The Court of Appeal recently released a decision that serves as a reminder to all counsel: never lose sight of who you act for.
In Mallory v. Werkmann Estate, 2015 ONCA 71, Ontario's Chief Justice Strathy removed counsel after finding that he had neglected his duties to his client by advancing the interests of the client's insurer, the entity who appointed counsel.
The dynamics at play in Mallory are not uncommon in the insurance context. An insurer was called upon to defend an action in relation to an accident that led to the plaintiff's injuries and the deaths of two people. The accident occurred as a result of a high-speed motorcycle race between three cyclists, including the appellant. Another cyclist lost control and crashed into the plaintiff's car, killing the car's passenger and the cyclist. The plaintiff sued the cyclists (including the estate of the deceased). He also sued his insurer to guard against the possibility of the appellant being denied coverage – racing was potentially a basis to exclude coverage.
Rather than deny coverage outright, Royal & SunAlliance reserved its rights, and appointed and paid for counsel to defend the insured. The trouble arose when findings from trial invited a conflict of interest between the client and the insurer.
At trial, the appellant was found partially liable and the claim against the plaintiff's insurer was dismissed on the basis that the appellant was insured. The insurer balked at the finding, and attempted to raise the issue with the judge. The insurer was rebuffed by the judge's secretary, and was advised to raise the issue through the proper channels. Rather than do so, counsel for the appellant raised the issue as a ground for appeal.
However, the ground appealed was clearly irrelevant to the appellant's case. After all, the issue related to Plaintiff's claim against his own insurer. More troublesome was the fact that the issue of coverage was adverse to the appellant's interests. The finding of coverage was clearly favourable to the appellant. Yet his lawyer, under his notice of appeal, sought to challenge the finding. From this, Justice Strathy came to the "inescapable conclusion that defence counsel was acting on the instruction of the insurer to advance a ground of appeal contrary to the interests of the insured."
Apparently the client was not bothered by this fact, and would have like counsel to continue to act. Justice Strathy considered this, but ultimately concluded counsel had to be removed to protect the integrity of the administration of justice and avoid the appearance of impropriety.
Though it is not always easy to navigate competing interests at stake, the interests of the client must be kept paramount, irrespective of who pays the pills.