Ottawa Citizen: Conflict of interest? Questions persist about law firm working for both city and SNC-Lavalin

Joanne Laucius

Questions about the relationship between an outside lawyer hired by the city and SNC-Lavalin has stirred up questions of conflict of interest.

Norton Rose Fulbright, the law firm that advised the city on its LRT Stage 2 project, is the same firm that advises the controversial engineering giant that eventually won the $1.6-billion contract. Geoffrey Gilbert, a procurement

and commercial law expert with the firm, wouldn’t disclose details about the bid scoring to council at a March 6 council meeting — even if council went into a closed session —because of confidentiality provisions of the Stage 2 procurement process.

The matter raised questions for Somerset Coun. Catherine McKenney, who asked why a legal firm that represented the city and had also represented SNC-Lavalin was denying councillors information they were seeking. On Thursday, she said there should be a public declaration of a conflict of interest.

Mayor Jim Watson has not weighed in. On Friday, Watson’s press assistant said he was away from city hall and would return next week.

But, in answering whether there is any potential conflict of interest in a legal sense, there are gaps in information about the relationship between the law firm, the city and SNC-Lavalin, said Brooke MacKenzie, a Toronto lawyer and adjunct professor of legal ethics at Osgoode Hall Law School.

The first unanswered question is whether SNC-Lavalin is a current client or former client, MacKenzie said. “In the practice of law, they fall into different categories.”

A relationship between a lawyer and a client can be terminated if a matter is concluded, but the duty to protect a former client’s confidential information remains. However, the duty of loyalty owed to a former client is minimal. The duty of loyalty is typically owed only to current clients, she said.

Lawyers also have a duty of candour to current clients. This means the lawyer should inform the client of any information that he or she knows to be relevant to the retainer. A lawyer may have a duty of confidentiality to a former client and a duty of candour to a current client. If there is anything known to the lawyer that could pose problems, that should ideally be disclosed to the new client at the outset, MacKenzie said. A lawyer can can also obtain the former client’s consent to act on a new matter. When a client waives their rights, it must be  done carefully and in an informed way.

The second question is whether the lawyer is acting on related or unrelated matters when it comes to the two clients. If the matters are unrelated, it’s unlikely there’s a conflict interest, MacKenzie said.

Lawyers can act for two companies who compete in the same industry if they don’t have direct adverse interests. An example of adverse interests would be if both parties bid for the same contract, she said.

A lawyer should also not be put in a position where they could prefer the interests of one current client at the expense of another. However, generally speaking, conflict of interest does not preclude a lawyer from acting for two clients in the same line of business or competing for business, she said.

Meanwhile, large law firms often have “screens” that segregate lawyers who have worked on previous matters from those who work on current matters to prevent conflicts of interest. The lawyers may have separate offices or work in different cities. Paper files may be locked and electronic information may not be accessible between those working on different sides of the screen.

“An important part of it is informing the lawyers involved and getting an undertaking that they don’t discuss these matters with their colleagues,” MacKenzie said. “Clients need to have confidence that information is kept confidential and will not used against them in the future.”

In a statement to this newspaper this week, O-Train construction director Michael Morgan said Norton Rose Fulbright won the Stage 2 legal contract after a competitive process in 2016. The law firm had to disclose actual or potential conflicts of interest and was cleared by the independent fairness commissioner, he said.

The city was “fully aware” Norton Rose Fulbright had advised other private organizations, including SNC, on unrelated matters. It didn’t create a conflict of interest in the Stage 2 procurement, Morgan said.

MacKenzie said the fairness commissioner would view the matter from the perspective of the municipal government, not that of legal professional regulation.

Every lawyer is regulated by the law society of his or her province. Conflicts of interest are addressed and regulated by law societies’ rules of professional conduct. If there is a breach, lawyers may be subject to discipline or may be removed from acting on a particular matter. Checking for conflicts is an important part of a law firm administration, MacKenzie said.

“On the surface, it’s understandable that the public has questions. But, before drawing any conclusions, we need to get more information,” she said. “Lawyers are generally careful to avoid conflicts of interest.”

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