S.C.C. Disqualifying a Lawyer Outside of Conflict of Interest

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"...This dispute presents a clash between two competing values — solicitor‑client privilege and the right of a party to select counsel of choice. The conflict here must be resolved on the basis that no one has the right to be represented by counsel who has had access to relevant solicitor‑client confidences in circumstances where such access ought to have been anticipated and, without great difficulty, avoided and where the searching party has failed to rebut the presumption of a resulting risk of prejudice to the party against whom the Anton Piller order was made.

[34]...Parties should be free to litigate their disputes without fear that their opponent has obtained an unfair insight into secrets disclosed in confidence to their legal advisors. The defendant’s witnesses ought not to have to worry in the course of being cross-examined that the cross-examiner’s questions are prompted by information that had earlier been passed in confidence to the defendant’s solicitors. Such a possibility destroys the level playing field and creates a serious risk to the integrity of the administration of justice. To prevent such a danger from arising, the courts must act “swiftly and decisively” as the Divisional Court emphasized. Remedial action in cases such as this is intended to be curative not punitive.

42 In MacDonald Estate, the Court held, in the context of a moving solicitor, that once the opposing firm of solicitors is shown to have received “confidential information attributable to a solicitor and client relationship relevant to the matter at hand” (p. 1260), the court will infer “that lawyers who work together share confidences” (p. 1262) and that this will result in a risk that such confidences will be used to the prejudice of the client, unless the receiving solicitors can show “that the public represented by the reasonably informed person would be satisfied that no use of confidential information would occur” (p. 1260). Only where there is “clear and convincing evidence” (p. 1262) to the contrary will the presumption be rebutted. Thus “[a] fortiori undertakings and conclusory statements in affidavits without more” (p. 1263) will not suffice to rebut the presumption of dissemination. For the purposes of the present case, it is important to note that Sopinka J. imposed no onus on the moving party to adduce any further evidence as to the nature of the confidential information beyond that which was needed to establish that the receiving lawyer had obtained confidential information attributable to a solicitor and client relationship which was relevant to the matter at hand.

54 In my view, the present proceeding should not be seen as punitive in any way. I accept, as did the courts below, that neither Cassels Brock nor Kasowitz set out to obtain access to, or to gain some advantage from privileged material. Their problem stems from carelessness and an excessively adversarial approach in circumstances that called for careful restraint in recognition of the exceptional position of responsibility imposed by the unilateral and intrusive nature of an Anton Piller order. The protection of solicitor-client confidences is a matter of high importance. On the present state of the record, Canadian Bearings can have no confidence that the privileged material to which Cassels Brock and Kasowitz obtained access will not be used to their prejudice.

55 In summary, I agree with the Divisional Court that lawyers who undertake a search under the authority of an Anton Piller order and thereby take possession of relevant confidential information attributable to a solicitor-client relationship, bear the onus of showing there is no real risk such confidences will be used to the prejudice of the defendant. Difficulties of proof compounded by errors in the conduct of the search and its aftermath should fall on the heads of those responsible for the search, not of the party being searched. The onus was not met by the respondents in this case.

66 In view of all the circumstances, I agree with the Divisional Court that Cassels Brock and Kasowitz have not produced sufficient evidence to satisfy the MacDonald Estate test, namely “that the public represented by the reasonably informed person would be satisfied that no use of confidential information would occur” (p. 1260).

67 I also agree with the Divisional Court that the right of Celanese to choose counsel yields to what occurred in the execution of the Anton Piller order in this case and its aftermath, and that “the reasonable perception of the integrity of the administration of justice would be adversely affected were Cassels, Brock . . . permitted to remain solicitors of record for [Celanese]” (para. 42). ...

IV. Disposition

68 The appeal is allowed with costs in this Court. Cassels Brock are removed as solicitors of record for the respondents in these proceedings. They are not to act for or advise the respondents, directly or indirectly, with respect to this proceeding or with respect to any related proceedings arising out of the facts pleaded in the amended statement of claim.

69 Neither the respondents nor anyone on their behalf is to communicate with or receive advice or information directly or indirectly, from Kasowitz with respect to this proceeding or any related proceedings in Canada arising out of or related to the facts pleaded in the amended statement of claim.

70 Any and all materials subject to the claim of privilege still in the possession of the respondents, Cassels Brock or Kasowitz seized from the premises of Canadian Bearings on June 20 and 21, 2003, pursuant to the Anton Piller order shall be returned forthwith to Canadian Bearings without retention of copies whether printed, electronic or of any other type.

71 Kasowitz is to file affidavits satisfactory to the case management judge confirming the existence of adequate firewalls and the destruction or return of all allegedly privileged material that came into its possession as a result of the Anton Piller order made in this case...."