society. Speaking for the school, that relationship is one that significantly enhances the richness of our program and people. That informs daily our understanding of law, legal education, and a legal profession. Finally, let me say that I'm proud to have a lecture that focuses on professional responsibility and legal ethics here at the faculty. We house the leading scholars in the country on this substantive topic within our often leaky walls at the school. Our students have had a required course on this topic for years and discussed issues of ethics and professionalism pervasively in their time here at the school. But enough from me. Let me turn the floor over to others, to the panel. Thank you. Good luck. Thank you, Dean Brooks, and welcome everyone. It is so fitting that the topic of today's lecture relates to conflicts of interest when we think back to the work of Ted Wick Wire and the immeasurable contribution that he made to the development of ethics in the legal profession in this province, and in particular with his work on the Nova Scotia legal ethics handbook. It's also so fitting that the topic of conflict of interest is being discussed at this time. I would be hard pressed to think of a topic that has generated more water cooler debate in law firms than the different perspectives being put forward on the issue of conflicts of interest from both the CBA and from the Federation of Law Societies. So we're very much looking forward to having those perspectives brought forward in today's Wick Wire lecture. Now Dean Brooks has set some pretty high expectations for the day with a comparison to the Justin Bieber concert and I am noticing Justice Fischel's hairstyle which does bear some fairly marked similarities to the teenage idol. So let's hope that those expectations can be lived up to this afternoon. We're not going to spend time going through any detailed introductions. There are biographies set out in your programs but we are delighted to have with us this afternoon Professor Paul Payton from the University of the Pacific, McGeorge School of Law Sacramento, California and most recently of course Professor Payton has been chair of the Canadian Bar Association's National Ethics and Professional Responsibility Committee and will be speaking certainly largely although not exclusively on the issue of the CBA's proposal for the conflicts of interest rule. Also with us today we have Kristen Dangerfield from Manitoba and Kristen of course as you'll see in the biography was very much involved in the Martin and Gray case that started much of the discussion around the conflicts of interest rule but more importantly she's been very much involved on the model code committee with the Federation of Law Societies that led to the Federation's proposal for its code proposal. And finally of course we have Justice Joel Fischel who has spent his time on the appellate court of Nova Scotia dealing with a variety of issues. He comes from a background as a managing partner at a law firm where he did have to deal with conflicts of interest issues so will be most interested to get his judicial perspective arising from his own practice perspective. So the plan for the afternoon is we're going to start with Professor Payton. He has approximately 20 minutes followed by Kristen Dangerfield for 20 minutes and Justice Fischel for 20 minutes. And at the end of that we have 10 to 15 minutes set aside for discussion and questions from the audience and we very much hope that you'll participate in that to lead to as full a discussion of this important issue as we can generate in the limited time that we have available. So with that Professor Payton I'll turn the floor over to you. Very much Marjorie and thank you to Dean Brooks and to Professor Devlin for the honour of the invitation. It's great to be back in Halifax amongst friends and here at Dell and it's a sign of the high regard with which I hold Dell Housie and the ethics program here, your colleagues Jocelyn Nounie. It's great to see Professor Cotter as well. You've taken the lead in Canadian legal ethics education for so many years and to see the integration of the academy with the profession in this way on such an important topic is a tribute to the legacy of Mr. Rickwire as well as to your school. Thank you also to Daryl Pink and Victoria Reese of the Nova Scotia Barrister Society for their hospitality and support for my participation. It's an exciting time to be in the US. Midterm congressional elections tomorrow are gonna set the stage for the next few years and beyond, President Palin in 2012. I may be coming back sooner than you expect. In addition I received an email buzz this morning on my Blackberry that George W. Bush's new memoirs are gonna be available next week and the promotion indicates that I can get 46% off and still get the free crayons. While I note that we're being recorded, hello Department of Homeland Security, I do wanna come back tomorrow. I should note that my comments this afternoon are in my personal capacity while I am Chair of the Canadian Bar Association's National Ethics and Professional Responsibility Committee. I'm not here representing the CBA in any official capacity and my remarks do not necessarily reflect CBA policy and should not be attributed to the CBA. Simon, I trust you're taking notes. You've had an introduction, I understand, to some of the key cases in the background to conflicts of interest issues. In the course, in those of you in the audience from the profession, you'll be familiar with the discussion about Neal, McDonnell the State and Struther and so I'm not going to go over that but I wanna do three things in the time that I have with you. One is to provide a bit of the background and some of the overview of the work of the CBA Conflicts of Interest Task Force and the recommendations for changes to the CBA Code of Professional Conduct which have directly put the CBA in conflict with the Federation of Law Societies. To elaborate second upon some of the key differences between the CBA and the Federation's approaches and third and actually where I'm gonna start is to situate the Canadian debate on conflicts of interest in international perspective. As a comparative scholar, this is what I do in terms of looking around the world to recognize that we as Canadians are not the only ones engaged with these issues and that we have a lot to learn from both the struggles as well as the responses that have been developed elsewhere. Conflicts issues are ones which have received attention and remain a concern in the US, in England and in Australia and the experiences in those jurisdictions should inform the way in which we approach these issues. I think they also signal some larger lessons about the transformation of the profession and while it would be very stimulating I'm sure for all of you to really delve into in great depth the nuances of conflicts rules, I think the bigger issue is really what it signals for the transformation of the profession. So let me start with the last point. The transformation of the profession and the impact of globalization in particular what are some of the key concerns that the conflicts debate engages? First question, is law a profession or a business? Second, what are our core values? Do we have core values as a profession? And that's the subject of other work in which I'm engaged and which a few of you have recently heard me speak at the International Institute for Law Association Chief Executives and curiously there they're surprisingly less confluence or agreement on what constitute the core values of the profession than you might expect. Third question, what impact is the size of firms having on the way in which law is being practiced and where conflicts rules come into play? Fourth question, how can lawyer mobility both between firms and across geography be reconciled with rules developed for a different time and age? Fifth, how are conceptions of client and lawyer loyalty changing? And finally, what impact does the fluidity of borders have on the way in which we are conceived of as a profession? Now I mentioned this last point on globalization specifically because it was raised most recently in the English consultations on conflict rules. In December 2008, the Solicitor's Regulation Authority, an independent regulatory body knew after the Legal Services Act in England in 2007, issued a set of proposed amendments to the 2007 English Solicitor's Code of Conduct, specifically to both the rules on conflicts of interest as well as duties of confidentiality and disclosure. Sound familiar? They're engaged in it at around the same time. They engaged in a wide-reaching consultation and have been engaged in a very vast set of changes that are transforming the ways in which solicitors in England are being regulated. They're moving towards a system of what they call outcomes focused or principles-based regulation in line with the view that, I'm quoting from one of their reports, it's time to modernize the regulation of the profession. It was widely perceived that City of London firms were flouting the existing rules and away and that they were out of step. And so in that respect, at least, there were a 2007 set of changes and then more consultations and recommendations in 2008. Now, I won't go into grand detail in terms of their proposed changes, but let me signal from their reports a couple of things I think we need to keep in mind. First off, they talked about the importance of including globalization in this dialogue about conflicts rules, and let me quote specifically. They say, in New York and Germany, although there's a wider definition of what constitutes a conflict than is the case in the UK, there's also an unfettered ability for clients to waive their rights. By bringing the English and Welsh conduct rules in line with those of other major financial centers, firms who have international clients will be able to compete more effectively for business. This is language from the Law Society of England and Wales, talking about globalization and using rules to create more effective competition for their law firms in a global economy. So as Canadian firms seek to compete in an increasingly interconnected global legal environment, taking a purely parochial approach both ignores this reality and has the potential to leave us behind. It was curious as well that the Law Society of England and Wales framed their response to recommendations by saying, quote, the proposed changes would bring benefits that outweigh the risks, and indeed those risks can be managed. They also framed the response, signaling ahead to some of the CBA reports that you've already read. In terms of client choice, a potential client should not be deprived of his or her choice of solicitor without good cause. If the client's freedom to instruct the firm of their choice and the benefits that this brings at ways the risk which arises from the same firm acting for multiple parties, then it would be disproportionate to prevent it. So we're not the only ones grappling with these issues. The SRA issued a second consultation paper in December 2009, responses closed in February 2010, and in April, the Law Society Gazette reported that far-reaching plans to allow firms to advise rival clients on the same deal had been shelved, following significant opposition from the Fitzi 100 companies, general counsel for the major 100 companies in England. So their debate and dialogue is ongoing. In the US, the American Bar Association's Ethics 2020 Commission, tasked with evaluating changes to US rules of professional conduct, has been specifically directed to consider what alterations are necessary in order to address the impact of both globalization and technology on the ways in which lawyers work and the ways in which we're regulated. The ABA had a rankerous debate on changes to rule 1.10 on imputation of conflicts in February 2009, and the ABA House of Delegates voted very narrowly, 219 to 183, in favor of a rule change that permits screening of lawyers moving from one firm to another, one private firm to another, or from corporate practice to a private firm so long as all of the procedural requirements of the rule are met. And again, the issues are the same. Australia, as well, is in the middle of a national reform movement. The Council of Australian Governments and the Attorney General there are engaged in a project to nationalize regulation of the legal profession in Australia, the idea of harmonization of rule state to state, rather than being regulated state to state to move to a national harmonization project. And prior to this project, the task force was being charged with trying to figure out what uniform national regulations, particularly on conflicts, would end up serving both the profession and Australian lawyers competing globally in the marketplace. Their proposal included a provision for information barriers, what the ABA calls non-consensual screening, Chinese walls, firewalls, for dealings with conflicts of interest. The fact that information barriers were proposed was significant because none of the previous conduct rules in Australia, either for any individual state or for the law council, had included any such significant provision. So accordingly, the adoption of a more flexible approach and more flexible conflict rules in Australia, in England, in the United States is a significant departure and a further signal of international directions on these issues. The language of the Australian commentators also should be informing us. And what they said reflects what's being said elsewhere. The increase in size of professional service firms, the corresponding rise in market concentration, and the growing mobility of both professionals and clients between firms makes this change necessary. So globally then, the key issues are similar. The approaches the legal profession and legal regulators are looking to adopt are all pointing in the direction of a more relaxed approach to traditional conflicts of interest rules. The question is where to strike that balance. So what about Canada? Well, those of you familiar with this will indulge me while I go over some of the background. In August 2008, the Canadian Bar Association's National Council adopted virtually unanimously 21 different recommendations aimed at reforming the CBA's Code of Professional Conduct and providing some additional guidance after McDonald's estate, Neil and Strother on how lawyers could fulfill their fiduciary duty to avoid conflicting interests. You have distributed here this afternoon a one page handout. I understand that one of my colleagues at Western has actually made this into a t-shirt, which is more a sign of life in London, I suppose, than in terms of the merits of the t-shirt. But in terms of just signaling to you how complex it is and how difficult it is to resolve conflicts and the kind of thinking that has to go in, if you're a conflicts partner in a firm and I know that some of you either have been or are, you hope you enjoyed that previous life. In dealing with these issues though, I frame it both as a professional responsibility concern and as risk management. All you need to do is point to the settlement, $30 million from one of those major Toronto law firm stories in the Conrad Black case to know that there are significant potential without any admission liability, of course, to know that there are significant consequences, personal, professional and financial to conflicts of interest decisions. So getting this right has important consequences internally within the profession, externally in terms of the way that lawyers are viewed and most importantly for clients. That was reflected in the 260 page report, which I understand Professor Devlin didn't make you read for this afternoon. It's both comprehensive and controversial in its way and we don't have all afternoon and I've got a few minutes left so I'm not gonna provide you the overview although you do have the summary. I'll hit on a few significant points though. And one of the things that I think comes out first and foremost is again the task forces emphasis on loyalty to clients. Lawyers must never permit their own interests or their duties to others to compromise their work for a client. They must provide zealous representation and protect client confidences. Clients are entitled to expect that their lawyers will act with integrity and provide them with sound legal advice. Simply put, the central public policy purpose of conflicts law and rules is to protect client representation. Okay, we've got that out there. So what do we need to do? Well what the report attempts to do is answer a number of different questions. First question, how do you define what is a conflicting interest? Second, to clarify the duties of lawyers after a retainer ends. And I had actually taken my legal ethics class from Queens up to the Supreme Court of Canada when Strother was being argued. It was a fascinating day. Fascinating exchange with the judges and the fact that it's a 5-4 decision is completely consonant with what went on in the courtroom that day. I've never visibly seen judges holding their noses so tightly in any respect, with all due respect to the Supreme Court as they were doing, trying to consider what was arising out of that case. And in that respect at least, as we look at it as a profession, at a responsibility to clients, where our duties of loyalty go, and how to make sure that we don't let our own financial interests overwhelm our duties to those clients, we have some work to do. So a definition of what constitutes a conflicting interest, clarification of the duties of when a retainer ends, to address and clarify third, that misuse of confidential information is something distinct from conflict of interest. These often get merged in the discussion and dialogue. And I think the CBA's task force sent an important signal by saying, look, we've got responsibilities around confidential information. They should not be merged with our important considerations of what constitutes a conflict. Fourth task out of the task force report was to update the approach on the use of confidentiality screens originally adopted in 1993 after the McDonald's State case. Next point to address confidentiality concerns arising from law firm staff transfers as well as law firm mergers. Once upon a time, you graduated from law school, you joined a firm assuming that you didn't make another choice, you stayed with that firm, staff stayed with that firm, you stayed in your community, and that was the end of the story. We are in a different era. Mergers acquisitions the globalization of practice, the movement of staff, the movement of lawyers, virtual law practice, it's a changed reality. And then finally, the key point, and again, one of the issues I keep coming back to and issues that I write about that lawyers still struggle with is, who is your client? And so in that regard at least in 260 pages, what the CBA's task force attempted to do was delve into these issues, provide some answers that could be translated into the code of professional conduct and to give additional guidance, a chart that you can have made into a t-shirt or otherwise in their toolkit to help lawyers actually get their way through the murky decisions and the murky waters of conflicts problems. The report's key recommendation and I know that I'm running out of time, so let me talk about the key recommendation and then a couple of the issues on the juxtaposition of CBA with Federation interests. The report's key recommendation codifies the meaning of conflicting interests as an interest that gives rise to quote, a substantial risk of material and adverse effect on representation, a substantial risk of material and adverse effect on representation. And they talk about that arising in three different circumstances, a conflict of duty and interest, a conflict of duty and duty and a conflict of duty with relationship and I'll leave it to you to go back into the report in detail to unpack all of those three. But essentially what the report's trying to do is set the bar quite high and again in light of the duties of loyalty to clients but to say, look, in terms of this changed reality where can we manage conflicts and what do we need to define as a conflicting relationship? The idea that it has to be a substantial risk of material adverse effect on representation is where that bar got set. In those three circumstances that I identified, CBA's report says that unless the client's been informed and has consented, a lawyer may not act where any of those exist. So you need to inform your clients and you need their consent, okay? But what about the rest of the situations? Well, the CBA and the task force believe that a lawyer should be able to act in a matter which was adverse to current client's interests provided that the matter was unrelated to any matter in which the lawyer was acting for that client and no conflicting interest was present. We're starting to get into some of the detail and in that respect, at least, what it's really about is saying where are we gonna draw the lines? Should a bright line be drawn for where a lawyer's representation ought to end? And what are you doing in terms of client choice if you draw the line in that particular place? And I think in that respect, the conflict with the Federation really comes down to a few key issues of difference and I'll leave it at this point. First off is this definition of what constitutes a conflicting interest. There are different views. I've talked about where the CBA's bar has been set. The Federation's proposed rule is that a lawyer must not act or continue to act in a manner where there is or is likely to be a conflicting interest unless after disclosure the client consents. The problem is that little inserted phrase or is likely to be. That means up front a lawyer has to basically prognosticate about where conflicts will end up emerging. And while I'd like to think that we're all visionaries, the problem with that language is that it curves in stone the obligation as a professional responsibility. The idea that you have to make the right projection. The second area is acting against current clients and briefly where the CBA and the Federation differs is that the CBA sees the Federation's proposed approach to it as freezing the law. As Chief Justice McLaughlin noted in Descent in Struther, lawyers' duty of loyalty is violated breach of fiduciary duties established. This is the position on the authorities which courts must follow. This does not of course preclude law societies from imposing additional ethical duties on lawyers. They are better attuned than the courts to the moderate realities of legal practice and to the needs of clients. If obligations of lawyers are to be extended beyond their established bounds, it's for these bodies, not the courts to do so. And so the CBA has said to the Federation, don't abrogate your responsibility. Don't freeze the law, because well the law might change. And in that regard at least, we need to take a more careful look with broader consultation. And I think that's another key point in terms of process. The CBA consulted widely, over 300 responses to a questionnaire, open hearings and the like, the Federation hasn't engaged in that. And so in terms of engaging a dialogue with the profession, we've got substance problems as well as a real process problem. There are other major issues which I'm sure the rest of the panel will get into, but it sets the stage for this juxtaposition of approaches. Conflicts of interest are not only a national problem or a local problem or a domestic problem, it's something that faces us as lawyers heading into a very different legal profession than the one we've been in. My job right now at least is to encourage that dialogue, to take a look at where these other solutions are being proposed, to say what works best. Both in terms of satisfying our duties to clients and to the public as a whole, in order that we can maintain that privilege that's been accorded to us in terms of legal representation. Thank you very much for your attention. I look forward to the Q and A later on. Thank you very much, Professor Payton. I think you've set the stage very nicely for our next speaker, Chris Dangerfield. You've spoken about the CBA setting the bar quite high. Chris Dangerfield will perhaps now speak to the additional length to which the Federation has gone in terms of setting the bar. And we'll look forward to Chris's comments speaking in the context of the Federation's position on conflicts. Chris? Thank you, Marjorie. And good afternoon, everybody. It's a pleasure to be here in Halifax and a pleasure to be here at this very distinguished faculty of law. I have to tell you that if 30 years ago, when I was sitting in a classroom much like this, except for the fact there were no plug-ins for laptops, if someone had told me that over the course of the next couple of years that I would transfer from one law firm to the next, that I would in effect become exhibit A in a case that would wind its way up to the Supreme Court of Canada, that the decision in that case would essentially revolutionize the law of conflicts as we knew it in Canada at the time, that it would generate effectively a cottage industry for my colleagues across the country to engage in disputes over conflicts, that it would impact on clients in both a negative and positive way. I suspect I would have bolted out of the classroom pretty quickly and opted for something like architecture or music or something that was a little less mind numbing than what I'm gonna talk to you about today, but I didn't have that foresight and so here I am and I am very pleased to speak with you on this particular subject. I'm gonna talk to you today in keeping with the theme that we're here to speak about, about the good, the bad and the ugly of conflicts from the perspective of a regulator, whether that be the Nova Scotia Barrister Society, the Law Society of Manitoba or the Federation of Law Societies, the entity that is charged with developing standards of professional conduct for lawyers, what a lawyer should do, what a lawyer shouldn't do and then enforcing those standards and in every instance, our mandate as regulators requires that we develop those standards of professional conduct with a view to protecting the public and who's the public? Well, the public is our clients. It's our current clients, it's our former clients, it's our prospective clients and we are charged with protecting the interest of those clients and that's an important thing to remember in terms of the discussion that we're having this afternoon because that's a very distinct obligation that regulators have as opposed to what the Canadian Bar Association does. The Canadian Bar Association advocates for the interests of its members. I'm a proud member of the Canadian Bar Association and it does tremendous work, but its work has a different focus than that which regulators have. It strikes me that the concept of conflicts and the rules that prohibit conflicts serve a purpose that is good in every sense of that word if we focus on client protection because it's important that the profession collectively ensures that our clients can be confident that they always have our undivided loyalty. It's absolutely critical that when a client comes into my office they know that I'm not going to divulge their secrets, I'm not going to attack their interests and they are going to have my undivided loyalty. I will be loyal to that client alone and it's those very simple basic principles that are at the heart of the discussion about conflicts and are at the heart of the debate about the rules and what the rules ought to provide with respect to conflicts of interest. Those same principles also serve the much broader purpose of ensuring that the public has confidence in the administration of justice, in the integrity of the legal profession. In an era where lawyers, sadly, rank only marginally higher than used car salesmen and politicians in the perception of the public with respect to the relative trustworthiness of the profession, that's important. It's important to regulators and it's important to all of us who practice law, who work hard on behalf of our clients, who take pride in what we do every day. And so the principles governing conflict, the principles that prohibit conflicts really do serve a purpose that is good in that sense. But what it can start out, what is good, can very quickly deteriorate if we don't identify conflicts of interest, if we don't manage those conflicts of interest, where a lawyer places himself in a conflict, prefers his own interests, his personal interests over those of a client, or prefers the interests of another client or another person over his own client. In those circumstances, there's a very real risk that the client's interests are jeopardized and it's our responsibility as regulators to ensure that we protect those interests by imposing rules that are sensible, clear, and are fair. And if we don't do that, we run the risk that someone else will step in and do that for us as governments have done in other jurisdictions where lawyers have lost the right to self-govern. And so with that background in mind, it's for that reason that the Federation of Law Societies in developing model rules with respect, not only to the professional code of conduct generally, but to rules relating to conflicts, took a significant amount of time in determining what the content of those rules ought to be. Committee was established in 2005 to address the NEL decision to review the legal principles, the applicable legal principles, case law that followed, and to develop proposed rules. And I'm gonna focus this afternoon. I believe you have some rules or we're going to be provided with some rules. I don't know whether you have the model code rules, but in any event, I'm gonna focus on the rule that relates to current clients. Because without a doubt, that is the rule that has generated the most significant amount of controversy in terms of the work that the CBA has done as opposed to the work that the Federation of Law Societies has done. And the current client rule in the model code is 2.04 sub three. As I say, I don't know whether you have it there, but what the rule provides essentially is that a lawyer must not represent a client whose interests are directly adverse to the immediate interests of a current client, even if those matters are unrelated, unless both clients consent. That's what the rule says, and that's what the Federation has recommended. The most hotly debated aspect of that rule is the phrase that says, even if the matters are unrelated, and I'll talk about that in a moment, but in simplest terms, what does the rule mean? Well, it means if you have two clients and their interests are adverse, and we can talk about whether they're directly adverse or whether it impacts on the immediate legal interests, but for all intents and purposes this afternoon, where the interests are adverse, the Federation says, get the client's consent before you're prepared to act. So to put that in real terms, if I have a client, Mr. Smith, he comes into my office, he's just left his wife, he wants me to represent him on his divorce, and I accept the retainer. Next day, Mr. Smith's employer comes in and wants to discipline some employees, one of whom is Mr. Smith. Well, without a doubt, the employer's interests are adverse to the interests of my client, Mr. Smith, and yet it's an unrelated matter. I'm acting on the divorce matter, this is an employment matter. It's unrelated. But the model code rule would say, I've got to get the consents of my clients before I can act in that second retainer. And when I say consents of clients, that is plural, consent of each client. And it's simple, it makes sense, why wouldn't you? Each of those clients has come into my office to request my services to represent their interests. Surely they're entitled to know if there are other interests at stake that might have some impact on my ability to represent them. Mr. Smith were to receive a letter from me or one of my associates saying, you're terminated effective tomorrow, he would quite justifiably field betrayed by the lawyer and the firm that had been representing him. Similarly, surely the employer's entitled to know when he comes into my office and I agree to accept the retainer that there might be another interest at stake that I might not represent him in the full sense in that I have actually some sympathy for one of the clients that he's about to terminate because he happens to be my client in another matter. But in those circumstances, the model code says, I've got to get their consents. Well, what does the CBA say about the model rule? You've heard a little bit about it from Professor Payton. The CBA says the Federation's rule is too broad that it in certain circumstances will prohibit representation where there is no real risk to the client. Again, I don't know whether you have the CBA's rule, but the CBA rule is in chapter five and unlike the Federation rule, which says you can't act where the interest are adverse unless you have consent, the CBA rule says you can act as long as the matters are unrelated and providing that there's no conflicting interest. And Professor Payton talked about the definition of conflicting interests, whether there's a substantial risk of a material and adverse effect. So the CBA says to me, I don't need to get my client's consent in circumstances where I can demonstrate that my representation of a current client, in this case, Mr. Smith, will not be materially and adversely affected by my retainer in the second matter. So in effect, what the CBA rule does is take away the onus that is placed upon the lawyer in the model code provision, which requires that the lawyer ensure that there's disclosure to his clients and that his clients consent to the retainer in each instance. So what about the client in all of this? Where are they, where the CBA rule would permit the lawyer to make that assessment in terms of whether there is a substantial risk of a material and adverse effect independent of the client without input from the client? Is that a good idea? To leave that to the judgment of the lawyer. Well, as lawyers, we make judgment calls every day. That's what they're teaching you in law school. They certainly taught us that in law school to take a set of facts, apply the law, render an opinion. But I have to tell you, it's been my observation over the years that a funny kind of thing happens when lawyers leave the academic world and enter into the business side of the practice of law. It's certainly been my observation that lawyers and law firms quite readily recognize a conflict when someone else is on the hot seat. But put them in the same scenario, not so much. They're equally as likely to say conflict, what conflict? And often that's because there are competing interests. The lawyer's conflicting personal interest in wanting to accept a retainer that's lucrative, that's interesting, that's high profile. I don't mean to attribute ill motive in those circumstances because I do believe that most lawyers genuinely, when assessing those scenarios, want to do the right thing. But ultimately, it's a very difficult call to make when you do have a personal interest, ultimately, in the outcome and whether you are going to continue on with that retainer. In terms of confidential information and the risk that it might be disclosed in the Martin and McDonald case, the court said the test is whether a reasonably informed member of the public would conclude that confidential information was likely to be disclosed. And the onus was placed upon the lawyers and the law firms to establish that there was no possibility of disclosure in that case. In essence, what the court was saying in Martin and McDonald was, it's not just that justice must be done, it must be seen to be done. And I would suggest to you that that's the same principle that ought to apply when we're talking about rules that pertain to current clients. Back to the model rule for a moment, the CBA, as I indicated, say that the rule is too broad, the one that is being proposed by the Federation, they say it's problematic for small rural firms, they say that it's problematic for larger firms, mega firms with offices across the country. It may be true, maybe not certainly a will in some instances, that is up for debate, but the fact of the matter is the rule that has been proposed by the Federation of Law Societies is a virtually verbatim articulation of the rule that was established by the Supreme Court of Canada in the Vinny decision. It's taken straight from a passage written by Mr. Justice Vinny. And the rule reflects a requirement addressing the broader issue of the duty of loyalty that is owed to clients. A lawyer is in a fiduciary relationship with his or her clients. And the hallmark of that relationship is the duty of loyalty that is owed to those clients. And what the Supreme Court of Canada said in Neil is if the interests are adverse, what does it matter if the matters are unrelated? You still ought to get the consents of the client before you take on the second retainer. So it seems without doubt that the Supreme Court of Canada has established a very high standard for lawyers in the context of current clients, which is premised on the fiduciary duty of loyalty. And not all unrelated matters create problems. There's no question about that, but there has to be a principle, there has to be a rule for those that do. That's the rule that was established in Neil. That's the rule being proposed by the Federation of Law Societies. So where are we now? We have rule 2.04 sub three that the Federation has advanced. And we most recently have a response to that rule from the Bar Association that says to Federation, the Federation and to Law Societies don't rush into making a rule about current clients. I think I heard Professor Payton say that this afternoon. Don't rush into that without further consultation and without having the opportunity to see how the law evolves. Well, I venture to say that we could consult on this matter as we like to say in Manitoba till the cows come home and we're not going to reach unanimity on this issue. We're not. If you look at decisions in this area, if you look at the Martin decision, the Strother decision, there were strong dissents in those cases. No question about that. But you know, when Martin and McDonald was decided, when the Manitoba Court of Appeal issued its decision, my eldest son was six days old. He's now 21, he could be sitting in this classroom. When the Supreme Court of Canada overturned that decision, Mr. Wickwire, who we are here to honor today, was president of the Nova Scotia Barrister Society. That's 20 years ago. An entire generation of young lawyers has passed through these doors. And we're still arguing about the content of rules relating to conflicts. And now, of course, we have the Neil decision and we're contemplating what is the duty of loyalty? How far ought we to go with that? But Neil was issued in 2001. The Federation established a committee in 2004. There was a considerable amount of work done by that committee. In fact, rules were presented in 2007. And then the Federation, very wisely, I would suggest, opted to wait until it received the work product from the CBA's committee. And I have to say that the work that was done by the CBA is excellent, a very thorough, thoughtful, well-articulated report. And I'm not just saying that because I know you gave them advice, Professor Payton, or because my employer was, in fact, on that committee. But it certainly is a tremendous report. And for any of you that want to explore some of the issues, I would commend it to you for reading. But at the end of the day, the CBA is looking at this issue from a different perspective than regulators are looking at it from. And the time has come for regulators to make some very difficult decisions. And they are difficult. This isn't an easy area, very complex, no doubt about it. And it's time that the Federation makes some rules that not only will protect the interests of clients generally, but will ensure that clients trust law societies and lawyers to protect their interests. And so the federations of the view that the rules that have been proposed do just that, that the rules provide clear direction to members, that they protect the interests of clients, that they are consistent with what the Supreme Court of Canada has said to us about what the scope of a lawyer's duty of loyalty is. We can change the rules, but we can't change the law that applies to fiduciaries or to lawyers and law firms as fiduciaries. We don't have that ability. So if we're gonna establish rules, why would we not establish rules that reflect what the courts have told us is the law in this country? Are the rules perfect? Absolutely not, but I think they say that perfection is the enemy of excellence. Will they require further review? Probably yes, as complex matters come to our attention as the law continues to evolve over the years. But I would suggest to you that we can't let the complexity of the issue paralyze us. We can't establish ethical principles that don't accord with legal principles. We can't make rules that favor the economic interests of lawyers and law firms over the interests of our clients. We can't make rules that do damage to the reputation of the legal profession and to all of the good that we do. Because to allow that to occur to, in essence, undermine the public's confidence in the legal profession would not only be a bad outcome of the conflicts debate, it would be a very ugly outcome indeed. So thank you very much for your attention. I look forward to discussing this with you. Thank you so much, Chris. Chris has spoken of the Federation's proposed rule as protecting the interests of clients and ensuring that clients will trust their lawyers. Professor Payton spoke about the Federation's rules as freezing the law where it stands and not necessarily allowing it to evolve to give the right type of recognition that needs to be considered in the context of client choice and business efficacy in terms of practice. So we have some very competing interests and values at play when we're looking at the two positions to address this issue further and to address matters of the appropriateness of freezing the law by the establishment of a standard. We have Justice Joel Fischo from the Nova Scotia Court of Appeal. And I'd also like to just acknowledge today in attendance that Chief Justice Michael McDonald of the Nova Scotia Court of Appeal and Justice John Murphy from the Nova Scotia Supreme Court. Thank you both very much for being here today. Justice Fischo. Margie, I think of my hair more as Tom Brady than Justin Bieber, just in a second. I'm really honored to be here to speak at Mr. Wickwire's annual event. When I was a young lawyer, I never had a case with Ted Wickwire, but he was known even to young whippersnappers as a rock. He was a pillar of the profession. He not only chaired the committee which led to the first handbook on legal ethics that's mentioned in your handout there in the late 80s. He was also a star athlete. He was a quarterback of the Dalhousie football team which didn't play football for 30 years, but now I guess they're back playing football and they're playing on the Wickwire field. Moving to the topic here, I'm not sure why Professor Devlin shows the good, the bad, and the ugly has the title, but he promised me that there was like a joint tenancy between the adjectives and the members of the panel. It's not meant to sequentially apply to the speakers, okay? I'll just begin by explaining what I did on the weekend. On Saturday I went to Walmart and I bought an ironing board and I went in and someone said hello to me and told me where the ironing boards were. I bought it, found it, bought it, and I left with my ironing board and the ironing board works just fine. I have no problems with the ironing board or with Walmart. That's because ironing boards are fungible retail commodities. Not at all like legal service. Legal service is all about the tailored individual service. It's all about finding out from the client what happened, what do you want, what will you settle for, what's our strategy to get either of those, and the resource for that dynamic is the confidential information. Without the confidential information you don't have the raw material to do any of those things and the confidential information only flows as the lifeblood of the relationship if there is trust. Trust that the lawyer will keep it confidential, that it's for his or her eyes only. Trust is one of the two bases, foundations, or one of the foundations, whether it's two or not, one of the foundations of the lawyer-client relationship. Unlike my relationship with Walmart when I bought my fungible retail commodity. Second thing, second difference between my Walmart experience and what a lawyer does with a client is this. My ironing board works just fine regardless of the experience of other ironing board purchasers at Walmart. I mean, if their ironing boards work fine for them, that doesn't diminish the utility of my board and my ironing experience isn't elevated because theirs don't work well. In other words, ironing board sales are not a zero-sum commercial transaction. Unlike law practice, where usually, certainly in litigation, but even in negotiation solicitors work, the better you do means, unfortunately, the worse that your opponent does. There may be exceptions where both can do well and that's why mediators thrive, but generally, especially in litigation, but even in negotiation, the less well your opponent does, the better you do, which is why your lawyer is your champion, your gladiator. And you don't want a wussy gladiator. You don't want a wimpy champion. And that's where the notion came from that the lawyer is a zealous champion, the zealous word that you see in the case law. And zeal means, at least to the phrase that came, that it was in one of the cases that I think just as Benny referred to, it means that the lawyer knows only his client. He doesn't know another client. He doesn't know his own interests. He knows only his client's interests. That, what I'm speaking of here, is the second foundation of the lawyer's relationship. Before it was trust, now this is loyalty, I'm speaking of. Trust and loyalty, the two bases of an effective lawyer-client relationship. And the best lawyer is one who actually makes these work to his advantage. For instance, the best lawyer is one who can actually extract from his client the best confidential information to tailor his strategy in a way that works so that he's not surprised later. And the lawyer who doesn't do that, who treats law practice like a retail commodity, like a cookie cutter, he won't get the best result. In fact, he may even go so far as to get himself sued. And the best business developers are the ones who key into what I'm talking about. This keying into confidential information and using it for strategic, for individual tailored strategy. I mean, look at the legal advertisements you see in the magazines. They all talk about solutions. We are your law firm for solutions. Well, that's exactly what I'm speaking of. Confidential information, rematerialized, transmogrified into a solution. No one at Walmart offered me a solution to my ironing issues. No one, no, I didn't have engage in conversations about ironing strategy. Nobody cared about the confidential facts that happened in my laundry room. It just wasn't relevant. Law practice is different. That is the difference between the profession of practicing law and the business of retail commerce. So moving from that, let's take a virtual scenario. Well, before I get to the virtual scenario, let's sort of bridge that first of all to talk about the legal parameters. If loyalty and trust are basic to the lawyer's relationship with his or her client, then that means that the legal parameters which govern the legal relationship, the lawyer's relationship, have to promote trust and loyalty. Now, there are a number of legal parameters, one of them being the disciplinary standards of conduct that law societies enact. That's a matter for the law societies to enact and the CBA to comment on. That doesn't involve judges, so I'm not gonna go there. But there are two aspects of the lawyer's relationship, trust, loyalty, so on, which definitely involve judges, and that's what I'm gonna speak of. First of all, that is the content of the fiduciary duties, which judges courts enforce, including damages, awards. And secondly, it's the decision whether or not a lawyer can continue to act on a case. Judges decide that. Those are judge-made rules, not law society rules, not CBA rules. The judges may look to those sources for guidance, but the judges make those rules. And I'm gonna speak to those two aspects, content of fiduciary duty and whether a lawyer can act for a client in a particular case or file. So with that, let's move to a virtual scenario. And we are in the conference room of the Halifax office of Atlantic Canada Law Firm. Let's call the law firm Lawyers Arrest. And the participants in this conference room at the Lawyers Arrest office, the avatars, if you like, in this virtual scenario are the legal team on this juicy case that the law firm has. Very juicy case. And also the managing partner of the Halifax office. They're all there in the conference room talking about a problem, talking about this case. And this case, it's a wonderful case. It's mega billings, lots of junior lawyers involved. It's a juicy case, legal issues, gonna get leave to appeal to the Supreme Court of Canada, high profile, client can pay, client wants to fight on principle and pay, which is a great combination, unusual. The, it's a winning case. The, you know, you just finished discoveries of the other side of the defendant and you nailed them on discovery. And, you know, everything's just great. It's just a dream file. The only problem is yesterday afternoon, the Halifax Managing Partner of Lawyers for Us got a phone call from Newfoundland Managing Partner of the same law firm saying, we represent the defendant in Newfoundland. And he's really mad. He came back from discovery and he doesn't like being browbeat in this way by what he considers to be his lawyers. And he wants to pull his work from Newfoundland. What's more, he's saying there's a conflict. So we want you to get off this file. So everyone gathers together then next morning in the conference room, talk about what to do. And this isn't unusual. This happens. Litigators here with multi-office firms will acknowledge this happened. I dealt with it several times when I was Managing Partner of the Atlanta Cancer Firm. So what do you do? Well, I'll just explore the reactions that you'll hear around this hypothetical virtual conference room from the various lawyers and we'll sort of match them up and try to dovetail those into what the Supreme Court of Canada said in the trilogy. Now, you will get an objective reaction around the table. You will get somebody, maybe someone right out of law school out of the legal ethics class, you will get somebody saying, whoops, Neil Case, current client, directly adverse to immediate interests. I don't know, bright line, test, what can we do? You'll get someone saying that. Okay, but you'll also get a lot of the following. You'll get some people saying, gee, I remember something in those cases about all those metaphors. There are Chinese walls and there are cones of silence and there were conflict screens. Let's do all, let's get our people to get all those things in place this afternoon. It'll be great. We'll take care of it. That's the McDonald case. Martin or McDonald's state case. Only problem is that's not going to work here. It's not going to work for two reasons. First of all, McDonald's case dealt with confidential information involving former client situation. This deals with direct adverse interest of a current client. So, bright line test here, not a shades of gray test, Chinese walls, so on. Don't work under, under the Neil. You're under the Neil case, in other words, not the McDonald's case. Second problem with it is it's too late. Even under the McDonald's case, all those conflict screens have to be in place before the risk materializes. Once the risk materializes, then even under the single imputation theory, the imputation has occurred and it's too late to get the horse back in the barn. So, the metaphor solution, Chinese walls, conflict screens, cones of silence, that's not going to work here. Next possible scenario that'll be discussed by someone at the table will be, well, this defendant isn't our client. He may be a client of the Newfoundland office, but he's not our client, we're in the Halifax office. And, you know, we're not suing our client, he's a client of another office. Well, that's not gonna work either because it's clear under the case law that the client is a client of the firm and the fiduciary duty is a fiduciary duty of the firm. Also of individual lawyers, but also of the firm. The firm wants to present itself as a firm, then the other side of the coin is the clients are clients of the firm. So, the Newfoundland client is the client of the Halifax, of the firm, including the Halifax lawyers and partners and profit center and office of the firm. There's no getting around that. So, that's not gonna work. Third scenario, or thought that'll be thrown out and somewhat of a break off from the second one is, well, this file involves only Nova Scotia issues. There are no Newfoundland issues in this file. There's no Newfoundland information in this file and the Newfoundland office of our firm lawyers are us. They've had no knowledge of any of the information in our files on this Nova Scotia file. So, there's no problem here. Well, yes, there's a problem because, again, we're not dealing with a former client. We're dealing with a current client. That's the Brightline test. It's Neil, it's Binny. And that means that the test is adverse to the immediate interest of a current, directly adverse to the immediate interest of a current client. And the principle is loyalty, not confidential information. Shielding the confidential information doesn't answer the concern. The concern Binny said in Neil is loyalty. And loyalty applies whether the Newfoundland office has the confidential files of Halifax or not. So, that doesn't work. Next, the idea that'll be thrown out is someone will say, well, this is a tactical challenge. And even Binny and Neil said tactical challenges don't work. So, we can treat this as a tactical challenge and fight it off. Except, in Neil Binny made it clear that when there is direct adverse interest or immediate adverse interest for a current client, then that's not a tactical challenge. So, is this a tactical challenge? Well, you know, the client, that's the defendant here, the Newfoundland client, I'm calling that, is saying, look, you guys just eviscerated me at the discovery two weeks ago. These are my lawyers in his mind. He's talking about his lawyers. Eviscerated me at a discovery in a lawsuit where you're gonna sue for millions of dollars in damages. Maybe put my company at risk. There's nothing tactical about this. I don't want you doing that. It offends me that my lawyers would do this to me. That's not loyalty. Well, if that came to court, I doubt very much that the court would disagree with him. That's not loyalty. That's the Neal case. So that's not gonna work. The last thing, there are another thing that'll be thrown out on the table will be, well, the defendant here we're suing, he consented because, you know, he's known since the statement of claim was filed that we were suing and he isn't complained. He waits till after discoveries. So he's impliedly consented here. And that's a waiver. And Benny said it's okay if you had a consent. Well, that's not gonna work either because it's clear from Neal and from Strother that if you are gonna use the consent response to a conflicts challenge. Number one, you need consent of both clients. Number two, it's gotta be after full disclosure. Number three, this is unclear in the case law, but perhaps it has to be after independent legal advice. And number four, and this is especially clear from Strother, it's gotta be unequivocal. It can't be something you cobble together from inferences and implications. And that's because we're dealing with a situation between a lawyer and client here. The lawyer is in the business of crafting agreements. The client isn't, the lawyer has the advantages. The client doesn't, so you impute against the lawyer where there's an ambiguity. And here an ambiguous, well, he must have consented because he didn't complain about it. That's just not gonna do it under Strother. So that's not gonna work. So if you run through all of those possible ideas thrown on the table that aren't gonna work, what are you left with? Well, you'll have a number of other things thrown on the table, of the virtual conference table, of the lawyers or us Halifax office that morning. You'll have a number of what I call personal and mercantile factors thrown on the table, which have nothing to do really with the legal principles. You'll have people saying, well, it's not right. I mean, there's major buildings in this firm. I don't wanna lose, this is my billing target for the next six months. I can't lose this. And the law firm's saying, well, this is a major client we've got here this plaintiff. And if we lose him and send him off to another firm, we may not get him back. We don't wanna lose this client. You'll have the personal sting of someone you just nailed on discovery coming back and getting back at you. He said, he's just trying to get back at me. He's saying I'm dishonest. I'm not dishonest. Those factors will be thrown on the table. This is what happens when personal interests get mixed in with business interests. Lawyers are used to being objective for their clients. But when personal factors get mixed in, they have the tendency to mix personal and objective, just as anyone else does. They're being their own clients here in a sense when they're making these decisions. There will also be a mix of concerns about business differences and true legal conflicts discussed at this conference table. For instance, someone will likely say, well, the annual billings that the Newfoundland office gets from the defendant are far less than we will get from the Halifax office from the plaintiff. So surely in the overall interest of the firm, we shouldn't drop it. It's the Newfoundland office who should, I guess, drop their client. And we asked our Newfoundland partner to try to get us the Halifax office of this defendant. And he totally went out. He couldn't deliver that client to us. And now he's asking us to drop that client because of his own Newfoundland. So we'll get this sort of mix of office to office internal in the law firm dispute, a business difference dispute between offices of the law firm sort of conflating over the legal conflict issues. That'll be in there as well. And just on that point, it's interesting to go through the trilogy cases and see just where those personal and mercantile factors fit into the scenario. And I'll just take a few seconds and go through the three cases, but I can say they aren't on the judge's radar. In McDonald's state, like with Sipinka, he said there are three competing values which determine the issues. Number one is integrity of the legal system. Number two is, I think, the client's right to choose. His lawyer. Number three is reasonable mobility of lawyers. No mention of my right to keep my billings, my right to keep my client, that's not on the table. You go to Neil and Neil and Justice Binney, he restricted those factors even further. He said the major, the dominating factor of those three is the integrity of the legal system. The other factors diminished were downplayed. And Justice Binney, if you like, when he enunciated the sort of defense, if you call it defense, or the response to the conflict objection of saying it's a tactical objection, he didn't state that in terms of, well, this is in the interest of the lawyers to be able to raise this response to a conflict's objection. He spoke of it in terms of it's consistent and it promotes the integrity of the legal system that we don't allow tactical objections to upset litigation. So if we move from McDonald to Neil, we are elevating the integrity of the legal system value and diminishing the other two. So we're left with integrity of the legal system. We moved to Struther and it couldn't be more explicit in Struther that when the interests of the fiduciary and the beneficiary conflict, beneficiary trumps fiduciary, that's what Struther was all about. So these personal American tile factors that got thrown on the table the last group I was talking about, if the issue comes to the court, that unfortunately is really not on the radar of the judge who decides the two issues that I'm speaking of here. They may well play in those sort of business and personal nuances may well affect the calculus of what's going on in the conference room of lawyers or us when they're deciding what to do, but three months later when it gets to a court and there's an actual challenge, they won't really play. So the bottom line of all of that is yes, we're in another century, it's a brave new world, there has to be adjustments and so on that I've heard earlier, but that doesn't mean the adjustments have to be a relaxation or a compromise of the principles of fiduciary duties because trust and loyalty are as much the cement of the legal relationship between a lawyer and a client now as they were in previous centuries, that hasn't changed. What may have to be compromised is the structure of law firms. It's not destiny that mega firms have to get even more mega. It may be that after these mergers some of these, as we saw in the 1990s after some of the mega merger trends that the litigation boutiques spin off. Maybe that that is the way that free enterprise and the new century finds the way to continue to do business profitably while maintaining these principles of the lawyer-client relationship. Thank you. Danger field has discussed, are we somewhere, not quite there, but in a little different world according to Professor Payton where some of these other factors, including some of the mercantile factors that Justice Fischow spoke about, have a role to play in the practical reality of the provision of legal services. We're open at this point for your comments, your questions in the hope of furthering some of these issues in the remaining 15 minutes or so that we have left in these lectures. So I'd ask you if you have a question to come to the mic. I'm not sure that the mic is picking up the question so I will repeat it and then direct the question to the member of the panel who you would like to address it. Maybe just while we're waiting for the first question. I could see Professor Payton sitting there shaking his head at several of the things that Chris Dangerfield had to say and I'm wondering if Professor Payton if you might want to just give a very brief response to some of the points that Chris had put forward. You know, it was interesting, I started off my life as a commercial litigator with a major firm on Bay Street in Toronto and that poker face thing never really worked. There are a number of different issues that I think both Chris and Justice Fischow brought up that I'd like to respond to in terms of just the reaction. And one of the things that I'm not doing and that the CBA is not doing is seeding the moral high ground. It's always a good effective debating tactic to try and portray somebody advocating changes, somehow occupying less than the moral high ground. What I'm trying to do, certainly in reflecting in my own comments and I think this is where the reality of practice and change practice mega firms and otherwise is imbued throughout the CBA's report and in these international reports that I'm reflecting is that the world of practice is very different and that the conflicts rules need further consultation in terms of being able to develop and that's the fundamental problem that I've got with the Federation's approach. With all due respect to Chris, the fact that, well, we won't necessarily get agreement on them doesn't mean that we shouldn't consult. And for me in particular, the regulator exercising delegated authority in the public interest from the legislatures for that kind of approach to go forward is reflective of what happened in England and Australia where the regulators were seen as acting in their own rather than in the public interest than the end of self-regulation. And so in that respect at least, that's the process concern. The substance concern that I've got is actually and I appreciated Justice Fischo talking about heading into Walmart to buy an ironing board. Wait a couple of years in England, you can go into Tesco, the grocery store and get legal services. In the U.S. right now or if you're online here, go to legalzoom.com. Your competition as lawyers, if you wanted to set yourself up in a traditional practice and do residential real estate, good luck. Because title insurance has actually certainly changed the playing field in that regard so much so that the Law Society of Upper Canada owns a title insurance company that competes in the same market that they're regulating. So in that regard at least, the Competition Bureau 2008 report basically said they reported their frustration with the view that consumer interests in Canada weren't being served by legal rules that were unnecessarily restrictive and the Legal Services Act in 2007 in the U.K. enshrines as a principle of regulation the consumer interest and a consumer welfare perspective. So in that regard at least, when we're looking at not only conflicts rules and the narrow definitions, but rather the way in which the transformation of the profession is happening, we need to be attuned to these other interests. The mega firms are already there and it's not just simply a commercialization and that kind of commercial boardroom discussion that does go on creating problems. Mr. Strother, graduate of this law school, ended up actually much the richer as a result of the Supreme Court of Canada's decision, much, much the richer. But in terms of duties of loyalty to clients, those are still there. I'm a proud lawyer. What I'm reflecting I think is the transformation in terms of the law as business paradigm that we're all walking into and dealing with right now. These aren't easy solutions, but I think a practical approach that actually recognizes the ways in which these firms are going and enshrines consumer choice as part of that has to be part of the dialogue and that that dialogue needs to be an open consultation particularly where it's coming from the regulatory end. I think that the consultation element can be sufficiently addressed by the regulator by having provincially run consultations as each law society looks at whether to adopt the conflicts rules proposed by the Federation. Well, until we get a national regulator, which we can't seem to do on securities ends, and I don't think we're gonna see with law societies, I mean each one of them does have to understand what the local market is. And I think in terms of looking at exercising their responsibility as regulators to say, okay, we wanna come up with this harmonized approach, but we're not even going to go out and consult the public that we're actually supposed to be serving in terms of the public interest for me is problematic. Now, does it make for an unwieldy process? Perhaps, but I would rather see that invested. The CBA could do it. The American Bar Association on a number of different occasions has actually done it nationally. And that's where indeed the CBA is there to serve its members, but it's always taken that road where it's service to the Canadian public as well. And I think in that regard at least that's why you get these extensive reports, that's why you get the kinds of thoughtful, informed, differing perspectives that the CBA can end up providing. And for the Federation to build on that through the individual law societies, I think would be an important step and would send a signal to governments and others that they take that role in terms of serving the public interest, perhaps a little differently. I see Ron McDonald making his way to the mic. Ron McDonald is the incoming president of the Federation of Law Societies. I think here it comes. Marjorie, as Marjorie said, I have the pleasure in two weeks of becoming the president of the Federation of Law Societies of Canada. And this matter, it's a matter of public record, of course, is still before our council and of course has met with a great deal of discussion. And I welcome this opportunity to actually, Professor Payton, ask you a question. I'm a lawyer of 25 years who practiced in Halifax but most of it in Anikinish, which is a small town and consider myself a small town guy. And for that reason, tend to like to take problems down to what I consider to be their simplest level. And it's a two part question. What does the lawyer who has decided to act in an unrelated matter against a client say when that client finds out six months down the road, not having obviously been consulted for his consent? And given that the CBA rule, this is the second part, the CBA rule says that a conflicting interest is one that gives rise to a substantial risk of material and adverse effect on representation. Would it be a conflicting interest that if the adverse effect on representation is that the client is so upset with the fact that you have acted against him in an unrelated matter and didn't tell him that he no longer wishes you to be his counsel? To me, that's the kind of the bottom line, the rubber meets the road. I would suggest that if the client was such that they wouldn't be upset at you six months down the road, then you may as well have asked for their consent. And if they would be upset with you six months down the road, then you're in a difficult situation. And I think I would suggest that the Federation's rule tries to deal with that problem instead of six months down the road at the outset. But I look forward to your comments on that and thank you. Thank you very much for the question. I think the, let me try and tackle the second part first because what you're doing in essence is defending the federate, what I interpret you're doing is defending the Federation's language in terms of likely to emerge that I identified in my talk as the right approach. And I think that requires lawyers to prognosticate in ways in which we're not just frankly equipped to do. In terms of looking at any kind of conflicts problems, the ones that Judge Fischo identified, the ones that you identified, the ones I experienced in commercial litigation practice as in-house counsel before I put on my pointy-headed academics hat, there is the reality of saying, okay, I might be able to take on this additional work if the rules permit me to, but is it a good idea? And that question doesn't get answered by any ethics rules, by any conflicts rules directly in terms of the ways in which lawyers are resolving these conflicts, business conflicts as well as legal ones. And to say, okay, it's going to be a violation of the rules of professional conduct that can bring you up for sanction in front of the law society, never mind the malpractice suits, never mind the disqualification motions that will end up coming forward and do get used tactically to take lawyers out of sophisticated litigation, but rather taking it down to the simple client representation. Let me put my own hat on. As corporate counsel, if I find out that one of the major law firms representing the corporation is actually acting against me in another matter in which they didn't need my consent, six months down the road, am I going to be upset about that? Perhaps. And that's why I think you saw the reaction in England from the FTSE 100 that said, wait a second, we need to make sure or take a second look at the ways in which we're resolving this. So in that respect, at least from the CBA's rule, would your sort of six months down the road be a conflicting adverse interest if it sort of offends you personally? Well, that's where the CBA rule does take personal interests into account. If there's something that actually precludes you from engaging in this zealous representation of your client to the full and best of your ability. I mean, the US has specific language on that. The Canadian rules have had language about that. In terms of looking at some sort of conflicting material adverse interest, personal or otherwise, that would preclude you from fully engaging in that kind of loyalty and representation of your client, I think you'd have to decline it at that stage. Looking at the way in which your first questions posed, what does the lawyer who's decided to act against the client end up saying, that's an interesting conversation. And I think before you make that decision, you'd better be prepared to have the answer. Next at the mic is Daryl Pink, Executive Director of the Nova Scotia Barrister Society. I'd like to hear both Paul and Chris take us back to the boardroom of Lawyers Are Us at the day when the Halifax client came into the office. And I'd like based on the two versions that we're looking at, what's the process that the law firm would have to go through, recognizing that the defendant in the lawsuit they're about to be retained on is represented by the firm in Newfoundland? I'm not sure I entirely understand your question, Daryl. You want to know what process the firm should put into effect at that point where you've got an allegation of a conflict on the part of? They know they represent that client in Newfoundland. When they do their conflicts, they check, they'll identify that the client is on their client list in Newfoundland. What process would they go through? To determine whether they can accept the retain? Well, certainly once they recognize that the client is on their client list, then in that instance, to take on a retainer that's quite clearly adverse to the interests of their client, they're not in a position to do that. And in this particular instance, we're talking about a lawsuit where there's clearly a dispute between the parties in any event. So consent, I would think in those circumstances wouldn't be sufficient. If it wasn't a litigation context, then at that point, it would be appropriate to canvas with the clients, the extent to which they are prepared to consent in circumstances where there's that adverse interest. Paul? I'm not sure from the CBA's perspective in terms of the CBA proposed rule that it would be all that different. Because when you look at the definition in terms of substantial risk of material and adverse effect on representation, I think certainly taking on the new representation in that kind of context creates that difficulty. And so as you're going through the analysis, flow chart T-shirt or otherwise, I mean in dealing with that, those are hard decisions that come in to the firm at the table. And I agree with Justice Fischo, a lot of this questioning is going to be, how can we do this rather than the immediate sort of ethics person's response, we can't do this next question. I don't know that in terms of the way in which the issue was raised, particularly because it's in litigation, that there is any alternative response. I think one of the things that gets missed in all of this is that we tend to focus on either the very small firm context or on litigation context. But I would take a look at, for example, sophisticated and complex deals where you might have deal teams. The accounting firms do this. And while I know that there's a whole lawyer accounting conflict, I was once accused of having had an ethical lobotomy because I actually dared to cavort with the accountants. What they end up doing is segregating their teams to work on different parts of a large transaction, representing different clients. And in that respect, at least, I think we need to delineate. And we might need to take a look at the rules themselves, generally, to say, is a one-size-fits-all solution appropriate or adequate in that circumstance? So I'm doing the classic professor thing. I'm changing your hypo and giving you a different response. I was going to introduce myself Bernie Miller, managing partner of Lawyers Are Us, an Atlantic firm. And I heard two good examples. My question really relates to client choice and how that ties to client loyalty. And the two examples I heard as the managing partner of Lawyers Are Us, I can concede that that discussion that occurred in the boardroom was an entire waste of time. It's very clear to me acting for the plaintiff and the defendant as a conflict. But a more nuanced issue might arise with the Mr. Smith example that was given, Mr. Smith is getting a divorce. Mr. Smith lives in the summer side. He's been on the rotary for 10 years with a lawyer. He's the only lawyer he trusts. And he goes and chats with Mr. Smith and says, you know, this is a tough decision, but I'm getting divorced, will you represent me? That lawyer is partners with an employment lawyer who lives in Halifax, who's advised a corporate client on their downsizing policy. Without any knowledge that Mr. Smith was gonna be a target. Under the Law Society or the Federation rule, consent is required. So somebody's gotta go to Mr. Smith before he's been fired and say, you're gonna be fired, but can we still act for you in the divorce? In that situation, I think the public interest is served in my view by recognizing that the client's interest and voice should be heard. And their interests are often served by going with the lawyer they trust the most in dealing with the conflict issue otherwise. But I do invite the panel to comment on that. Chris, I think that would fall to you to initially respond to it at least. I mean, I don't think there's any question in that scenario. The likelihood of obtaining consent is pretty negligible. But I think what the Supreme Court said in Neil is that without doubt the prohibition that prevents a firm from taking on that adverse retainer is gonna be a real inconvenience to the firm. And it is going to engender the kind of conversations that Justice Fischot spoke about. But ultimately, the Federation's rule would enable the clients to have some significant input into the end result in that scenario. Just to follow up on that, you mentioned the real inconvenience to the firm. What about the inconvenience to the client? There's no question, absolutely, that these rules will from time to time impact on client choice. That's a reality, and we have to accept that. Regardless of which rules are ultimately adopted and what the nuances are, they're not going to resolve conflicts issues in such a way that we're not going to be pondering over these in the future. We're going to continue having to take a very nuanced approach to conflicts issues in an effort to determine where the interests of clients ought to lay as opposed to those of the lawyers. And certainly there will be instances where clients will be deprived of their choice of counsel. Certainly, I think it was Justice Binney and Neil indicated that the choice of counsel argument is something that really benefits, in fact, the large firms, the mega firms, and leaves the vulnerable, unsophisticated client kind of hanging out there, because you can bet your bottom dollar that the client whose retainer is not going to be accepted will be the unsophisticated client as opposed to the larger institutional client. So I think that's a given, that's a problem that is going to continue, regardless of which rules are put into place. Professor Peyton, did you want to respond to that? I don't have a lot to add other than to reinforce the point that I was making just a little bit earlier that in the English legislation and in the competition bureau's report, consumer choice is paramount. And in terms of client service, I think that's part of access to justice, where we're talking about working with the lawyer that you know and trust and the sense of loyalty in that kind of relationship to be told by a regulator that no, actually, client. There's a conversation to actually talk about what you want to say to your client. I've got to tell my client, no, I can't represent you because there's this rule. I don't agree with it necessarily. I still think I could do a good job for you. I know that I can segregate these interests. You'll be okay with it, but by the way, I can't do it. That's another conversation that I think in terms of looking, the people looking at these rules need to take a much closer look at and to keep in mind. We haven't gone at it from that perspective. The rules don't reflect or start from a position of client or consumer choice. And I think in that regard, at least, the way in which regulation of the legal profession has gone in the Canadian perspective, at least in the last decade, I won't even get into the multidisciplinary practice debate is problematic in that regard. And I think those sorts of illustrations need to be brought forward. Hi, my name is Jenna Waits, and I'm a student here at the law school. My question is for Professor Payton. I was wondering, the courts have told us, and we heard tonight reiterated by Justice Fischot, that the rules pose rule of the CBA and the rule of the Federation of Law Societies and of the Provincial Law Societies aren't binding on the courts. My question is if the CBA's proposed rule is the task force proposed rule is quite a bit more progressive. And if it ends up being adopted by the CBA and if it ends up being considered by courts and rejected, and the CBA in a sense gets its hands slapped, does the CBA risk losing relevance as an institution? And what would the implications of this be for the CBA in terms of its role as the role of lawyers in protecting the public trust, I guess is my question. It's an excellent question, and I think it gets into the question of sort of the politics of the profession, both in terms of the regulation and the role of the CBA in Canada. And I'm again speaking in my personal capacity on this. I think it's something that in terms of the way in which CBA policy gets made, why I emphasize the broad consultation, the fact of the long debate at council and having near unanimous support is a response from the profession that's not just simply, we're protecting the profession's interest, but rather with the public spirit in mind. CBA intervenes regularly on cases. It intervened on Strother, for example, and those interventions I think were noted as being appropriate and helpful in terms of the court arriving at its position. I don't see that stopping. One of the other interesting things by way of history is when the signal was sent that we need some definition, we need some meat on the bones of confidentiality screens. Back in 1993, it was the CBA that came up with the proposed responses for that, and those were largely adopted by the regulators. So I think in terms of the track record of the CBA, contributing to the generation of the law in this area, that's not going to stop. I don't know, in terms of getting its hands slapped, it may be that judges take different perspectives on what the appropriate response is going to be. I don't think that's going to stop the CBA from trying to contribute and be part of this dialogue. What's also interesting is that the CBA's model code of professional conduct is the one that to this point has been adopted directly by a number of different provinces. As we see harmonization, that part of the equation might be changing. I wonder if I can comment on that for a moment, Marjorie, and I'll wave the CBA flag for a moment as well. Certainly in terms of the consultation process, I wouldn't want it to be understood that the Federation of Law Societies did not in fact consult. The Federation of Law Societies established a committee in 2005. That committee spent the better part of three years developing rules, and in the course of that, consisted of representatives from every jurisdiction across the country, and internally within those jurisdictions, there were varying degrees of consultation with members of the profession, so there was certainly consultation at that level. In addition to that, the CBA Task Report that was issued in 2008, as I indicated, is a very well articulated document, and a advisory committee from the Federation was charged with the task of reviewing that report, and considering which, if any, of the proposals in the report ought to be incorporated into the Federation rule. And in fact, there are a significant number of changes that have been made to the Federation rule, which reflect the information that was contained in the CBA report, and so certainly the Federation was informed in that sense in terms of developing the rule by the consultation that was done by the CBA, and there was some significant consultation done by the CBA in the course of generating that report. Thank you. Professor Diane Pocce from the Schulich School of Law has a question. Yes, I was wanting to pick up on the Mr. Smith example. It seems obvious to me that there's a potential conflict when you think, well, if Mr. Smith loses his job, it's gonna impact on his ability to pay child support or whatever. So the starting premise that these are unrelated matters, this is me, it's an example of how unrelated matters can down the line become related. And picking up further on that, as Professor Payton to comment on, how does it promote client choice to say, well, the rules say there's no conflict, therefore I don't need your consent, therefore I don't need to tell you anything about it. How can that promote client choice? We run the risk again of actually oversimplifying, I think what's a more complex set of circumstances, and I appreciate the question, I appreciate the perspective. One of the things that's interesting in terms of the ways in which they grapple with the rules is how much do you need in terms of informing your client and how are indeed matters related? I think the other thing that ends up happening is that the notion of an emerging conflict or a developing conflict isn't necessarily one that we've talked about at all. The fact that there are certain circumstances, even now where under current rules, there are situations that don't appear to be related, that end up being related and law firms have to grapple with getting themselves off the file for one or likely both clients. I lived through that on a number of different occasions in a large sophisticated commercial litigation practice with a lot of really bright people around the table and you just didn't see it coming. And so in that regard, at least, we don't eliminate that issue. I think one of the things that I have certainly advocated along the way and again in my personal capacity is the idea of informed consent. And that respect requires us in terms of disclosure to our clients when retainers are started to say, look, there are these things that end up emerging. I'm going to understand that this is my relationship with you, here's what I'm going to disclose with you, here's what I'm going to have to protect in that regard. And it may well be that we have to have this conversation later on down the road. But in terms of the, I think, the question that was emerging, there is that trust between lawyer and client that underpins and imbues that relationship. And I would turn back to that in the Mr. Smith example that was being provided as your underlying paramount concern. I think, ladies and gentlemen, our time is up. On your behalf, I would like to very much thank Kristen Dangerfield, Professor Paul Payton and Justice Joel Fischow for leading us through the very, very perspectives that can be brought to bear on this complex issue. If your appetite is whetted for more discussion, I would invite you to attend tomorrow's lunch and learn at the Nova Scotia Barrister Society, fourth floor continuing professional development program where Professor Payton and Kristen Dangerfield will continue the debate with respect to this issue. We hope that there will be a good turnout from lawyers in practice and that the lawyers are us. Members will be there to put some more practical examples to the panelists tomorrow as we work our way through this issue. For those members of the Nova Scotia Barrister Society, this issue of the proposed rule is something that is being currently studied through our model code committee chaired by Dan Campbell. Dan has sent out an invitation to all members of the society to put forward their perspectives on the issue. Professor Payton commented on the importance of consultation and certainly while the public consultation is key, so is member consultation and I would urge those practitioners in the room to take part in that consultation as well as law students who will bring your own perspectives to this issue. So please give your input to Dan Campbell and his committee. And just to conclude then, I thank both the Shulik School of Law and the Nova Scotia Barrister Society for their continuing remembrance of Ted Wickwire and the tremendous contribution that he made to legal ethics not only in the province, but really on a national basis. And I think we can see through the discussion today that ethical issues continue to very much play such a huge role in the context of legal practice. So it's been a very relevant discussion. Hopefully it will have influenced the thinking of some in the room about how to approach the issue. And we look forward to your further contributions as we all deal with which rule or which nuance of which rule to adopt and which will ultimately come into play in the province. Thank you again, everyone. Thank you.