Beyond the General Principles: Special Situations
| Author | Allan C. Hutchinson |
| Pages | 182-205 |
CHAP TER 10
BEYOND THE
GENER AL PRINCIPLES:
SPECIAL SIT UATIONS
A recurring theme of this book is that there are no absolutes when it
comes to ethics generally and legal et hics particularly; what will and
will not amount to a satisfactor y fulfillment of professional responsibi l-
ity is a contextual matter. Up to this point, aside from those involving
crimina l lawyers and prosec utors, the general ethical duties and pro-
fessional responsibilities that I have dealt with apply to all law yers.
However, how these gener al principles and gu idelines work themselve s
out in actual situations will vary considerably. Accordingly, this chap-
ter takes four specia lized areas of legal practice and explores t he ethical
challenges that ar ise. The first section deals with corp orate lawyers and
asks if there is any difference between in-house counsel and outside
lawyers. In the se cond section, the expanding role of alternative di spute
resolution in legal practice necessitates a closer scruti ny of the ethical
problems facing negotiators and mediators. The th ird section tackle s
the special demands that are placed on t hose lawyers who devote their
professional lives to the plight of the disadvantaged and downtrodden.
The fourth section looks at the different circumstances i n which gov-
ernment lawyers f unction and the problems they must resolve. Finally,
the fifth section ex plores the challenges presented to class action law-
yers in dealing with various entities. Throughout the chapter, the em-
phasis is on the ethical details of thes e special situations a s they relate
to general pri nciples and g uidelines.
182
Beyond the Genera l Principles: Special Sit uations 183
A. CORPOR ATE LAWY ERS
In any discus sion of ethical and professional responsibilities, it must
be stressed that a corporation is considered a separate entit y and has a
distinct legal identity from those who own it or run it. Corporate law-
yers must always remember that they work for the corporation itself
and owe their prima ry duties and allegiance to it, and not to any of its
officers, shareholders, employees, or other connected persons (see V,
Commentary, s. 16). Lawyers acting for organiz ations can represent
their constituents, as long as they are in accordance with the rules and
commentaries concerning conflicts of interest (see V, Commentary, s.
16). While they may assume duties to t he corporation’s agents, their
duties to the corporation are paramount and, if there is a conflict, the
duty to the corporation must prevail. Consequently, corporate lawyers
are well advised to obta in express cl arification in their retainers about
who has authority to inst ruct them on the “client’s” behalf. They should
inform agents of the corporation that, in the event of a conflict of in-
terests, they wi ll be representing t he corporation as a whole and that
individual agents should seek independent representation (see V, Com-
mentary, s. 5). Although difficulties can arise when law yers become
involved in the operations of related companies, there is le ss likelihood
of a conflict when it involves a wholly owned subsidiar y or a sister
corporation of the primary corporate client rather th an when there is a
minority interest in an affiliated company.
Nevertheless, there are situations where corporate lawyers should
be particularly on their guard again st possible conflict problems:
• When law yers are asked to repres ent multiple parties in a transaction
where it appears that the par ties have similar interest s, a conflict may
still exist. A t ypical exa mple is where there are “persons forming a
partnership or corporation” (see V, Commentary, s. 15). In such cir-
cumstances, corporate lawyers must be sure to disclose to all parties
the possibility of conflicts (see V, Commentary, ss. 4 and 5).
• The duty of corporate lawyers to shareholders will depend on t he size
of the company and the number of shareholders. For example, in de-
rivative proceedings, shareholders may bring an action on behalf of
the corporation against the alleged misconduct of those controlling
directors and officers who normally i nstruct the corporations’s law-
yer.1 While such derivative proceedings do not automatically require
separate representation, law yers should alert all interested par ties
1See Vadecko Internation al Inc. v. Philosophe (1990), 1 O.R. (3d) 87 (Gen. Div.).
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