“It is settled law that a lawyer can act against a former client, so long as the lawyer does not breach the duty of confidence.
A lawyer also has a limited duty of loyalty to a former client. In particular, even if no confidential information was provided by a former client, a solicitor retained cannot “subsequently take an adversarial position against the client with respect to the same subject matter that he was retained on” (Consulate Ventures, at para. 26).
Further, a lawyer cannot act take “an adversarial position against the former client with respect to the legal work which the lawyer performed for the former client or a matter central to the earlier retainer” (Brookville Carriers Flatbed GP Inc. v. Blackjack Transport Ltd., 2008 NSCA 22 (“Brookville Carriers”), at para. 17.).
Examples of the above instances of a duty of loyalty to former clients are reviewed in detail by Cromwell J.A. (as he then was) in Brookville Carriers. Cromwell J.A. reviewed the example of Credit Suisse First Boston Canada Inc. Re (2004), 2 BLR (4th) 109 (Ont. Sec. Comm.), in which the law firm was in breach of a duty of loyalty because it had given advice to the Toronto Stock Exchange on the establishment of Market Regulation Services and then acted for Credit Suisse and raised defences that attacked that work and advice (Brookville Carriers, at paras. 43-44).
Similarly, Cromwell J.A. reviewed the decision in Chiefs of Ontario v. Ontario (2003), 63 OR (3d) 355 (SCJ) (“Chiefs of Ontario”), in which the law firm acted for the Chiefs of Ontario against a First Nation on casino revenue matters, alleging deception and bribery, when the law firm had acted for that First Nation with respect to the same casino revenue matters (Brookville Carriers, at para. 45).
The duty of loyalty is based on the need to foster and maintain public confidence in the integrity of the legal profession and in the administration of justice (Perell (as he then was) in Conflicts of Interest in the Legal Profession (Toronto, Butterworths: 1995), cited at Brookville Carriers, at para. 48). The duty protects “the confidence of every litigant that their legal advisers will not later attack their honour in matters closely related to their confidential retainers” (Chiefs of Ontario, at para. 112; cited at Brookville Carriers, at para. 45).
In Brookville Carriers, Cromwell J.A. engaged in a thorough review of the law. He held that “the scope of this duty [of loyalty] is very limited absent confidential information being at risk”. Crowell J.A. held that (Brookville Carriers, at para. 51):
Under the principle relevant here, that concerning acting against a former client in a related matter, the focus is different. As the cases and commentators show, the scope of this duty is very limited absent confidential information being at risk. This broader continuing duty of loyalty to former clients is based on the need to protect and to promote public confidence in the legal profession and the administration of justice. What is of concern is the spectre of a lawyer attacking or undermining in a subsequent retainer the legal work which the lawyer did for the former client or of a lawyer effectively changing sides by taking an adversarial position against a former client with respect to a matter that was central to the previous retainer.
Consequently, the scope of a duty of loyalty to former clients is restricted to attacking or undermining in a subsequent retainer the legal work which the lawyer did for the former client or a lawyer effectively changing sides by taking an adversarial position against a former client with respect to a matter that was central to the previous retainer.”