Summary Judgment Motion
The defendant principal of the new firm brought a summary judgment motion seeking to have the action against him dismissed on the basis that the plaintiff (the principal of the associate's former firm) failed to show (and could not show) "knowing assistance" in the associate's alleged breaches. Justice Gordon noted that solely for the purpose of the summary judgment motion, he assumed that the plaintiff had met the threshold of proving that the associate had breached "some duty" owed to the principal of her former firm. Whether she actually did or not, however, was "a matter for another day".
In his analysis of the legal issue, Justice Gordon reviewed certain guidelines provided by the Law Society of Upper Canada (dated 2009) concerning a lawyer's professional obligations when leaving a law firm. In summary, those guidelines provide that:
- the client's rights are paramount;
- while the law firm and the lawyer have an interest in the file, and a duty to maintain proper records, it is the client's file;
- the client has the right to choose legal representation and to change that legal representation at any time;
- there is nothing improper for a departing lawyer to contact a client to tell them they are leaving (in fact there is a duty to do so), however, contacting the client for the purpose of solicitation of a retainer is not permitted;
- the law firm and the departing lawyer have a joint and individual duty to keep the client informed;
- the client must be told in a timely manner that the lawyer with whom he or she has been dealing is leaving the law firm;
- client must be told of the options for continued representation by i) the law firm; ii) the departing lawyer; or iii) a new lawyer chosen by the client;
- the recommended procedure is for the law firm and the departing lawyer to agree on how and when the client is to be notified;
- failing such agreement, the departing lawyer should advise the client in a neutral manner of the departure and the client's options;
- the law firm and departing lawyer must not abandon the client;
- a client who chooses to follow the departing lawyer should confirm his or her wishes in writing and provide a direction to the law firm regarding the transfer of the file and any funds in trust; and
- the departing lawyer should consider providing an undertaking to the law firm to protect the firm's account to facilitate the file transfer.
In this particular case, the plaintiff could only be successful in a claim in "knowing assistance" against the principal of the associate's new law firm if the following elements were met:
a) there was a trust;
b) the new principal had knowledge of the trust;
c) the associate perpetrated a dishonest and fraudulent breach of trust; and
d) the principal had actual knowledge of, or was wilfully blind to, and participated in the associate's dishonest and fraudulent breach of trust.
The defendant testified that he advised the associate that she must abide by the Law Society guidelines and specifically her duty to inform her clients. This evidence was uncontradicted. The Court noted that if there was "more or better evidence, it should have been tendered on this motion."
Justice Gordon concluded that there was no evidence to support an allegation of "knowing assistance" either in the form of actual knowledge or wilful blindness: "Indeed the evidence is to the contrary. It was unchallenged that [the new principal] was well aware of the lawyer's duty to inform clients on leaving a firm and the manner in presenting the options for the client. . .On this evidentiary record, I conclude [the new principal] did all that was required."
The motion for summary judgment dismissing the action as against the new principal was granted.
Do you know all of your professional obligations when leaving a law firm? It appears that the LSUC's guide referenced in this case "Leaving a Law or Legal Services Firm" (Dated 2009) is no longer available on its website. However, the guide "Closing Down Your Practice" also provides some useful tips.
If you are interested in case summaries for your website or blog please contact me.
 Robert Findlay Law Office Professional Corporation v. Werner et al 2015 ONSC 2955.
 Ibid. at para. 12.
 Ibid. at para. 15 & 23-27.
 Ibid. at paras. 30.
 Ibid. at para. 49.