This Week in Legal Ethics – New Conduct Review Ruling

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LegalEthicsBannerBy Melanie Hodges Neufeld

As I mentioned in a previous post, the fact situation and outcome of Conduct Reviews are published anonymously on the Law Society website in our Conduct Review Database. A Conduct Review is a face to face meeting with a member who is the subject of a complaint that raises conduct issues ‘close to the line’ of conduct unbecoming. The meeting is meant to assist the member identify and accept responsibility for the conduct that caused concern, to learn from the complaint and Conduct Review, and to change their conduct to proactively prevent similar situations in the future. The Conduct Reviews are published to provide guidance to the profession. Below is a recent Conduct Review:

Category:   Conflicts; Duty to Avoid Conflicts of Interest; Consent; Acting Against Former Clients; Responsibility to Lawyers and Others; Communications; Communicating Directing with Represented Party
Practice Area:   Real Estate; Wills and Estates; Declaration of Trust; Family Law; Interspousal Agreements
Code:   “conflict of interest”; 2.04(1); 2.04(2); 2.04(10); 6.02(6)
E-cite:   2016 SKLSCR  1     
Date:   July 14, 2016


The Member was retained by the Complainant to represent her interests in the sale of her family home and purchase of a new condominium. Previously, the Member had represented the Complainant’s late husband (the “Husband”) to prepare an interspousal agreement between the Husband and the Complainant, and amendment to that interspousal agreement some years later, a Last Will and Testament, and a Loan Declaration. A common theme in all documents the Member prepared for the Husband was that the Complainant’s interest in the family home was limited. The Complainant was represented by her own lawyer for the preparation and execution of all these documents.

Notably, the Husband’s Will contained a clause that provided the Complainant with a life interest in their family home and a provision that the joint line-of-credit registered against the home would be paid from the proceeds of the Husband’s estate.

The Husband died and the Member did not handle his estate. Most of the terms of the Husband’s Will were satisfied, except that the line-of-credit was not paid out, because there were insufficient funds in the estate to do so. As a result, the line-of-credit remained attached to the title of the family home.

After some time, the Complainant approached the Member to review purchase documents for a new condominium and expressed her interest in selling the family home. Aware of the provisions of the Husband’s Will, which placed clear constraints upon the Complainant’s ability to sell the home, the Member began to communicate with the adult children of the Husband, who were the beneficiaries of the Husband’s interest in the family home. A series of telephone conversations, emails, and preparation of draft documents ensued and the Member communicated directly with the Husband’s beneficiaries, the Complainant’s financial advisor, and the Complainant herself. One of the estate beneficiaries retained independent counsel and ultimately an agreement was reached which facilitated sale of the family home and the Complainant’s purchase of a new condominium with a Declaration of Trust (in favour of the beneficiaries) and registration of a Miscellaneous Interest on title to the Complainant’s new condominium.

Sometime later, the Complainant attended the Member’s office to discuss concerns over her ability to continue to afford the condominium, and that the Declaration of Trust prevented her from refinancing. After the meeting ended abruptly, the Complainant retained new counsel who she instructed to attempt to remove the Miscellaneous Interest. The Complainant also filed her complaint with the Law Society of Saskatchewan.

The Conduct Investigation Committee reviewed the matter and determined that:

  • There was no conflict of interest, as the Complainant’s interests were not directly adverse to the immediate legal interests of another client. The Member never represented the estate beneficiaries, whose interests ultimately became adverse to that of the Complainant. The Member only represented the Complainant.
  • There was no breach of the duty of loyalty to the Member’s former client, the Husband. The Member conducted herself appropriately and with due diligence. She advised the Complainant in a manner consistent with her previous retainer, while also advising and acting in the interest of the Complainant.
  • The Member acted appropriately in preparing the documents and advising the Complainant. When the expectations of the Complainant and the estate beneficiaries began to clash, the Member encouraged the beneficiaries to obtain independent counsel. The Member was careful not to provide the beneficiaries with legal advice.
  • Once the Member was advised that at least one of the estate beneficiaries had retained a lawyer, the Member should have directed all communication for that beneficiary to the lawyer. Even though the Member was directed by the Complainant to continue communicating directly with both estate beneficiaries, the Member erred in doing so.
  • Poor communication appeared to be at the heart of this solicitor-client relationship. The Member might have better managed or tried to understand the Complainant’s expectation. This could have prevented the acrimonious parting. However, the Complainant’s complaint that the Member acted rudely or unprofessionally was not meritorious.

The Conduct Investigation Committee directed no further actions with regard to the conflict of interest and rudeness complaints.

The Conduct Investigation Committee recommended a “Conduct Review” be initiated to review her decision to continue dealing with the estate beneficiaries after she became aware that at least one of them had retained a lawyer.

The Conduct Review Committee met with the Member to review her conduct. While discussing the issues, the Member indicated, for the first time, that she had received authorization from the beneficiary’s lawyer to contact her client directly.

In light of the new information, the Conduct Review Committee directed Complaints Counsel to contact the lawyer to confirm whether such an authorization was given. The lawyer had no notes or independent personal recollection about any discussions occurred regarding the Member contacting the represented arty directly. However, the lawyer believed she would have been clear that she was on a limited retainer, given her client’s desire to minimize legal fees as much as possible. Consequently, the lawyer advised that she probably expected the member would be communicating directly with her client.

This new information alleviated some of the Conduct Review Committee’s concerns that the member directly contacted a represented party. The Conduct Review Committee was satisfied that the Member’s error was not as significant as it initially appeared during investigation.

If such a situation arises in the future, the Member must take active steps to obtain authorization of counsel prior to communicating with a represented party. The Conduct Review Committee notes that best practice is to ensure that authorization for such direct contact be confirmed in writing.

With the above recommendations, the Conduct Review Committee determined no further action was required.


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