HUMAN RIGHTS TRIBUNAL OF ONTARIO
B E T W E E N:
Krystyna Lukasik Applicant
-and-
611554 Ontario Inc. o/a Palm’s Court Restaurant and Nick Andreopoulos Respondents
INTERIM DECISION
Adjudicator: Brian Cook Date: January 22, 2013 Citation: 2013 HRTO 115 Indexed as: Lukasik v. 611554 Ontario Inc. o/a Palm’s Court Restaurant
WRITTEN SUBMISSIONS
Krystyna Lukasik, Applicant Randy Ai, Counsel
611554 Ontario Inc. and Nick Andreopoulos, Respondents Ellen Low, Counsel
INTRODUCTION
1This Interim Decision addresses the applicant’s motion seeking removal of the respondents’ counsel because of an alleged conflict of interest. The alleged conflict arises from a change in law firms by Daniel Chodos, a lawyer, from the firm that represents the applicant, to the firm that now represents the respondents.
BACKGROUND
2As noted in an earlier Case Assessment Direction, the Application was filed on August 3, 2010. At the time the applicant was self-represented. The Application was served on the respondents. The Response identified that the respondents’ representative was Tyler McLean, a lawyer at the firm of McLean & McLean.
3The applicant filed a Reply in October 2010 and by that time she was represented by Christopher Chenoweth, a lawyer with the law firm Kuretzky Vassos Henderson LLP.
4The respondents were subsequently represented by Ayoob Khan, a paralegal. On June 4, 2012, the respondents retained Ellen Low, a lawyer with the law firm Whitten & Lublin LLP.
5On or about June 18, 2012, Daniel Chodos, a lawyer, changed law firms from Kuretzky Vasssos Henderson LLP to Whitten & Lublin LLP. He thus changed firms from the firm representing the applicant, to the firm representing the respondents.
6According to the applicant, Mr. Chodos was actively involved in her case. He had carriage of the file and interviewed the applicant. He prepared the transfer memo when he left the firm.
7The Application alleges that the respondents discriminated against the applicant on the basis of disability when her hours of work were reduced after she returned from a medical leave in March 2008 and that her hours were further reduced in 2009 until the respondent’s business closed in August 2009.
APPLICABLE LAW
8In MacDonald Estate v. Martin, 1990 CanLII 32 (SCC), the Supreme Court of Canada considered a case dealing with whether a lawyer changing law firms resulted in a conflict of interest, summarized as follows:
Appellant's solicitor was assisted by a junior member of his firm who was actively engaged in the case and was privy to many confidences disclosed by appellant to his solicitor. The junior member later joined the law firm which represents respondent in this action.
9In that case, the Court concluded that these circumstances created a conflict of interest that warranted removal of the respondent’s counsel.
10Writing for the majority of the Court, Sopinka J. stated as follows with respect to the appropriate questions to ask to determine whether a conflict of interest has arisen that would warrant the removal of counsel:
Typically, these cases require two questions to be answered:
(1) Did the lawyer receive confidential information attributable to a solicitor and client relationship relevant to the matter at hand?
(2) Is there a risk that it will be used to the prejudice of the client?
11In respect of the first question, Sopinka J. said:
In my opinion, once it is shown by the client that there existed a previous relationship which is sufficiently related to the retainer from which it is sought to remove the solicitor, the court should infer that confidential information was imparted unless the solicitor satisfies the court that no information was imparted which could be relevant. This will be a difficult burden to discharge. Not only must the court's degree of satisfaction be such that it would withstand the scrutiny of the reasonably informed member of the public that no such information passed, but the burden must be discharged without revealing the specifics of the privileged communication. Nonetheless, I am of the opinion that the door should not be shut completely on a solicitor who wishes to discharge this heavy burden.
12With respect to the second question, Sopinka J. noted that absent consent of the parties, it is clear that the lawyer who has been involved in one party’s case and who changes firms may not personally act for the other party. He then discussed whether other lawyers in the new firm are prohibited from representing the other party:
The answer is less clear with respect to the partners or associates in the firm. Some courts have applied the concept of imputed knowledge. This assumes that the knowledge of one member of the firm is the knowledge of all. If one lawyer cannot act, no member of the firm can act. This is a rule that has been applied by some law firms as their particular brand of ethics. While this is commendable and is to be encouraged, it is, in my opinion, an assumption which is unrealistic in the era of the mega-firm. Furthermore, if the presumption that the knowledge of one is the knowledge of all is to be applied, it must be applied with respect to both the former firm and the firm which the moving lawyer joins. Thus there is a conflict with respect to every matter handled by the old firm that has a substantial relationship with any matter handled by the new firm irrespective of whether the moving lawyer had any involvement with it. This is the "overkill" which has drawn so much criticism in the United States to which I have referred above.
Moreover, I am not convinced that a reasonable member of the public would necessarily conclude that confidences are likely to be disclosed in every case despite institutional efforts to prevent it. There is, however, a strong inference that lawyers who work together share confidences. In answering this question, the court should therefore draw the inference, unless satisfied on the basis of clear and convincing evidence, that all reasonable measures have been taken to ensure that no disclosure will occur by the "tainted" lawyer to the member or members of the firm who are engaged against the former client. Such reasonable measures would include institutional mechanisms such as Chinese Walls and cones of silence.
13Sopinka J. noted that in 1990, at the time of the decision, such “institutional mechanisms” were not commonplace and recommended that governing bodies, such as the Law Society of Upper Canada, develop guidelines. As discussed below, such guidelines have now been adopted.
14Sopinka J. thus proposed two rebuttable presumptions. The first is that it can be presumed that a lawyer involved with a case will have relevant information from that involvement. The lawyer may be able to rebut this presumption but Sopinka J. described this as “a heavy burden to discharge.”
15The second presumption is that the lawyer who changes firms after having involvement with the case will share information about the case with colleagues in the new firm who are representing the opposing party. This presumption can be rebutted with “clear and convincing evidence, that all reasonable measures have been taken to ensure that no disclosure will occur by the "’tainted’ lawyer to the member or members of the firm who are engaged against the former client.”
16The minority of the Court adopted a somewhat different stance. Writing for the minority, Cory, J. proposed an irrebuttable rather than a rebuttable presumption:
Where a lawyer who has had a substantial involvement with a client in an ongoing contentious matter joins another law firm which is acting for an opposing party, there is an irrebuttable presumption that the knowledge of such lawyer, including confidential information disclosed to him or her by the former client, has become the knowledge of the new firm. Such an irrebuttable presumption is essential to preserve public confidence in the administration of justice.
Law Society of Upper Canada Rules of Professional Conduct
17As noted, subsequent to MacDonald Estate, the Law Society of Upper Canada (LSUC) and the equivalent bodies in other provinces, adopted rules and guidelines for lawyers that address what steps should be taken when a lawyer changes firms in circumstances that might give rise to a conflict of interest. Rule 2.05 of the LSUC Rules of Professional Conduct, Conflict From Transfer Between Law Firms, addresses this issue. Subrule (4) provides:
(4) Where the transferring lawyer actually possesses relevant information respecting the former client that is confidential and that, if disclosed to a member of the new law firm, may prejudice the former client, the new law firm shall cease its representation of its client in that matter unless
(a) the former client consents to the new law firm's continued representation of its client, or
(b) the new law firm establishes that it is in the interests of justice that it act in the matter, having regard to all relevant circumstances, including,
(i) the adequacy and timing of the measures taken to ensure that no disclosure to any member of the new law firm of the former client's confidential information will occur,
(ii) the extent of prejudice to any party,
(iii) the good faith of the parties,
(iv) the availability of suitable alternative counsel, and
(v) issues affecting the public interest.
18The Rule goes on to provide Guidelines to ensure non-disclosure of confidential information. These Guidelines are intended “as a checklist of relevant factors to be considered.” However, the Rule provides that “Adoption of only some of the guidelines may be adequate in some cases, while adoption of them all may not be sufficient in others”.
19The Guidelines provide as follows:
GUIDELINES
The screened lawyer should have no involvement in the new law firm's representation of its client.
The screened lawyer should not discuss the current matter or any information relating to the representation of the former client (the two may be identical) with anyone else in the new law firm.
No member of the new law firm should discuss the current matter or the previous representation with the screened lawyer.
The current matter should be discussed only within the limited group that is working on the matter.
The files of the current client, including computer files, should be physically segregated from the new law firm's regular filing system, specifically identified, and accessible only to those lawyers and support staff in the new law firm who are working on the matter or who require access for other specifically identified and approved reasons.
No member of the new law firm should show the screened lawyer any documents relating to the current representation.
The measures taken by the new law firm to screen the transferring lawyer should be stated in a written policy explained to all lawyers and support staff within the firm, supported by an admonition that violation of the policy will result in sanctions, up to and including dismissal.
Undertakings should be provided by the appropriate law firm members setting out that they have adhered to and will continue to adhere to all elements of the screen.
The former client, or if the former client is represented in that matter by a lawyer, that lawyer, should be advised
(a) that the screened lawyer is now with the new law firm, which represents the current client, and
(b) of the measures adopted by the new law firm to ensure that there will be no disclosure of confidential information.
The screened lawyer’s office or work station and that of the lawyer’s support staff should be located away from the offices or work stations of lawyers and support staff working on the matter.
The screened lawyer should use associates and support staff different from those working on the current matter.
In the case of law firms with multiple offices, consideration should be given to referring conduct of the matter to counsel in another office.
20Subrule (9) of Rule 2.05 provides:
Anyone who has an interest in, or who represents a party in, a matter referred to in this rule may apply to a tribunal of competent jurisdiction for a determination of any aspect of this rule.
Submissions of the parties
21Counsel for the respondents, Ms. Low, submits that her firm, Whitten & Lublin, implemented “almost all of the Disqualification Guidelines” provided in the LSUC Rule 2.05.
22In particular:
- Mr. Chodos has had no involvement in Whitten & Lublin’s representation of the respondents.
- Mr. Chodos has not discussed the matter of representation with anyone at Whitten & Lublin. Lawyers and staff at Whitten & Lublin have been advised not to speak with Mr. Chodos about the file, and the matter is only to be discussed by the lawyers actually working on the file. Further, Mr. Chodos is not to see or have access to any documents relating to the current representation.
- The physical and electronic files are segregated from Mr. Chodos.
- Mr. Chodos works with separate support staff and his physical office is separated from the lawyers working on the file.
- Opposing counsel has been advised that Mr. Chodos is employed with Whitten & Lublin and opposing counsel was advised of the measures implemented by Whitten & Lublin to ensure that no confidential information would be disclosed.
23These assertions and measures adopted by the respondents as outlined above are supported by Affidavits sworn by Daniel Chodos and Lisa Purchase. Ms. Purchase is a legal assistant with Whitten & Lublin.
24Ms. Low notes that Whitten & Lublin was retained by the respondents before Mr. Chodos joined the firm and that the measures described above were in place when Mr. Chodos joined the firm.
25Ms. Low concedes that her firm, Whitten & Lubin, did not confirm the measures that were taken in the form of a written policy as required by item 7 in the Guidelines. However, she states that the policy was clearly verbally communicated to all concerned prior to Mr. Chodos joining the firm. Ms. Low submits that the applicant may have waived her right to raise the alleged conflict of interest. She states that the applicant’s counsel did not raise the alleged conflict until about two weeks after it was advised by Whitten & Lublin that Mr. Chodos had joined the firm and then the applicant’s counsel did not pursue the matter until shortly before the hearing in August 2012.
26Ms. Low further suggests that the applicant’s request to remove the respondents’ counsel may be an attempt to gain a strategic advantage in the litigation. She notes that the Courts have been concerned that a party may raise allegations of conflict of interest for this purpose and asks the Tribunal to be similarly wary, and cites Hermant v. Secord, 2010 ONSC 6444.
27On behalf of the applicant, Mr. Ai submits that the applicant has bona fide reasons for raising the conflict of interest concern. Mr. Ai relies on MacDonald Estate, the Supreme Court of Canada decision discussed above. He relies in particular on the minority opinion, noted earlier, which proposed an irrebuttable presumption in cases such as this so that it should be irrebuttably presumed that Mr. Chodos has shared confidential information with the lawyers at Whitten & Lublin who are representing the respondents, and there is therefore necessarily a conflict of interest.
CONCLUSIONS
28According to the majority of the Supreme Court of Canada in MacDonald Estate, the facts of this case give rise to two questions, both of which contain a rebuttable presumption.
29The first question is whether Mr. Chodos received “confidential information attributable to a solicitor and client relationship” relevant to the Application. The applicant alleges that she discussed the Application with Mr. Chodos when he was still with the law firm that was representing her, namely, Kuretzky Vassos Henderson. This is not contested by Whitten & Lublin, the firm representing the respondents. Mr. Chodos therefore very likely received confidential information about the Application in the context of a solicitor and client relationship.
30The second question is whether there is a risk that the confidential information obtained by Mr. Chodos was or will be used to the prejudice of the applicant. In assessing this question, it is to be presumed that Mr. Chodos spoke to his new colleagues about the case and shared the information he obtained from the applicant with his new colleagues. This presumption may only be rebutted by “clear and convincing evidence” that all reasonable measures have been taken to ensure that no disclosure has or will be made by Mr. Chodos to his new colleagues about the case.
31Subsequent to the Court’s decision in MacDonald Estate, the Law Society of Upper Canada developed guidelines which are designed to provide a form of checklist of the measures that should be taken to ensure that no disclosure is made by the new lawyer. As the Law Society of Upper Canada Rules make clear, the Guidelines are not intended to provide a complete answer or rebuttal to the presumption described in MacDonald Estate. As noted, the Rule provides that “adoption of only some of the guidelines may be adequate in some cases, while adoption of them all may not be sufficient in others.”
32According to the information provided by Whitten & Lublin, the firm put in place almost all of the measures set out in the Guidelines. It did not confirm, in the form of a written policy, the measures that were taken to ensure that Mr. Chodos did not disclose information about the case although the measures were verbally communicated. According to Whitten & Lublin, it is a relatively small firm, comprising approximately seven lawyers and staff. In these circumstances, I agree with the respondents that the need for a case-specific written policy is not as important as it might be in a large firm. In a small firm, verbal communication is likely to be effectively received by all concerned, which may not happen in a large firm.
33On the basis of the information provided by Whitten & Lublin, I am satisfied that it took adequate and timely measures to ensure that Mr. Chodos would not disclose confidential information relevant to the Application to lawyers or staff at Whitten & Lublin.
34The information provided by Whitten & Lublin has been confirmed in sworn affidavits. In the circumstances of this case, I have no reason to doubt the veracity of the affidavits.
35The Law Society of Upper Canada Rule 2.05 subrule (4), Law Firm Disqualification, provides that other considerations include the extent of prejudice to any party, the availability of suitable alternative counsel, and issues affecting the public interest.
36Since the case is not legally or factually complex, the respondents would not be significantly prejudiced if they were required to retain new counsel. However, some prejudice would clearly result.
37In my view, both parties have acted in good faith in this matter. The applicant raised the concern in a timely manner. While the alleged conflict of interest was not consistently pursued, the parties were pursuing other matters related to the Application. I accept that the applicant was genuinely troubled by the fact that a lawyer she had talked to in confidence changed to the respondents’ law firm only a few weeks after she spoke to him. At the same time, Whitten & Lublin showed good faith in providing timely information to the applicant’s counsel about the measures that had been taken to protect the confidentiality of the applicant’s information.
38Apart from the general interest in preserving public confidence in the administration of justice, it does not appear that there are any further issues affecting the public interest in this case to warrant the removal of respondents’ counsel.
DECISION
39In considering the available information as described above, I am satisfied that there is no reason to remove the respondents’ counsel because of an alleged conflict of interest.
40The hearing in this matter will now proceed. The Tribunal will schedule a one-day oral hearing to hear evidence and submissions from the applicant and the respondents on the merits of the Application.
Dated at Toronto, this 22nd day of January, 2013.
“Signed by”
Brian Cook Vice-chair