M Mercer: A Bright Line Rule of Limited Scope

Malcolm Mercer posted to SLAW

A decade ago, the Supreme Court of Canada introduced a new conflicts rule into Canadian law. The rule was fashioned from the ABA Model Rules of Professional Conduct. This new “bright-line rule” generated substantial controversy within the profession. In July, the Supreme Court released its decision in McKercher which both restated and reformulated the “bright line” rule[i].

The “bright-line rule” as first articulated in Neil provided that a lawyer could not act in a matter directly adverse to the immediate interests of a current client without proper consent. The impact of this rule was said to be somewhat limited by the proposition that professional litigants, such as governments and chartered banks, could be taken as “broad-minded” such that their informed consent could be implied. Also, the Court emphasized judicial discretion as to remedy. Not all “bright-line” crossings would have consequences. For example, where a complaint was viewed by the court as tactical, a remedy could be denied.

The policy basis for the “bright-line rule” was reasonably clear. The rule guarded against impairment of client representation. The lawyer-client relationship might be compromised where a lawyer acted in a matter directly adverse to the immediate interests of his or her client. On the other hand, the lawyer might be tempted to “pull punches” so as not to offend the adverse client. The existing “substantial risk” principle might not fully protect against these risks.

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