The issues surrounding conflict of interest were brought to the forefront in a recent case before the Alberta Court of Queen’s Bench.
In Dow Chemical Canada Inc. v. Nova Chemicals Corp., Nova retained Osler Hoskin & Harcourt LLP and Macleod Dixon LLP. Dow initially retained Burnet Duckworth & Palmer LLP and then sought Bennett Jones LLP. The question regarding a possible conflict of interest arose after Andrew Little, then a partner at Oslers in Calgary who was responsible for representing Nova’s interests, joined Bennett Jones in Toronto.
“When I engage a lawyer to prosecute a dispute on behalf of NOVA Chemicals, I do not expect that lawyer to join our enemy’s law firm,” Nova stated in an affidavit. “It should be important that not only justice should be done, but that justice should be seen to be done.”
The court said the larger question is whether the public would be satisfied that there would be no use of confidential information.
In his judgment issued Aug. 12, Chief Justice Neil Wittmann recognized that Little was in possession of confidential information that would be prejudicial to Nova if disclosed to Bennett Jones. He found that Little signed an undertaking before joining Bennett Jones swearing to keep the details of Nova’s retainer confidential, but that alone was not sufficient.
“Perhaps the test might be better stated by suggesting that statements under oath or affirmation are an essential part of the continuance of a retainer or acceptance of a new retainer in the circumstances of a moving lawyer with prejudicial confidential information, but that alone is not enough,” said Wittmann. “Screening devices are also necessary, absent consent of the other party or parties.”
After consideration of Bennett Jones’ additional safeguards — which included all team members signing undertakings not to disclose information, making electronic files accessible only to those working on the case, and putting an ethical wall in place — and the circumstances of the case, Wittmann ruled there was no conflict of interest.
“Further, [Dow’s general counsel] stated that at the time Dow retained Bennett Jones, it was unaware that a former counsel to Nova in the litigation was a current partner in the Toronto office of Bennett Jones, that no representative of Dow has had any contact with Andrew Little with respect to Nova since he joined Bennett Jones, nor would they contact him in the future,” Wittmann said in the ruling.
On the University of Calgary Faculty of Law’s blog, professor Alice Woolley provides more detail on the case: “Specifically, Chief Justice Wittmann’s judgment provides new analysis of the principles governing what is necessary for a client to consent to a conflict in advance, how imputation rules operate in national firms, lawyers transferring between law firms, and the intersection between law society rules and judicial determinations in assessing conflicts.”