Beyond the General Principles: Special Situations

• Author: Allan C. Hutchinson
• Pages: 182-205

CHAPTER 10

BEYOND THE

GENERAL PRINCIPLES:

SPECIAL SITUATIONS

A recurring theme of this book is that there are no absolutes when it

comes to ethics generally and legal ethics 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

criminal lawyers and prosecutors, the general ethical duties and pro-

fessional responsibilities that I have dealt with apply to all lawyers.

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 scrutiny of the ethical

problems facing negotiators and mediators. The third section tackles

the special demands that are placed on those lawyers who devote their

professional lives to the plight of the disadvantaged and downtrodden.

The fourth section looks at the different circumstances in which gov-

ernment lawyers function and the problems they must resolve. Finally,

the f‌ifth section explores 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 these special situations as they relate

to general principles and guidelines.

182

Beyond the Genera l Principles: Special Sit uations183

A. CORPORATE LAWYERS

In any discussion of ethical and professional responsibilities, it must

be stressed that a corporation is considered a separate entity 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 primary 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 organizations 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 the 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 obtain express clarif‌ication 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 will be representing the corporation as a whole and that

individual agents should seek independent representation (see V, Com-

mentary, s. 5). Although diff‌iculties can arise when lawyers become

involved in the operations of related companies, there is le ss likelihood

of a conf‌lict when it involves a wholly owned subsidiary 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 against 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 typical example 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 instruct the corporations’s law-

yer.1 While such derivative proceedings do not automatically require

separate representation, lawyers should alert all interested parties

1SeeVadecko Internation al Inc. v. Philosophe (1990), 1 O.R. (3d) 87 (Gen. Div.).