This decision of the Divisional Court stems from the defendants’ appeal on a motion to dismiss their request to remove counsel for the plaintiff. The defendants’ asserted that plaintiff’s counsel was in a conflict of interest or, alternatively, a witness at trial. On a motion to remove counsel of record, the court must balance three competing public policy values: the maintenance of high standards of the legal profession and the integrity of our justice system, the right of a litigant’s choice of counsel, and the desirability to permit mobility in the legal profession.
Newton J. of the Divisional Court agreed that the motion was premature and dismissed the defendants’ appeal. The matter was in its early stages with discoveries having not been completed. There was doubt that the plaintiff’s lawyer could be called as a witness given that the evidence could be obtained from other sources. The defendants’ allegations that would place plaintiff’s counsel in conflict invites “unwarranted speculation” and the likelihood of real conflict had not been established. Ultimately, this was a not a “clear case” such that the impact of removing the plaintiff’s counsel of choice was justified.
The Facts
The plaintiff was injured in a car accident in 2008 and retained the defendant law firm to represent him in his tort, accident benefit and long term disability claims. The claims against the long term disability and accident benefit insurer were settled in 2009 and 2011, respectively. In April 2012, the defendants recommended that the plaintiff settle his tort claim for $250,000.00. The plaintiff refused and retained new counsel. In 2013, the plaintiff settled his tort claim for $485,000.00.
In December 2014, the plaintiff brought a new claim against his former counsel for damages, alleging that his claim against the long term disability insurer was settled without his knowledge, that he was pressured into accepting the settlement after the fact, and that the advice he received from the defendants with respect to his accident benefit and long term disability claims was improvident and failed to reflect a proper settlement value. He further alleged that these improvident settlements had a negative impact on the settlement of his tort claim.
The plaintiff died in July 2017. His spouse became the estate trustee. At the time of the motion, pleadings had been exchanged but were not complete, discoveries had not commenced, and expert opinions had not been exchanged.
Issue and Argument
The issue to be decided was whether or not the role of plaintiff’s counsel in the impugned resolution of the plaintiff’s tort action disqualified him and his firm from continuing to act for the plaintiff.
The defendants argued that if the plaintiff failed to recover his full claim for damages in the tort action, it was due to the negligence of the plaintiff’s counsel at the time or a voluntary concession by the plaintiff. Therefore, plaintiff’s counsel is in a conflict of interest or alternatively, a necessary witness.
The plaintiff argued that there is no conflict of interest and his counsel is not a necessary witness at trial. The defendants’ argument is properly characterized as a failure to mitigate with the onus of proof on the defendants. Further, the plaintiff’s spouse was a witness to the interactions between the plaintiff and the defendants and whether or not the settlements were improvident will be the subject of expert evidence.
The Law
The Court has inherent jurisdiction to remove from record solicitors who have a conflict of interest. The general principals to be considered on a motion to disqualify counsel for a conflict of interest were set out in MacDonald Estate v. Martin, [1990] 3 SCR 1235. The court must seek to balance three competing public policy values:
a) the maintenance of high standards of the legal profession and the integrity of our system of justice;
b) the right of a litigant to its choice of counsel, which he or she should not be deprived of without good cause; and
c) the desirability to permit mobility in the legal profession.
The maintenance of high standards of the legal profession and the integrity of our justice system requires that counsel cannot appear as an advocate in cases in which they will be witnesses or be in a conflict of interest with their clients.
In Essa (Township) v. Guergis (1993), 15 OR (3d) 573 (Div Ct), the Division Court outlined a non-exhausted set of factors for a court to consider when deciding whether counsel should be disqualified for being a witness. Those factors include:
a) the stage of the proceedings;
b) the likelihood that the witness will be called;
c) the good faith (or otherwise) of the party making the application;
d) the significance of the evidence to be led;
e) the impact of removing counsel on the parties’ right to be represented by counsel of choice;
f) whether the trial is by judge or jury;
g) the likelihood of a real conflict arising or that the evidence will be tainted;
h) who will call the witness if, for example, there is a probability that counsel will be in a position to cross-examine a favourable witness, a trial judge may rule to prevent that unfair advantage arising; and
i) the connection or relationship between counsel, the prospective witness and the parties involved in the litigation.
In his decision, Newton J. reviewed case law which supports the proposition that where a subsequent lawyer who had completed a matter where it was alleged the former lawyer was negligent, the subsequent lawyer likely has relevant evidence and should be removed as counsel (see Kota v. Raphael, [2003] OJ No 3003, 1298781 and Ontario Inc. et al. v. Levione et al., 2013 ONSC 2894). He also noted case law which stands for the more general proposition that “where there is a significant likelihood that counsel has relevant evidence to give, then counsel should be removed” (See Kitchen v. McMaster, 2018 ONSC 3717 and Battarbee Estate v. Mantha (10 August 2004), Toronto, 03-CV-244964 (S.C.) (unreported judgment of Master Kelly)).
Despite these authorities, Newton J. dismissed the defendants’ appeal. In doing so he relied upon the decision Mazinani v. Bindoo, 2013 ONSC 4744. In Mazinani, Master Glustein (as he was then), “cautions that the decision to deprive a litigant of counsel of choice should not be made prematurely…”. Consideration must be given to a number of factors. Those highlighted by Newton J. can be summarized as follows:
a) Courts should be reluctant to make a premature order preventing lawyers from continuing to act;
b) If the evidence of the lawyer can be obtained through admissions or documentary productions, a removal order is premature;
c) Where there is doubt or “merely a potential” that the lawyer will be called as a witness at trial, the courts should defer the matter until after discoveries or leave it to the trial judge;
d) Considering the “enormous waste of time and money” and potential for substantial delay, courts should only remove counsel in clear cases;
e) A court should be slow to intervene with a litigant’s only to relieve the risk of real mischief and not a mere perception of mischief right to choose his or her own counsel and “”;
f) The moving party must establish that there is a real basis to believe counsel can likely, or probably, provide material evidence;
g) A person’s right to be represented by counsel of their choosing can be outweighed when the administration of justice would be detrimentally affected; and
h) On a motion to remove counsel of record who may be a witness at trial, it should follow a flexible approach and consider each case on its own merits.
Importantly, the majority of the above noted decisions were brought after discovery, when the facts and necessary witnesses had been determined.
Decision
Newton J. found that the analysis of the Essa factors supported the conclusion of the motion’s judge, being that to remove counsel was “premature and would otherwise invite unwarranted speculation that cannot be properly weighed in relation to the plaintiff’s right of counsel of choice”. In considering the Essa factors, he notes finds the following:
a) The matter was in its early stages with discoveries having not been completed.
b) Evidence could be obtained from other sources such as the estate trustee and documentary productions, casting some doubt that plaintiff’s counsel would be called as a witness.
c) This was a not a “clear case” such that the impact of removing the plaintiff’s counsel of choice was justified.
d) The defendants’ allegations that would place plaintiff’s counsel in conflict invites “unwarranted speculation”. The likelihood of real conflict had not been established.
The motion’s judge considered the relevant legal principles, did not misapprehend the evidence and his decision was entitled to deference. The appeal was thus dismissed.
