“In addition to a duty of confidence, a lawyer owes former clients a limited duty of loyalty not to act against them. I address the applicable law and relevant evidence below.
a) The applicable law
In McKercher, McLachlin CJ, relying on the decision of the Supreme Court in R. v. Neil, 2002 SCC 70, distinguished between the law of conflicts and a duty of loyalty.
With respect to the “law of conflicts”, McLachlin CJ held that a lawyer’s main duty to a former client is to refrain from using confidential information. McLachlin CJ held (McKercher, at para. 23):
The law of conflicts is mainly concerned with two types of prejudice: prejudice as a result of the lawyer’s misuse of confidential information obtained from a client; and prejudice arising where the lawyer “soft peddles” his representation of a client in order to serve his own interests, those of another client, or those of a third person. As regards these concerns, the law distinguishes between former clients and current clients. The lawyer’s main duty to a former client is to refrain from misusing confidential information. With respect to a current client, for whom representation is ongoing, the lawyer must neither misuse confidential information, nor place himself in a situation that jeopardizes effective representation.
With respect to the duty of loyalty to an existing client, a law firm cannot act for a current client whose interests are directly adverse to the immediate interests of another client, even if the two mandates are unrelated, unless both clients consent and the law firm reasonably believes it can represent each client without adversely affecting the other (McKercher, at para. 27). This duty of loyalty protects against the risk that a lawyer might “soft peddle” his or her representation of a client in order to serve the lawyer’s interests (McKercher, at paras. 23, 27).”