Medical Malpractice Law Firms Owe a Duty of Loyalty

Medical Malpractice Law Firms Owe a Duty of Loyalty

A decision of great practical importance for medical malpractice law firms was recently released.

In Bulloch-MacIntosh et al. v. Browne et al., 2015 ONSC 1622 (CanLII) the court ruled that a law firm could not continue to represent a defendant. The reason was that it had previously represented a co-defendant in the same litigation.

The decision engaged the duty to keep information confidential and the duty of loyalty. These duties made it unlikely that the trial could proceed in a fair manner. Noteworthy was the fact that the plaintiff and not the co-defendant  sought the relief. The prejudice that would result from a mistrial would of course affect the plaintiff.

In most medical malpractice cases a single law firm will represent many defendant physicians. This decision opens the door to plaintiffs seeking orders removing defence counsel at an early stage of malpractice litigation. Currently in Ontario only 4 medical malpractice law firms receive most of this work.

The strategy of divide and conquer is tried and proven. Applying this strategy may result in more medical malpractice law firms receiving defence work. Whether this affects quality of representation or changes the approach to pre-trial settlement cannot be foreseen.

Medical Malpractice Case Fact Summary

A plaintiff sued two oral surgeons over jaw implant surgery. Dr. B performed the original surgery in 1977. Dr. B. then left the country. Dr. E. took over the care of the plaintiff from 1978 to 1996.

The plaintiff alleged negligence in both the original surgery and the after care.

The doctors each retained the same defence medical malpractice law firm to represent them. After representing Dr. B. for 12 years the law firm obtained an order in 2011 removing itself as his lawyers of record.

When Dr. B first retained the law firm in 1999 he agreed that if a conflict of interest arose between himself and Dr. E that the law firm could continue to act for Dr. E. Yet when the law firm obtained the order removing it as lawyers of record it agreed that it would not act in a manner adverse to Dr. B’s immediate interests.

In 2014 Dr. B learned of a conflict of interest between himself and Dr. E. He took steps to make a cross-claim against Dr. E. Dr. B. also felt that the law firm should have advanced a defence on his behalf that the plaintiff’s action had not started on time.

Before trial the plaintiff asked for an order removing the defendant’s medical malpractice law firm as lawyers of record for Dr. E. The plaintiff took the position that on account of the conflict there was a likelihood of a mistrial.

The Malpractice Lawyer’s Obligations of Confidentiality and Loyalty

There was an issue about whether the law firm received confidential information from Dr. B. If it had and if the court concluded that there was a risk that it would be used against the former client. This would then meet the test for disqualification of the law firm.

The court focused on the duty of loyalty. This duty goes beyond the duty not to disclose confidential information. The duty of loyalty requires the lawyer to give his exclusive undivided attention to the interests of the client.

The duty of loyalty applies not only to current clients but also to former clients. This is so as it involves the public’s confidence in the administration of justice.

A lawyer’s obligation, whether described as a duty of loyalty owed to a former client, or as a professional obligation to promote public confidence in the legal profession and the administration of justice dictates that a lawyer cannot act against his former client.

In the court’s view it would be difficult, if not impossible, to actually conduct the trial in a fair manner without a substantial risk of a compromised trial process and possible mistrial resulting from disagreements over whether the law firm, in defending Dr. E’s interests, has acted in a manner adverse to Dr. B’s interests.

In this medical malpractice lawsuit there were liability issues, including both the standard of care and causation, advanced by the plaintiffs against both doctors. Dr. B in his cross-claim relied upon the allegations of negligence made by the plaintiffs against Dr. E.

At trial various liability experts would be called. The law firm would examine or cross-examine some or all of these witnesses. The practical reality was that the court could not police the proceedings and determine at what point such examinations crossed the line from a compliant examination to one that was adverse to Dr. B. The law firm could not expect to avoid such adversity if it cross-examined Dr. B. or the other witnesses called on the issue of liability. The exercise of providing a full and complete defence to Dr. E increases Dr. B’s liability exposure.

The court held that it was necessary to remove the defence medical malpractice law firm as counsel of record for Dr. E. This was so as no fair procedural order could be made to protect or safeguard against these concerns.

This decision will affect all medical malpractice law firms.

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