Professional Responsibility and Practice Course Written

Exercises
Module 1: Professional Responsibility........................................................................................................3
Introduction to the Rules:........................................................................................................................3
A.

Test Your Professional Responsibility IQ:...................................................................................3

B.

Confidentiality or Client Privilege?...........................................................................................10

Identifying and Avoiding Conflicts of Interest:......................................................................................12

A.

How to Resolve an Ethical Issue................................................................................................12

B.

Williams Case Study..................................................................................................................12

C.

True or False: Conflicts of Interest.............................................................................................20

Test Yourself..........................................................................................................................................26
A.

Identifying the Issues.................................................................................................................26

Module 2: Client Communications............................................................................................................32

Confidentiality and Solicitor-Client Privilege........................................................................................32
A.

Confidentiality Case Study........................................................................................................32

Improving your Written Communication Skills.....................................................................................39

A.

Supplementary Writing Exercises..............................................................................................39

Test Yourself..........................................................................................................................................45
A.

Identify the Issues......................................................................................................................45

Module 3 Managing the Client File........................................................................................................56

Introduction...........................................................................................................................................56
A.

Test Your File Management IQ..................................................................................................56

Gathering the Facts................................................................................................................................59

A.

Case File: Floyd v. White House Siding....................................................................................59

B.

Good Facts/Bad Facts Analysis:.................................................................................................60

Floyd Case: Good Facts...................................................................................................................60

Floyd Case: Bad Facts.....................................................................................................................60
Developing a Theory of the Case...........................................................................................................61
A.

Theory of the Case How and Why Developed........................................................................61

Theory of the Case How and Why Developed? An Overview...........................................................61

B.

Checklist: Developing the Theory of the Case...........................................................................72

C.

Checklist: Testing the Theory of the Case..................................................................................72

D.

The Importance of Working Your Theory into Your Pleadings..................................................73

E.

Theory of the Case and Its Use in Examination for Discovery..................................................88

Negotiating With the Other Side..........................................................................................................101

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A.

Conflict Analysis.....................................................................................................................101

Conflict Analysis A Continuum of Dispute Resolution Processes....................................................101

ADR: A Conceptual Overview Relating Disputes to Process.......................................................102
B.

Design Elements and Choices..................................................................................................104

C.

Negotiation: Basic Concepts....................................................................................................111

D.

Guide For Negotiation Preparation..........................................................................................114

E.

Prepare for Negotiation (Rooster Jack Case File)....................................................................115

Complete the Matter............................................................................................................................127

Ownership of Documents................................................................................................................127
Module 4 Practice Management...........................................................................................................128
Choosing Your Practice.......................................................................................................................128
A.

Choice of Business Structure or Practice Arrangement:...........................................................128

Checklist..........................................................................................................................................129
B.

Should I Open My Own Practice?............................................................................................132

Checklist..........................................................................................................................................132
Creating a Business Plan.....................................................................................................................133
A.

Prepare a Business Plan...........................................................................................................133

Checklist..........................................................................................................................................133
Managing Support Staff.......................................................................................................................135
A.

Delegating Responsibly and Effectively..................................................................................135

Managing Your Finances.....................................................................................................................139

A.

Trust Case Study 1...................................................................................................................139

B.

Trust Accounting Case Study 2................................................................................................143

C.

Trust Accounting Case Study 3................................................................................................150

D.

Recording Keeping Requirements...........................................................................................155

Marketing Your Services.....................................................................................................................157

A.

Marketing Your Practice..........................................................................................................157

Marketing Your Practice..........................................................................................................................157

Checklist..............................................................................................................................................157
Using Law Office Technology.............................................................................................................159
A.

10 Essential Technology Skills and Practices...........................................................................159

Module 1: Professional Responsibility

Introduction to the Rules:
A. Test Your Professional Responsibility IQ:

Question 1 of 10
Lawyers retained by an organization act for the organization even though they receive their
instructions from individuals.
Option: True
Option: False
Option: Depends
Explanation:
Rule 2.02(1.1):
Notwithstanding that the instructions may be received from an officer, employee, agent or
representative, when a lawyer is employed or retained by an organization, including a
corporation, in exercising his or her duties and in providing professional services, the lawyer
shall act for the organization.
Question 2 of 10
A lawyer retained by a corporation and sitting on its board of directors has a potential conflict of
interest.
Option: True
Option: False
Option: Depends
Explanation:
Subrule 2.04(3) imposes a responsibility on lawyers to avoid putting themselves into positions of
conflicting interest. When lawyers act as legal advisors and also act in other roles for the same
client(s), conflicts of interest may arise. This would be the case where the lawyer who acts as
legal advisor to a corporation also serves on its board of directors.

As stated in the Commentary to subrule 2.04(3), A dual role may raise a conflict because it may
affect the lawyers independent judgement and fiduciary obligations in either or both roles, it
may obscure legal advice from business and practical advice, it may invalidate the protection of
lawyer and client privilege, and it has the potential of disqualifying the lawyer or the law firm
from acting for the organization.
Lawyers should also be mindful of Rule 6.04 which addresses outside interests and the practice
of law. This Rule requires lawyers who engage in another profession, occupation or business at
the same time as practising law to ensure that the outside interest(s) does not jeopardize the
lawyers professional integrity, independence or competence.

Question 3 of 10
Your client has been complaining about opposing counsel, Mr. X. Today your client states that:
I am going to get that creep Mr. X in court tomorrow. As this is confidential client information,
you cannot disclose it.
Option: True
Option: False
Option: Depends
Explanation:
Subrule 2.03(1) states that: A lawyer at all times shall hold in strict confidence all information
concerning the business and affairs of the client acquired in the course of the professional
relationship and shall not divulge any such information unless expressly or impliedly authorized
by the client or required by law to do so.
There are, however, some exceptional circumstances where disclosure without the clients
permission may be warranted. Subrule 2.03(3) provides that where a lawyer believes on
reasonable grounds that there is an imminent risk to an identifiable person of death or serious
bodily harm, including serious psychological harm that substantially interferes with health or
well-being, the lawyer may disclose confidential information, pursuant to judicial order where
practicable, where it is necessary to do so in order to prevent the death or harm. The lawyer must
not disclose more information than is required.
On the facts in question 3, where the client is threatening an identifiable person, Mr. X, the
lawyer, should assess the clients demeanour in light of his or her knowledge of the clients
history and then determine whether the circumstances meet the criteria for justified disclosure
under the Rules. As the threat makes reference to the court, the lawyer should consider subrule
4.06(3) relating to the security of court facilities. This subrule states that: A lawyer who has
reasonable grounds for believing that a dangerous situation is likely to develop at a court facility
shall inform the local police and give particulars.

Question 4 of 10
Different lawyers in the same firm cannot act for both the transferor and the transferee in a
transfer of title to real property.
Option: True
Option: False
Option: Depends
Explanation:
Subrule 2.04.1(2) allows different lawyers in the same firm to represent the transferor and the
transferee in a transfer of title to real property so long as there is no violation of the Rule 2.04
dealing with conflicts of interest. If there is no conflict of interest, and if prudent to do so, then
the lawyers in the same firm may act provided that they comply with the joint retainer rules set
out in subrules 2.04(6)-(10).
Be aware that the two-lawyer requirement in Rule 2.04.1 prohibits an individual lawyer from
representing both the transferor and the transferee in a transfer of title to real property unless one
of the exceptions, set out in subrule 2.04.1(3) applies, and there is no violation of Rule 2.04
(conflicts of interest).

Question 5 of 10
I act regularly for Jim in business transactions. Jim was just married and he and his wife, Janet,
want me to act for both of them in a business deal. This will be a joint retainer. Given that Janet
already knows that I have a continuing professional relationship with Jim. I don't need to
recommend to Janet that she obtain independent legal advice.
Option: True
Option: False
Option: Depends
Explanation:
Subrule 2.04(7) requires that, with the exception of lending clients as defined in subrule
2.04(8.1), where a lawyer has a continuing relationship with a client for whom (s)he acts
regularly, the lawyer must before accepting the joint retainer in a matter or transaction advise
the other client of the continuing relationship and recommend that the client obtain independent
legal advice about the joint retainer.

Question 6 of 10
Consent under the Rules must always be recorded in writing.
Option: True
Option: False
Option: Depends
Explanation:
1.02 defines consent as follows:
a. A consent in writing, provided that where more than one person consents, each may sign
a separate document recording his or her consent, or
b. An oral consent, provided that each person giving the oral consent receives a separate
letter recording his or her consent.

Question 7 of 10
You are a lawyer in financial difficulty because one of your children requires costly medication.
You have a wealthy client, Mrs. Y, who offers to lend you the money to pay for the medication.
Mrs. Y is not related to you. Given these difficult circumstances and given that your client
consents, you may borrow money from her in order to pay for the medication.
Option: True
Option: False
Option: Depends
Explanation:
Subrule 2.06(4) prohibits lawyers from borrowing money from a client unless
a. The client is a lending institution, financial institution, insurance company, trust company
or any similar corporation whose business includes lending money to the client, or
b. The client is a related person as defined in the Income Tax Act and the lawyer is able to
discharge the onus of proving that the clients interests were fully protected by the nature
of the case and by independent legal advice or independent legal representation.

Question 8 of 10
You represent a difficult client in a personal injury matter. The trial is in a month. Today the
client has phoned you and tells you that he may have misled opposing counsel, Mr. Z, as to the
extent of his injuries. You must withdraw from the case.
Option: True
Option: False
Option: Depends
Explanation:
The client-lawyer relationship may be terminated at will by the client. The lawyer, however, does
not enjoy the same freedom of action. Subrule 2.09(1) states that: A lawyer shall not withdraw
from representation of a client except for good cause and upon notice to the client appropriate in
the circumstances. There are two categories of withdrawal: mandatory and optional.
Withdrawal must always be, regardless of category, for good cause and upon notice that is
appropriate in the circumstances.
Be aware that in criminal proceedings there are specific rules governing withdrawal (see subrules
2.09(3) through (6) inclusive).
Mandatory Withdrawal Subrule 2.09(7)
A lawyer has a duty to withdraw if:
a. discharged by the client,
b. the lawyer is instructed by the client to do something inconsistent with the lawyers duty
to the tribunal and, following explanation, the client persists in such instructions,
c. the client is guilty of dishonourable conduct in the proceedings or is taking a position
solely to harass or maliciously injure another,
d. it becomes clear that the lawyers continued employment will lead to a breach of these
rules,
e. the lawyer is required to withdraw due to dishonesty, fraud etc. when client is an
organization (see subrules 2.02(5.1) and (5.2))
f. the lawyer is not competent to handle the matter.
Optional Subrule 2.09(2)
7

In some cases where there has been a serious loss of confidence between the client and the
lawyer, the lawyer may withdraw, but there is no duty to do so.
On the facts in question 8, the lawyer will need to explore with the client just what was meant by
his remark about misleading opposing counsel, Mr. Z. How did he mislead Mr. Z? Was this
intentional or inadvertent? Is the client prepared to correct any misunderstanding, if Mr. Z was
misled inadvertently? Does the client intend to mislead the court? If so, does the client
understand the consequences of such a course of action? If the client is not prepared to clarify
any misunderstandings and wishes to continue to mislead Mr. Z, the clients lawyer cannot assist
in or encourage any dishonesty (subrule 2.02(5)). The lawyer will then need to assess whether
there may be a mandatory duty to withdraw or, absent any mandatory duty, whether there has
been a serious loss of confidence between counsel and the client that may warrant withdrawal.
On the issue of appropriate notice, the Commentary to subrule 2.09(1) states, No hard and fast
rules can be laid down about what will constitute reasonable notice before withdrawal. Where
the matter is covered by statutory provisions or rules of court, these will govern. In other
situations, the governing principle is that the lawyer should protect the clients interests to the
best of the lawyers ability and should not desert the client at a critical stage of a matter or at a
time when withdrawal would put the client in a position of disadvantage or peril.

Question 9 of 10
When my client was testifying in his wrongful dismissal suit, opposing counsel was shouting at
him on the stand. Given every lawyer's duty to represent the client resolutely, this seems like
acceptable advocacy.
Option: True
Option: False
Option: Depends
Explanation:
Subrule 4.01(1) states that: When acting as an advocate, a lawyer shall represent the client
resolutely and honourably within the limits of the law while treating the tribunal with candour,
fairness, courtesy, and respect.
Subrule 4.02(2) sets out a list of forbidden behaviours on the part of an advocate, a list that
imposes limits on a lawyers duties to the client. Paragraph 4.02(2)(k) states that: When acting
as an advocate, a lawyer shall not
(k) needlessly abuse, hector, or harass a witness...

Question 10 of 10
Opposing counsel has made a very reasonable request for an adjournment in a civil suit, but your
client opposes this request. You have no choice but to follow your client's instructions.
Option: True
Option: False
Option: Depends
Lawyers must balance the duties they owe to their clients with the duties that they owe to the
administration of justice, the Law Society, and other lawyers. As stated in subrule 6.03(2), A
lawyer shall agree to reasonable requests concerning trial dates, adjournments, the waiver of
formal procedural formalities and similar matters that do not prejudice the rights of the client.

B. Confidentiality or Client Privilege?

What is the difference between confidentiality and solicitor/client privilege?

The ethical duty of confidentiality must be distinguished from the legal doctrine of solicitorclient privilege and from the fiduciary duty of lawyers to protect client confidential information.
The legal doctrine of solicitor-client privilege is an evidentiary rule; the ethical duty of
confidentiality is a professional conduct rule that reflects the equitable fiduciary duty to protect
client confidences. The focus here is on the difference between the ethical duty of confidentiality
and the legal doctrine of solicitor-client privilege.

The Ethical Duty of Confidentiality

The ethical or professional conduct duty of confidentiality is much broader and includes
information covered by the doctrine of solicitor-client privilege. It covers all information
obtained by a lawyer during the course of and in furtherance of the retainer, whether directly
from the client or from some other source. Specifically, the Commentary to Subrule 2.03(1) of
the Rules of Professional Conduct states, This rule must be distinguished from the evidentiary
rule of lawyer and client privilege concerning oral or documentary communications passing
between the client and the lawyer. The ethical rule is wider and applies without regard to the
nature or source of the information or the fact that others may share the knowledge.
The ethical duty of confidentiality prohibits the lawyer from revealing the information (except in
certain defined circumstances) in any forum. It survives the demise of the lawyer/client retainer
and the demise of the client.
The ethical duty of confidentiality is broader than the evidentiary rule of solicitor-client privilege
in three ways. First, it requires lawyers to maintain information in confidence, whereas privilege
merely prevents the introduction of information into evidence. Second, it applies not only to
confidential communications between clients and lawyers that are exchanged for the purpose of
obtaining legal advice, but also to all information concerning the clients' affairs acquired from
any source during the course of the professional relationship. Third, it applies even though
others may share the lawyer's knowledge. (MacKenzie, Gavin, Lawyers and Ethics: Professional
Responsibility and Discipline (Toronto: Carswell, 1993) at 3-3.)

Privilege
Privilege is the legal right of an individual to refuse to disclose or withhold relevant information
from a court, tribunal, and from investigations, including law enforcement officials. Privilege is
an evidentiary rule of law that prohibits the disclosure of certain communications.
There are several different types of privileged information. Privilege is afforded to
communications

between solicitor and a client to obtain legal advice solicitor-client privilege,

10

made for the dominant purpose of anticipated or pending litigation the litigation
privilege, and

made without prejudice to settle disputes.

This list is not exhaustive. The rationales for the various forms of privileged information differs.

Solicitor-Client Privilege
Privileged information, information or communications protected in law, is simply a subset of
all information concerning the business and affairs of the client acquired in the course of the
professional relationship. (MacKenzie, Gavin, above) All privileged information is also
confidential information.

Accordingly, a lawyer is under an ethical and legal obligation to protect privileged information.
In contrast, a lawyer may be under an ethical, but not a legal obligation to protect other
information information that is not covered by privilege but falls under ambit of Rule 2.03.

11

Identifying and Avoiding Conflicts of Interest:

A. How to Resolve an Ethical Issue

The Law Society recommends a model approach for resolving ethical dilemmas. Using your
understanding of how to analyze ethical issues, rank the following steps in the best order:

[answer]:

1. D - Identify the various ethical issues raised in the fact scenario.

2. C - Consider any governing law that may bear upon the problem.
3. G - Look to the specific rule and commentary in the Rules of Professional Conduct.
4. E - Apply the facts to the rule to determine your responsibilities and whether they are
mandatory or permissive.
5. B - Consider how to balance any competing duties.
6. F - If there is any uncertainty,
o Check the Professional Development and Competence web page on the Law
Societys website.
o Consult the Practice Management Helpline or a senior practitioner who practises
in the relevant area of law.
7. A - Keep a detailed written record.

B. Williams Case Study

You have been asked to assist a partner in your firm to advise Vincent Ray. The memo from the
partner and the summary of facts from the client appear below.
_______________________________________________
12

Memo Regarding Vincent Ray

To:

Associate Lawyer

From:

Partner

Date:

June 2009

Mr. Ray consulted me about three months ago about his former lawyer, Jay Williams. As I
recall, I told him that I could find no evidence of malpractice or misconduct. Apparently Ray has
new information and wants us to advise him. His memo setting out the facts is attached. Please
review the memo and be prepared to discuss it with me.
_________________________________________________
Summary of Facts
To:

Lawyer

From:

Vincent Ray

My name is Vincent Ray. I need your help regarding the actions of my previous lawyer, J.
Williams. Here is a summary of the facts:
I used to be one of four general partners with what is now ABC Inc. (ABC), an investment
banking, securities and trading brokerage firm. The other partners were Nicholas, Perry and
Newland. In February 2006, Perry, the managing partner, asked me to resign from the partnership
because, according to her, I was no longer making any real contribution to the firm.
It was clear to me that I was given no real choice in the matter, so I didnt resist the formal
termination of my partnership interest. That happened on April 30 of that year. Several months
later, ABC went public. As you can imagine, my former partners made a lot of money.
I was and remain convinced that the reason they wanted me removed from the partnership at that
time was to make sure they didnt have to share the financial benefits of the public offering with
me. They knew the restructuring and public offering of ABC was in the works. They purposely
kept this information from me, and then cut me loose before they went ahead. Thats what I
believe. Of course, they deny it.
I hired a lawyer, Mr. Green, to look into these matters for me. My position was that my former
partners breached both the terms of our partnership agreement, and their fiduciary duties to me.
It was my position that at the time Perry forced my resignation, Perry, Nicholas and Newland
intended to take ABC public and they intentionally kept this secret from me.
Prior to launching my claim, Mr. Green met with a lawyer from Jones and Craig, ABCs
corporate lawyers at the time ABC went public. The meeting was supposed to be an informal
13

discovery to find out more about the public offering from the lawyers working on the matter for
ABC. In the reporting letter he sent me after the meeting, Mr. Green indicated that Ms. Jones, the
lawyer who had been consulted by ABC for the public offering, had tried to persuade Mr. Green
that there was no merit to my claim. Mr. Greens letter also set out the details about Ms. Jones
involvement with Perry and ABC during the time ABC was restructured to go public.
Unfortunately, Mr. Green suffered a stroke shortly after the meeting and so I was forced to hire
new counsel.
I then met with Ms. Baxter from Williams Lawyers. At our first meeting, she said she was going
on maternity leave in a few months, so she referred me to her partner, Mr. Williams.
Mr. Williams and I met in January 2007. We had a two and a half hour meeting where I told him
pretty much everything I have outlined. I gave him a copy of Mr. Greens reporting letter. I
admit that Mr. Williams warned me that my chances of success were minimal. He didnt think
that I had a particularly strong case. Nevertheless, I wanted my day in court and he agreed to act
for me.
We started an action against my former partners for breach of the partnership agreement and for
breach of fiduciary duty. Mr. Williams acted for me, and a lawyer by the name of Mr. Smith
acted for the other side. We had discoveries and went to trial last fall. The trial lasted three days.
Mr. Williams called me and one other witness, Jackson, an associate who was working at ABC
when I was forced out of the partnership. Mr. Smith called three witnesses, Perry, Newland and
the lawyer, Ms. Jones.
Although I thought Mr. Williams could have questioned Perry and Newland more forcefully, I
suppose he did an okay job. When it was time to question Ms. Jones, however, he really didnt
go after her at all. Her testimony focused on the timing and nature of her involvement in ABC
Inc.s decision to go public. She also testified that she had warned Mr. Green that she would
give evidence on behalf of my former partners if the matter went to trial. Although Mr. Williams
asked her some questions, he didnt cross-examine her very aggressively at all. Needless to say,
we lost the trial.
I was pretty disappointed and believe that Mr. Williams should have questioned Ms. Jones more
vigorously. When I asked why he didnt go after her he said that the best way of neutralizing
her testimony was not by refuting it, but by persuading the judge that as a matter of law, Ms.
Jones testimony was irrelevant.
Your colleague has reviewed everything and come to the conclusion that this tactic was not out
of line. He concluded, based on what we knew at that time, that I have no legitimate complaint
against Mr. Williams.
That was three months ago. I have now found out that Ms. Jones used to work with Mr. Williams
and his partners. Apparently, Williams and his partners were all associates at Jones and Craig for
about 8 years from 1983 2000. They all knew each other.

14

I believe that I now have some pretty strong evidence that Mr. Williams messed up and would
like to discuss this further with you.

Question 1 of 10
What does Ray think his lawyer, Williams, has done wrong?
[Answer]: Ray believes that Williams may have not cross-examined Jones as aggressively as he would
have if Williams had not known Jones through previous employment at the Jones firm.

_______________________________________________
Question 2 of 10
Identify the specific Rule(s) of Professional Conduct that may form the basis of Rays
complaint. Explain how you would argue on behalf of Ray that the Rule(s) were breached.
[Answer]:
Ray is alleging that Williams is in a conflict of interest.

Clause 2.04(1)(a): conflict of interest means an interest that would likely affect adversely
a lawyers judgment on behalf of or loyalty to a client.

Clause 2.04(1)(b): would not apply as there is no other client involved and therefore no
other clients interest to prefer.

If there is a conflict, it will arise as a result of the previous employment relationship

between Williams and Jones.

[NF Supplement]:
Rule 2.04(3):A lawyer shall not act or continue to act in a matter when there is or is likely to be a
conflicting interest unless, after disclosure adequate to make an informed decision, the client or
prospective client consents.

Question 3 of 10
What, if anything, could Williams have done differently to avoid this situation?
15

[Answer]:

Disclosed his relationship with Ms. Jones to Ray.

Declined to act for Ray if he felt that his previous relationship with Ms. Jones would be
likely to interfere with his ability to effectively represent his client.

[NF Supplement]:
Williams should have advised the client of the potential conflict (i.e. informed of the previous
employment relationship with opposing counsel).
see Rule 2.04:
(3)A lawyer shall not act or continue to act in a matter when there is or is likely to be a
conflicting interest unless, after disclosure adequate to make an informed decision, the client or
prospective client consents.
Change the Facts
Assume that Williams had never been employed at the Jones firm. Rather, he operated as a sole
practitioner until 2000. At that time, three associates from Jones and Craig left to join Williams
as partners and established Williams Lawyers. After leaving the Jones firm in 2000, the new
partners at the Williams firm continued to work on approximately five matters in which they
were involved while they were associates at the Jones firm. As of the date of Rays trial in 2008,
Jones had referred approximately six cases to the Williams firm. None of these cases were
related to ABC or involved any confidential or relevant information that had any bearing
on the ABC matter with Ray. The referrals from the Jones firm to the Williams firm, during the
period of time Williams represented Ray, amounted to approximately 1% to 2% of the Williams
firms business. In one instance, during the same period that the Williams firm represented Ray,
another partner at the Williams firm served as co-counsel with a lawyer from the Jones
firm (not Jones), but the case was completed two months before the Ray trial began.
Question 4 of 10
Do these different/additional facts change your answers? What are Mr. Williams duties in this
situation?
[Answer]:
The main duties for Williams in this case are the following:
o Clause 2.04(1)(a) [conflict of interest interest likely to affect adversely a
lawyers judgment on behalf of, or loyalty to, a client or prospective client]
Williams has a duty to be loyal to Ray and not to place himself in a position
where his judgment would be adversely affected by a conflict of interest.

16

o Clause 4.01(1) [When acting as an advocate, a lawyer shall represent the client
resolutely and honourably within the limits of the law while treating the tribunal with
candour, fairness, courtesy, and respect] As an advocate Williams has an obligation
to represent Ray resolutely (with fixed purpose, boldly, firmly, steadily, with
perseverance).

To determine whether Williams is in a conflict of interest, he must look at all of the

circumstances to determine each party or person's interests in the matter.

Question 5 of 10
What is each partys/persons interest in these circumstances?
[Answer]
Ray's interest - to convince the judge that what ABC did was wrong.

Jones' interest - to convince the judge that what ABC did was right. Jones, as witness,
wants the judge to believe her testimony

Williams' interset - to satisfy Ray's desire to convince the judge that ABC is wrong. This
is because of his duty to follow his client's instructions.

Williams' interest - to maintain a good relationship with Jones because Jones has the
ability to confer or deny financial benefits to his partners, and therefore to Williams.

Question 6 of 10
How may Williams personal interest adversely affect his judgment on behalf of Ray?
[Answer]:

Williams has a financial interest in maintaining a good relationship with Jones. If he

attacks Jones vigorously in court, he may damage the relationship with Jones.

In this situation, Ray could argue that Williams financial interest will compel him to go
easy on Jones. The financial interest is clouding his judgment or loyalty to Ray.

Question 7 of 10
17

What should Williams have done to avoid the problem?

[Answer]:

Not taken the case at all. That is the safe route.

Williams should have disclosed the relationship between Jones and Williams.

Subrule 2.04(3): Williams should have given Ray disclosure adequate to allow him to
make an informed decision and obtained Rays consent.

Question 8 of 10
If you were the client, Ray, what additional information would you want to know?
[Answer]:

How long Williams worked with Jones

Number of cases shared with Jones

Amount of billings from each of those cases

Percentage of the Williams firms income from the Jones firm

Changes in Facts
Assume that ... the Ray trial began.
Additional Facts
Assume now that the Williams firm is comprised of 100 lawyers, 50 of whom are partners, and
that Williams had no personal knowledge of the referrals and of the previous employment
relationship with the Jones firm.
Question 9 of 10

18

Given these additional facts, with reference to the Rules of Professional Conduct, does Ray have
any grounds for a complaint against his lawyer? Why or why not?
Rule 1.02: [client includes a client of the law firm of which the lawyer is a partner or associate, whether
or not the lawyer handles the clients work]
Ray is a client regardless of which lawyer works on his file. If one lawyer is in a conflict of interest, then
according the Rules all the lawyers are in a conflict of interest with that client.

Additional Facts
Assume now that the Williams firm is comprised of 100 lawyers, 50 of whom are partners, and
that Williams had no personal knowledge of the referrals and of the previous employment
relationship with the Jones firm.
Assume that Williams had never been employed at the Jones firm. Rather, he operated as a sole
practitioner until 2000. At that time, three associates from Jones and Craig left to join Williams
as partners and established Williams Lawyers. After leaving the Jones firm in 2000, the new
partners at the Williams firm continued to work on approximately five matters in which they
were involved while they were associates at the Jones firm. As of the date of Rays trial in 2008,
Jones had referred approximately six cases to the Williams firm. None of these cases were
related to ABC or involved any confidential or relevant information that had any bearing on the
ABC matter with Ray. The referrals from the Jones firm to the Williams firm, during the period
of time Williams represented Ray, amounted to approximately 1% to 2% of the Williams firms
business. In one instance, during the same period that the Williams firm represented Ray, another
partner at the Williams firm served as co-counsel with a lawyer from the Jones firm (not Jones),
but the case was completed two months before the Ray trial began.
Question 10 of 10
What should Williams have done to avoid unknowingly being caught in a conflict of interest
because of his partners dealings with Jones?

When Ray consulted Williams, Williams should have

o asked Ray to identify all conflict names, that is, the names of all related and
adverse personsnot just adverse parties in the court actionand their
relationship to Ray, the client, and
o checked Rays name and all conflict names against the names in the firms data
bank.

From this scenario, you should take away the following:

19

Lawyers must be sensitive not only to obvious conflicts, but also to forces that might
operate upon them subtly in a manner likely to diminish the quality of their work

Lawyers must disregard the desires of third parties

If the third party is in a position to exert strong economic, political, or social pressures on
the lawyer, then the desires of the third party may have an adverse affect on the lawyers
judgment

To help identify these types of conflicts early, lawyers should use and maintain a proper
conflicts checking system, one which includes the names of individuals or entities that
may influence a lawyers judgment

20

C. True or False: Conflicts of Interest

Question 1 of 10
A lawyer may act against a former client in a related matter provided the lawyer has not obtained
relevant confidential information from the former client about the related matter.
Option: True
Option: False
[Answer]:
Subrule 2.04(4)(b) of the Rules states that:
A lawyer who has acted for a client in a matter shall not thereafter act against the client or
against persons who were involved in or associated with the client in that matter
(b) in any related matter

Question 2 of 10
When a lawyer is dealing on a client's behalf with an unrepresented person, the lawyer shall
make clear to the unrepresented person that the lawyer will protect the interests of his client and
the unrepresented party.
Option: True
Option: False

21

[Answer]:
Rule 2.04:
(14)When a lawyer is dealing on a clients behalf with an unrepresented person, the lawyer shall:
(a) urge the unrepresented person to obtain independent legal representation, (b) take care to see
that the unrepresented person is not proceeding under the impression that his or her interests will
be protected by the lawyer, and (c) make clear to the unrepresented person that the lawyer is
acting exclusively in the interests of the client and accordingly his or her comments may be
partisan.

Question 3 of 10
Where a lawyer acts for both the borrower and the lender in a mortgage transaction, the lawyer
shall disclose to the borrower and lender, in writing, before the advance of the mortgage, all
material information that is relevant to the transaction.
Option: True
Option: False
[Answer]:
Subrule 2.04(6.1) of the Rules states that:
Where a lawyer acts for both the borrower and the lender in a mortgage or loan transaction, the
lawyer shall disclose to the borrower and the lender, in writing, before the advance or release of
the mortgage or loan funds, all material information that is relevant to the transaction.

Question 4 of 10
A conflict may exist where a lawyer's family member has a personal financial interest in the
client's affairs or in the matter in which the lawyer is requested to act for the client.
Option: True
Option: False
[Answer]:
Subrule 2.04(1), Commentary of the Rules states that:
In this rule,
22

a "conflict of interest" or a "conflicting interest" means an interest

(a) that would be likely to affect adversely a lawyer's judgment on behalf of, or loyalty to, a
client or prospective client, or
(b) that a lawyer might be prompted to prefer to the interests of a client or prospective client.
Commentary
Conflicting interests include, but are not limited to, the financial interest of a lawyer or an
associate of a lawyer, including that which may exist where lawyers have a financial interest in a
firm of non-lawyers in an affiliation, and the duties and loyalties of a lawyer to any other client,
including the obligation to communicate information. For example, there could be a conflict of
interest if a lawyer, or a family member, or a law partner had a personal financial interest in the
client's affairs or in the matter in which the lawyer is requested to act for the client, such as a
partnership interest in some joint business venture with the client. The definition of conflict of
interest, however, does not capture financial interests that do not compromise a lawyer's duties to
the client. For example, a lawyer owning a small number of shares of a publicly traded
corporation would not necessarily have a conflict of interest, because the holding may have no
adverse influence on the lawyer's judgment or loyalty to the client.
Where a lawyer is acting for a friend or family member, the lawyer may have a conflict of
interest because the personal relationship may interfere with the lawyer's duty to provide
objective, disinterested professional advice to the client.

Question 5 of 10
Where a lawyer has obtained relevant confidential information concerning a former client's new
matter, the lawyer s partner may act against the former client in the new matter if the former
client consents.
Option: True
Option: False
[Answer]:
Rule 2.05:
(4)Where the transferring lawyer actually possesses relevant information respecting the former
client that is confidential and that, if disclosed to a member of the new law firm, may prejudice
the former client, the new law firm shall cease its representation of its client in that matter unless
(a) the former client consents to the new law firm's continued representation of its client, or
(b) the new law firm establishes that it is in the interests of justice that it act in the matter, having
regard to all relevant circumstances, including, (i) the adequacy and timing of the measures taken
to ensure that no disclosure to any member of the new law firm of the former client's confidential
23

information will occur, (ii) the extent of prejudice to any party, (iii) the good faith of the parties,
(iv) the availability of suitable alternative counsel, and (v) issues affecting the public interest.

Question 6 of 10
If a lawyer accepts employment from more than one client in a matter, the lawyer shall advise the
clients that all information received from one client in connection with the matter will be treated
as confidential so far as any of the other clients are concerned.
Option: True
Option: False
Subrule 2.04(6) of the Rules states that:
Except as provided in subrule (8.2), where a lawyer accepts employment from more than one
client in a matter or transaction, the lawyer shall advise the clients that
(a)

the lawyer has been asked to act for both or all of them,

(b) no information received in connection with the matter from one can be treated as
confidential so far as any of the others are concerned, and
(c) if a conflict develops that cannot be resolved, the lawyer cannot continue to act for both or all
of them and may have to withdraw completely.

Question 7 of 10
A law firm of two or more lawyers may act for or otherwise represent a transferor and a
transferee in a transfer of title to real property so long as the transferor and transferee are
represented by different lawyers in the firm and there is no violation of Rule 2.04.
Option: True
Option: False

24

[Answer]:
Subrule 2.04.1(2) of the Rules states that:
Subrule (1) does not prevent a law firm of two or more lawyers from acting for or otherwise
representing a transferor and a transferee in a transfer of title to real property so long as the
transferor and transferee are represented by different lawyers in the firm and there is no violation
of rule 2.04.

Question 8 of 10
Where clients have consented to a joint retainer and a contentious issue arises among them, the
lawyer may assist with settling the issue through direct negotiations among the clients.
Option: True
Option: False
[Answer]:
Subrule 2.04(9) of the Rules states that:
Save as provided by subrule (10), where clients have consented to a joint retainer and an issue
contentious between them or some of them arises, their lawyer shall
(a)

not advise them on the contentious issue, and

(b) refer the clients to other lawyers, unless

(i) no legal advice is required, and
(ii) the clients are sophisticated,
in which case, the clients may settle the contentious issue by direct negotiation in which the
lawyer does not participate.

Question 9 of 10
A lawyer may act for both the lender and the borrower in a mortgage or land transaction if the
consideration of the mortgage does not exceed $100,000.
Option: True
Option: False
25

[Answer]:
Rule 2.04:
(12) Provided that there is no violation of this rule, a lawyer may act for or otherwise represent
both lender and borrower in a mortgage or loan transaction if
(a) the lawyer practises in a remote location where there are no other lawyers that either party
could conveniently retain for the mortgage or loan transaction,
(b) the lender is selling real property to the borrower and the mortgage represents part of the
purchase price,
(c) the lender is a bank, trust company, insurance company, credit union or finance company that
lends money in the ordinary course of its business,
(d) the consideration for the mortgage or loan does not exceed $50,000, or
(e) the lender and borrower are not at arms length as defined in the Income Tax Act (Canada).
Question 10 of 10
Before accepting a retainer to provide legal services to a client jointly with an affiliated entity
who is providing the client with non-legal services, a lawyer shall disclose to the client any
financial arrangements between the lawyer and the affiliated entity that may affect the
independence of the lawyer's representation of the client.
Option: True
Option: False
[Answer]:
Rule 2.04:
(10.1) Where there is an affiliation, before accepting a retainer to provide legal services to a
client jointly with non-legal services of an affiliated entity, a lawyer shall disclose to the client
(a) any possible loss of solicitor and client privilege because of the involvement of the affiliated
entity, including circumstances where a non-lawyer or non-lawyer staff of the affiliated entity
provide services, including support services, in the lawyers office,
(b) the lawyers role in providing legal services and in providing non-legal services or in
providing both legal and non-legal services, as the case may be,
(c) any financial, economic or other arrangements between the lawyer and the affiliated
entity that may affect the independence of the lawyers representation of the client,
including whether the lawyer shares in the revenues, profits or cash flows of the affiliated
entity; and
(d) agreements between the lawyer and the affiliated entity, such as agreements with respect to
referral of clients between the lawyer and the affiliated entity, that may affect the independence
of the lawyers representation of the client.

26

Test Yourself
A. Identifying the Issues

Scenario 1 of 5
Solicitor A attended at a cross-examination before a Special Examiner on behalf of his client.
The opposing solicitor, Solicitor B, opened the cross-examination by saying, Okay Dumbo, you
can start.
Solicitor B continued to refer to Solicitor A as Dumbo, interfered with his questioning and
made other rude and disparaging comments. After the Solicitor B had poured coffee on Solicitor
A's notes for the fourth time, Solicitor A asked the Special Examiner to adjourn the crossexamination. When this was done, Solicitor B said to Solicitor A, Go back to your little hole
and stay where you belong.
[Issues]:

This lawyer has contravened subrule 6.03(1) and commentary [A lawyer shall be
courteous, civil, and act in good faith with all persons with whom the lawyer has dealings in
the course of his or her practice.] and subrule 4.01(6) and commentary [A lawyer shall be
courteous, civil, and act in good faith to the tribunal and with all persons with whom the
lawyer has dealings in the course of litigation. ] of the Rules of Professional Conduct,
which prohibits calling the other lawyer rude, derogatory or insulting names in front of
clients.

Subrule 6.03(1) and commentary also deal with sarcastic remarks.

Rule 6.03(1) Commentary:

The public interest demands that matters entrusted to a lawyer be dealt with effectively and expeditiously,
and fair and courteous dealing on the part of each lawyer engaged in a matter will contribute materially to
27

this end. The lawyer who behaves otherwise does a disservice to the client, and neglect of the rule will
impair the ability of lawyers to perform their function properly. Any ill feeling that may exist or be
engendered between clients, particularly during litigation, should never be allowed to influence lawyers in
their conduct and demeanour toward other legal practitioners or the parties. The presence of personal
animosity between legal practitioners involved in a matter may cause their judgment to be clouded by
emotional factors and hinder the proper resolution of the matter. Personal remarks or personally abusive
tactics interfere with the orderly administration of justice and have no place in our legal system. A lawyer
should avoid ill-considered or uninformed criticism of the competence, conduct, advice, or charges of
other legal practitioners, but should be prepared, when requested, to advise and represent a client in a
complaint involving another legal practitioner.
Rule 4.01(6) Commentary:
Legal contempt of court and the professional obligation outlined here are not identical, and a consistent
pattern of rude, provocative, or disruptive conduct by the lawyer, even though unpunished as contempt,
might well merit discipline.

Scenario 2 of 5
Rosalie Farber (Rosalie) attended a dinner party and was seated beside a litigation lawyer,
Tomai Doan (Tomai). Rosalie was very upset, as she had just learned about a proposed
addition to her neighbour Doreen Smith's (Doreen) house that Rosalie believed would protrude
about 10 feet onto her backyard and interfere with her use and enjoyment of her property.
Over coffee, Rosalie told Tomai about this situation and her discussions with Doreen. Tomai
casually replied that Rosalie might have something to pursue. Rosalie knew that she would have
to take some legal action and was happy that she was able to discuss her case with Tomai, with
whom she had no further contact after the party.
Rosalie came into contact with Tomai three months later, when she spoke with her neighbour,
Doreen, about further concerns regarding the addition. Doreen told Rosalie to take the matter up
with Doreen's lawyer, Tomai. Shocked by this statement, Rosalie contacted Tomai's office and
received confirmation from Tomai's secretary that Tomai's firm had just begun representing
Doreen.
[Issues]:

A solicitor-client relationship may have been created between Rosalie and Tomai as a
result of the discussion at a dinner party. (Definition of client, Rule 1.02 and
commentary).
o Commentary for client: A solicitor and client relationship is often established
without formality. For example, an express retainer or remuneration is not required for a
solicitor and client relationship to arise. Also, in some circumstances, a lawyer may have
legal and ethical responsibilities similar to those arising from a solicitor and client
relationship. For example, a lawyer may meet with a prospective client in circumstances
that impart confidentiality, and, although no solicitor and client relationship is ever
28

actually established, the lawyer may have a disqualifying conflict of interest if he or she
were later to act against the prospective client. It is, therefore, in a lawyers own interest
to carefully manage the establishment of a solicitor and client relationship.

There may be a conflict of interest in Tomai acting for the neighbour after Rosalie
discussed the case with her. (Subrule 2.04(2): A lawyer shall not advise or represent more
than one side of a dispute.)

There may be duty of confidentiality owed by Tomai to Rosalie after their informal
discussion of Rosalies case at the dinner party. (Subrule 2.03(1): A lawyer at all times
shall hold in strict confidence all information concerning the business and affairs of the client
acquired in the course of the professional relationship and shall not divulge any such
information unless expressly or impliedly authorized by the client or required by law to do
so.)

Tomai may have to refuse to continue to act for the neighbour. (Clause 2.04(4)(a): A
lawyer who has acted for a client in a matter shall not thereafter act against the client or
against persons who were involved in or associated with the client in that matter: (a) in the
same matter; (b) in any related matter; or (c) save as provided by subrule (5), in any new
matter, if the lawyer has obtained from the other retainer relevant confidential information
unless the client and those involved in or associated with the client consent )

Tomai must ensure that she properly manages the establishment of her solicitor-client
relationships. (Clause 2.01(1)(i): competent lawyer means a lawyer who has and applies
relevant skills, attributes, and values in a manner appropriate to each matter undertaken on
behalf of a client including: (i) managing ones practice effectively )

Tomai must be wary of the impact of casual discussions involving legal issues.

Tomais secretary should not have disclosed that Doreen is a client of the firm.

Scenario 3 of 5
Marilyn is a newly called lawyer who is trying to build up her budding practice as a criminal
defence lawyer. She shares space with one of the most successful criminal lawyers in the city.
When the lawyer is forced to decline a high profile murder case because of a conflict, he refers
the client to Marilyn and asks Marilyn to pay him a referral fee. The case attracts considerable
media attention, and Marilyn is asked to give interviews to the press. She agrees for what she
believes are two good reasons: 1) getting her client's story out in public will help his defence;
and 2) getting her name out into the public will help her career.
Marilyn gives her first interview and believes that it went well. However, when she reads the
story in print the next day, a number of her answers have been taken out of context. Although she
is angry about this, she is too busy to take steps to correct the public record.
29

The trial concludes and Marilyn is successful in achieving an acquittal. She is approached by a
publisher who wants to write the story of the trial and Marilyn's involvement.
[Issues]:

The lawyer is not permitted to receive a referral fee because the referral was made
because of a conflict of interest. (Subrule 2.08(7): Where a lawyer refers a matter to
another licensee because of the expertise and ability of the other licensee to handle the
matter and the referral was not made because of a conflict of interest, the referring lawyer
may accept and the other licensee may pay a referral fee provided that: (a) the fee is
reasonable and does not increase the total amount of the fee charged to the client, and; (b)
the client is informed and consents.)

The lawyer and public appearances ensure that it is in the interests of the client to make
the statements. (Subrule 6.06(1) Provided that there is no infringement of the lawyers
obligations to the client, the profession, the courts, or the administration of justice, a
lawyer may communicate information to the media and may make public appearances
and statements.) (and commentary: A lawyer's duty to the client demands that, before
making a public statement concerning the client's affairs, the lawyer must first be
satisfied that any communication is in the best interests of the client and within the scope
of the retainer. Public communications about a clients affairs should not be used for the
purpose of publicizing the lawyer and should be free from any suggestion that the
lawyer's real purpose is self-promotion or self-aggrandizement....Lawyers should be
aware that when they make a public appearance or give a statement they will ordinarily
have no control over any editing that may follow or the context in which the appearance
or statement may be used, or under what headline it may appear.)

Obtain client instructions before making statements to the media. (Subrules 6.06(1) and
2.03(1): A lawyer at all times shall hold in strict confidence all information concerning the
business and affairs of the client acquired in the course of the professional relationship and
shall not divulge any such information unless expressly or impliedly authorized by the client
or required by law to do so.)

Use caution because it is not possible to control the final product given to the public.
(Subrule 6.06(1) and commentary)

Public statements should not be used solely for the purpose of promoting the lawyer.
(Subrule 6.06(1) and commentary)

The duty of confidentiality continues indefinitely after the termination of the retainer.
(Subrule 2.03(1) and commentary)

If a lawyer engages in literary works, he shall not disclose confidential information

without the clients consent. (Subrule 2.03(6): If a lawyer engages in literary works, such as
a memoir or an autobiography, the lawyer shall not disclose confidential information without
the clients or former clients consent. )
30

The lawyer should take appropriate steps to correct her answer.

Scenario 4 of 5
The following e-mail has been sent by the husband's counsel directly to the wife in the midst of a
bitter matrimonial dispute. The wife has counsel in this matter.

To: Maria (maria@yahoo.com)

Subject: Your chronic lying
You are again demonstrating that you are a pathological liar who is only interested in money.
Your lawyer has failed to contact me about the children's transportation arrangements for my
client's next visit with them and their after school activities. It is lamentable that I have to wait
until this late hour to assist my client in making arrangements, but you and your lawyer are
clearly procrastinating.
While it is not my job to educate your counsel, I think the law is clear that I am entitled to know
what your plans are. May we please hear from you on this.
[Issues]:
Inappropriate to correspond directly with the wife who is represented by counsel (Subrule
6.03(7): Subject to subrules (7.1) and (8), if a person is represented by a legal practitioner
in respect of a matter, a lawyer shall not, except through or with the consent of the legal
practitioner,
(a) approach or communicate or deal with the person on the matter, or
(b) attempt to negotiate or compromise the matter directly with the person.)
Tone of the e-mail is rude and offensive (Subrules 6.03(1): A lawyer shall be courteous,
civil, and act in good faith with all persons with whom the lawyer has dealings in the course
of his or her practice. ) (and 6.03(5): A lawyer shall not in the course of professional practice
send correspondence or otherwise communicate to a client, another legal practitioner, or any
other person in a manner that is abusive, offensive, or other )
Criticism of another lawyer is unprofessional (Subrules 6.03(1) and (5))
Scenario 5 of 5
You are a sole practitioner practising exclusively in family law. John approaches you to handle
his divorce. You and your spouse have been good friends with John, and you know his wife and
children reasonably well. While drafting the property settlement, you suspect John has not

31

declared all of his assets. When you ask John about it, he insists that his list of assets is complete.
You are not convinced, What should you do?
[Issues]:

Express your concerns to John, and if he continues to insist that his assets are complete,
consider withdrawing from the file (Subrule 2.02(5) and commentary: When acting for a
client, a lawyer shall not :
(a) knowingly assist in or encourage any dishonesty, fraud, crime, or illegal conduct;
(b) advise the client on how to violate the law and avoid punishment.
(and clause 2.09(7)(d): Subject to the rules about criminal proceedings and the direction of
the tribunal, a lawyer shall withdraw if:
(a) discharged by the client,
(b) the lawyer is instructed by the client to do something inconsistent with the lawyer's duty
to the tribunal and, following explanation, the client persists in such instructions,
(c) the client is guilty of dishonourable conduct in the proceedings or is taking a position
solely to harass or maliciously injure another,
(d) it becomes clear that the lawyer's continued employment will lead to a breach of
these rules,
(d.1) the lawyer is required to do so pursuant to subrules 2.02 (5.1) or (5.2) (dishonesty,
fraud, etc. when client an organization), or
(e) the lawyer is not competent to handle the matter.).

A lawyer shall not knowingly assist or permit the client to do anything that the lawyer
considers to be dishonest or dishonourable. (Rule 4.01(2)(b): When acting as an advocate,
a lawyer shall not:
(a) abuse the process of the tribunal by instituting or prosecuting proceedings which,
although legal in themselves, are clearly motivated by malice on the part of the client and are
brought solely for the purpose of injuring the other party,
(b) knowingly assist or permit the client to do anything that the lawyer considers to be
dishonest or dishonourable,
(c) appear before a judicial officer when the lawyer, the lawyer's associates or the client have
business or personal relationships with the officer that give rise to or might reasonably appear
to give rise to pressure, influence, or inducement affecting the impartiality of the officer,
(d) endeavour or allow anyone else to endeavour, directly or indirectly, to influence the
decision or action of a tribunal or any of its officials in any case or matter by any means other
than open persuasion as an advocate,
(e) knowingly attempt to deceive a tribunal or influence the course of justice by offering false
evidence, misstating facts or law, presenting or relying upon a false or deceptive affidavit,
suppressing what ought to be disclosed, or otherwise assisting in any fraud, crime, or illegal
conduct,
(f) knowingly misstate the contents of a document, the testimony of a witness, the substance
of an argument, or the provisions of a statute or like authority,
(g) knowingly assert as true a fact when its truth cannot reasonably be supported by the
evidence or as a matter of which notice may be taken by the tribunal,
(h) deliberately refrain from informing the tribunal of any binding authority that the lawyer
considers to be directly on point and that has not been mentioned by an opponent,
32

(i) dissuade a witness from giving evidence or advise a witness to be absent,

(j) knowingly permit a witness or party to be presented in a false or misleading way or to
impersonate another,
(k) needlessly abuse, hector, or harass a witness,
(l) when representing a complainant or potential complainant, attempt to gain a benefit for
the complainant by threatening the laying of a criminal charge or by offering to seek or to
procure the withdrawal of a criminal charge, and
(m) needlessly inconvenience a witness.)

Module 2: Client Communications

Confidentiality and Solicitor-Client Privilege
A. Confidentiality Case Study

Gordon, a lawyer, lives with his wife and two teenage children. He works at home as much as
possible and only attends his office in the city to meet with clients to conduct research or meet
with office staff.
Gordon is working from his home office when he receives a phone call from his account
manager at the bank. The bank requires a copy of his accounts receivable for all the files that
have accounts which are 90 days overdue or more. Gordon must produce the list to ensure that
the bank will continue to extend his law practice's line of credit for operating costs. Gordon
33

phones Randall, his assistant, and instructs him to send a copy of his accounts receivable to the
bank.
Question 1 of 12
What does Gordon need to consider before sending the list of his accounts receivable to the
bank?
[Answer]:
Rule 2.03:
(5) A lawyer may disclose confidential information in order to establish or collect the lawyer's
fees, but the lawyer shall not disclose more information than is required.
Gordon needs to ask himself the following questions:
Is this disclosure necessary to serve the interests of the clients such that client consent can
be implied? Have the clients given their implied consent to disclosure of this
information?
Are his clients aware that he is disclosing the status of their outstanding accounts to a
third party, his financial institution?
If the answer to any of these questions is no, as soon as the bank receives the list of clients with
outstanding accounts, Gordon will have breached his obligation of confidentiality to the clients
on that list.

Question 2 of 12
What should Gordon have done?
[Answer]:
Usually, an accounts receivable list will include the names of all clients with outstanding accounts and an
indication of how long each account has remained outstanding. Lawyers are not permitted to disclose this
information to third parties unless the client consents or the disclosure is permitted or justified in law or
under the Rules of Professional Conduct. To manage the potential for a breach of confidentiality in this
situation, the lawyer should have identified the clients by a code identifier number so that the financial
institution wouldn't know either the clients name or the matter for which the lawyer has been retained.

Question 3 of 12
What are the risks of either inadvertent disclosure or interception of sending this information by
e-mail? Should Gordon have done anything differently?
34

[Answer]:
Gordon should have discussed with the client at the commencement of the retainer the risks of
using different types of media to transmit highly sensitive and confidential information.
The use of powerful and efficient information technologies can both enhance and pose a risk to
the lawyers ability to serve the client. Given the importance of maintaining lawyer-client
confidentiality, lawyers must use information technology responsibly and ethically. Lawyers
should have a reasonable understanding of the technology they are using and its risks. Managing
information and electronic media is of crucial importance when client information is highly
sensitive. The Canadian Bar Associations Guidelines for Practicing Ethically with New
Information Technologies suggests, as a best practice, that lawyers

use encryption to protect confidential information that is transmitted electronically,

implement computer access restrictions, and

use full-disk encryption for any mobile computing device.

Lawyers should consider recommending to their clients that confidential information transmitted
through electronic media be protected with encryption.

Gordon travels to his office to meet with his bookkeeper. Before he leaves, he shuts down his
laptop computer and locks it away in his home office filing cabinet. Gordon's housekeeper comes
into the office den to clean and empties the contents of the wastepaper basket, which include
clients' documents, into the recycling bin.
Question 4 of 12
What precautions should Gordon have taken in these circumstances to ensure that his clients'
information was protected?
[Answer]:
The possibility of disclosure of client information exists whenever paper or electronic media that contains
confidential information is disposed of. Documents containing such information must be properly
shredded or otherwise made unreadable. It is never acceptable to throw out client documents without
taking this basic precaution, not only to protect the client but also the lawyer; the firm may be held liable
for inadvertent disclosure of confidential matters if the documents are read by others.

35

When Gordon arrives at the office, he reviews his e-mail and saves the attachments that were
sent by ABC Corp. on the firm network. He asks his office assistant, Randall, to contact clients
about a variety of matters including payment of outstanding client accounts.
Randall calls Carmela to ask for further details about ABC Corp's new venture. Unable to reach
her on her cell phone, he calls her office and her home. He leaves one message on her cell
phone's answering service, another with her assistant at work and another on her voicemail at
home. He says he needs to ask her some questions about the new invention that her company
wants to license.
Question 5 of 12
Has Gordon handled this situation properly?
[Answer]:
Gordon should have discussed with the client where and with whom messages could be left.
Lawyers must be very clear as to the scope of disclosure authorized by the client. Clients may
not want family members, employers or friends to know about their legal affairs. Unless the
client has authorized or instructed the lawyer to do so, lawyers should not leave voicemail
messages on message systems. Inadvertent disclosure of private confidential information may
occur if the message is heard by a third party.
Lawyers should also inform their clients of the risks of disclosure. At the beginning of the
retainer they should discuss with their clients acceptable forms of communication, as well as
where and with whom messages may be left. The Canadian Bar Association offers the following
advice:
Lawyers should inform a client of the risks of unauthorized disclosure and interception before
using information technologies. Lawyers need to ensure that their clients, too, understand that
they need to protect the confidentiality of communications to them For example, in the shift
from telephone answering machines to digital voicemail, telephone messages now attract
confidentiality risks similar to those for e-mail communications, namely that messages can be
easily saved, copied and forwarded.

Randall reviews six client matters that have outstanding fees and disbursements. On Gordon's
instructions, Randall sends copies of the outstanding accounts to the firm's collection agency to
enforce payment.
Question 6 of 12

36

Is this disclosure of confidential client information justified? What steps could Gordon have
taken to better manage his obligations?
[Answer]:
Gordon should have redacted or blocked out any confidential client information not necessary to enforce
payment. Lawyers are permitted to disclose confidential information in order to collect outstanding fees
and disbursements, but no more information than is necessary for that purpose. Where accounts contain
confidential information, the lawyer must remove that information before the accounts are revealed to a
collection agency or even the courts.

Rule 2.03:
(5) A lawyer may disclose confidential information in order to establish or collect the lawyer's
fees, but the lawyer shall not disclose more information than is required.
Gordon meets with a current client, Petra, and they review a draft Offer to Settle on his laptop
computer screen. Together Gordon and Petra discuss the details of the proposed offer and revise
the document on the screen.
Once Petra is satisfied with the final draft, Gordon prints two copies of the offer and has Petra
sign them. He gives Petra one copy and puts one in Petras file. Gordon quickly drafts a covering
e-mail to the other lawyer, attaches the electronic copy of the offer to settle, and sends it to the
other lawyer.
Question 7 of 12
Has Gordon taken proper steps to address possible breaches of confidentiality from access to
metadata by third parties? Explain your answer.
[Answer]:
Metadata is information about other data that, although hidden on normal viewing, can be disclosed when
the document is circulated electronically. Metadata information may include such information as
document revisions, including insertions and deletions, tracked changes and comments added by
reviewers. Lawyers have an ethical obligation when transmitting documents electronically to exercise
reasonable care to ensure that confidential information is not disclosed in the metadata. Gordon should
have taken steps to minimize the creation of metadata as well as removed any hidden data before sending
the document.

After Petra leaves, Gordon ushers a new client, Raj, into his office. Raj is seated in the same
chair as Petra, Gordon's previous client. Gordon sets Petra's open file aside to one corner of his
desk and proceeds to interview Raj. His computer screen, which displays Petra's Offer to Settle,
is clearly visible from Raj's seat.
Question 8 of 12
37

What should Gordon have done to minimize access to client information?

[Answer]:
Gordon should have ensured Petras file was closed or filed away. He should have moved the
screen away from Rajs view. Sometimes the lawyers office may allow inadvertent breaches of
confidential information to occur. Lawyers should always position computer screens in waiting
rooms and offices so that they cannot be seen by clients.

After the interview is completed, Raj meets with Randall to go over the details of the retainer
agreement. Randall takes Raj in to the boardroom that Gordon shares with another sole
practitioner. After the meeting with Raj, Randall files the new client file in the shared filing
cabinet in the boardroom.
Question 9 of 12
What precautions can be taken to accommodate the lawyer's practice or office arrangements
while properly managing or protecting confidential client information?
[Answer]:
A number of confidentiality issues arise for lawyers in office-sharing arrangements. It is not
uncommon for sole practitioners to share office premises, staff, and overhead costs with other
lawyers who are also sole practitioners. It is important to keep in mind that unlike in a
partnership, or large firm situation, the clients of one sole practitioner are not the clients of all the
sole practitioners sharing office space. Accordingly, it is important that in office-sharing
arrangements, office layouts, filing procedures, and all other aspects of office procedures and
policies are designed to ensure that among other things, that client confidentiality is maintained.
Unless the client waives his or her right to confidentiality, no client information may be disclosed
to others who are not members of the lawyer's sole practice. The sharing of client information is
prohibited unless the client consents to such an exchange.
In office-sharing arrangements, either the office procedures or layout must be such that no
confidential information is revealed. At the outset of the retainer, the client must be advised of,
and consent to the sharing of information that may result from the shared offices.
Of particular concern in this situation, is the fact that the files of both lawyers are stored in the
same filing cabinet. Unless Gordon takes steps to properly advise his clients, obtain their
consent, and check for potential conflicts that may arise as a result of the shared file cabinet,
Gordon may risk breaching confidential information, and being the subject of a client complaint
for professional misconduct. He should have used a separate filing cabinet for his clients files
and advised his clients of all the implication of his office-sharing arrangements.

38

Randall enters Gordon's office to announce that one of Gordon's clients, Samantha, has dropped
by to deliver documents regarding an urgent matter. Gordon is unable to deal with the matter
immediately as he has to be in court. He instructs Randall to obtain copies of Samantha's
documents and to give her an appointment for the following day. Randall briefly speaks to
Samantha in the reception area as they discuss and review her documents and gives her a time to
return to meet with Gordon the following day.
Question 10 of 12
What steps should Gordon have taken to ensure all members of his law firm complied with the
obligation to protect client information?
[Answer]:
If others were waiting in the reception area when Randall spoke with Samantha, he may have
breached the firm's obligation to maintain confidential Samantha's information. Gordon should
have properly trained Randall and implemented a policy that no confidential client information
should be discussed in the reception or any other public area. These and other professional
conduct obligations of law firm staff can be incorporated into a firm procedure manual and
addressed through employee training.
Some lawyers take a further step and have their support staff members enter into confidentiality
agreements. At minimum, lawyers should implement office procedures and policies to ensure
that client confidentiality is maintained, such as a prohibition against discussing client matters in
areas where such conversations may be overheard by other clients or visitors to the firm.

Before Gordon leaves the office, Randall copies a number of client documents on a computer
thumb drive for Gordon to take home to work on that evening. Gordon places the thumb drive in
his coat pocket and walks two blocks to the courthouse.
In the barristers' lounge, he meets a colleague, Jan, and asks her for advice on one of his client
matters. Gordon and Jan discuss the client matter in detail and continue their discussion as they
leave the courthouse. On the bus home, Gordon receives a call from a former client who wants
him to begin working on a new matter. Gordon briefly discusses the issues with the client, and
Gordon invites him to make an appointment with Randall at the office.
Question 11 of 12
What are the risks of communicating with colleagues and client matters in this manner?
[Answer]:
39

Although it is not uncommon for lawyers to consult with colleagues on how to deal with client matters
generally, or to discuss matters as hypothetical cases, it is always important not to reveal confidential
client information in the process. Lawyers should avoid such discussions in public areas such as
barristers lounges, libraries or halls. Similarly, lawyers should never discuss client matters over cell
phones in public areas.

Thumb drive: the thumb drive placed in a coat pocket can be easily lost, misplaced or stolen.
On the way home, Gordon takes a number of garments to the dry cleaners, including his coat.
The next day, he gets a phone call from the cleaners, telling him that they have found his flash
drive in his coat pocket.
Question 12 of 12
What precautions should Gordon have taken to protect confidential client information?
[Answer]:
Gordon should have adopted the practice of carefully storing portable hard drives. He should also have
used encryption software to protect confidential information contained on the drive.

Improving your Written Communication Skills

A. Supplementary Writing Exercises

Question 1
Following the principles discussed in "Style Tips," re-format and improve this passage:
The amendment thus explains the circumstances under which a lender who has acquired
something more than its initial security interest in a property will be categorized as an "owner or
operator for environmental liability purposes. This is achieved by setting out the requirements
that must be met before liability will be imposed.
First, the lender in this position must take actual "possession of the vessel or facility. This
requirement is open to interpretation, as the term "possession is not defined. Under one
reading, "possession calls for something more than the lender taking simple title or acquiring
one of the additional interests set out above. It also calls for some tangible presence on the
property. This might consist of anything from putting up a protective fence to assuming and
continuing the facilitys ongoing operations. Under an alternative reading, taking "possession
may not be an additional requirement where possession necessarily results from taking title or
40

ownership, as in the case of foreclosure. It would represent an additional requirement only

where the lender has acquired "operation, management, or control without acquiring
ownership. Under this construction, the legislation's inclusion of the term often would appear
superfluous. Reading the plain language of the amendment, then, the first interpretation makes
more sense, as the "possession requirement clearly has been set apart in the amendment as a
separate criterion. For these purposes, it is important to note the fact that this amendment was
enacted to achieve clarity and provide lenders with a more precise idea of what activities they
may undertake within the exemption. Thus, it should be construed narrowly, with ambiguous
terms construed in favour of lender protection.
The second prong of the amendment's two-part test for liability is whether the lender exercises
"actual managerial control...
COMMENTARY
The first version is reader-hostileno graphic devices, little white space, no visible structure.
Suggested Answer:
(transitional and connective devices have been highlighted)
The amendment thus explains the circumstances under which a lender who has acquired
something more than its initial security in a property will be categorized as an "owner or
operator for environmental liability purposes. Before liability will be imposed, however, two
requirements must be met:
(1) the lender must take actual possession of the property;
(2) the lender must exercise actual managerial control over it.

(1) Actual Possession

The lender must take actual "possession of the vessel or facility. Because the amendment does
not define the term "possession, this requirement is open to two possible readings.
Under the first and more likely reading, "possession calls for something more than the lender
taking simple title. It also calls for some tangible presence on the property such as putting up a
protective fence or continuing the facilitys ongoing operations.
Under the second and less likely reading, taking "possession may not be an additional
requirement if it is a necessary consequence of taking title or ownership, as in the case of
foreclosure. Possession would represent an additional requirement only when the lender has
acquired "operation, management, or control without acquiring ownership. Under this less
likely reading, the legislatures inclusion of the term "possession would often be superfluous
and thereby incongruent with the dictates of plain language.
41

Congruent with the plain language of the amendment, the first reading makes more sense in
that "possession is set apart as a separate criterion and is allowed to function as one. Because
the amendment was enacted to give lenders a clearer idea of what activities are exempt from
environmental liability, the amendment should be construed narrowly. Thus any ambiguous
terms should be construed in favour of protecting the lender.
(2) Actual Managerial Control
The second prong of the amendments two-part test for liability is whether the lender exercises
"actual managerial control.
COMMENTARY
The second version has a visible structure that adds coherence and control.

Conjunctive Adverbs and Sentence Variation

Correct the errors in the following sentences. Then try a rewrite (if appropriate) showing
variation in sentence style.
Question 2a
The argument was aimed at the defendant's lawyer, nonetheless, the respondent's lawyer seemed
to react the most.
Answer:
The argument was aimed at the defendant's lawyer; nonetheless, the respondent's lawyer seemed
to react the most.
Suggest Answer:
Although the argument was aimed at the defendant's lawyer, the respondent's lawyer seemed to
react the most.

Conjunctive Adverbs and Sentence Variation

Correct the errors in the following sentences. Then try a rewrite (if appropriate) showing
variation in sentence style.

42

Question 2b
I am aware; however, that the documents arrived later than scheduled.
[Answer]:
I am aware, however, that the documents arrived later than scheduled.

Conjunctive Adverbs and Sentence Variation

Correct the errors in the following sentences. Then try a rewrite (if appropriate) showing
variation in sentence style.
Question 2c
I have to work hard at improving my French, nevertheless I enjoy the subject.
Answer:
I have to work hard at improving my French; nevertheless, I enjoy the subject.
Suggested Answer:
Although I have to work hard at improving my French, I enjoy the subject.

Conjunctive Adverbs and Sentence Variation

Correct the errors in the following sentences. Then try a rewrite (if appropriate) showing
variation in sentence style.
Question 2d
Our calculations were right however our assumptions were wrong.
Answer:
Our calculations were right; however, our assumptions were wrong.
Suggested Answer:
Our calculations were right, but our assumptions were wrong.

43

Conjunctive Adverbs and Sentence Variation

Correct the errors in the following sentences. Then try a rewrite (if appropriate) showing
variation in sentence style.
Question 2e
She filled in the application on Monday, subsequently, she was invited to an interview on Friday.
Answer:
She filled in the application on Monday; subsequently, she was invited to an interview on
Friday.
Suggested Answer:
Having filled in an application on Monday, she was then invited to an interview on Friday.

Pronouns: Choose the correct pronoun in the following sentences:

Question 3a
Five of (we, us, ourselves) took a cab to the hearing.
Answer:
Five of us took a cab to the hearing.

Pronouns: Choose the correct pronoun in the following sentences:

Question 3b
No one is more concerned about the matter than (she, her, herself).
Answer:
No one is more concerned about the matter than she.

44

Pronouns: Choose the correct pronoun in the following sentences:

Question 3c
(Who, Whom) can I partner with on this project?
Answer:
With whom can I partner on this project?

Pronouns: Choose the correct pronoun in the following sentences:

Question 3d
We discovered that it was (they, them, themselves) who started the fire.
Answer:
We discovered that it was they who started the fire.

Pronouns: Choose the correct pronoun in the following sentences:

Question 3e
I am tired of making excuses for (him, his) not being available.
Answer:
I am tired of making excuses for his not being available.

45

Test Yourself
A. Identify the Issues

Scenario 1 of 3
Background: Jane is a criminal defence lawyer. Christine, who is 15, has been charged with
aggravated assault. Her father, Bob, called Jane's office to set up an appointment to discuss
retaining Jane. A conflict of interest check was done using Jane's conflict checking system. This
is Jane's first in-person meeting with her client.
Jane:

Hello, Christine and Bob. Let me begin by saying, Christine, that

whatever you tell me is confidential. It does not leave this room unless
you want it to. How can I help you today?

Bob:

As I said on the phone, Christine has been charged with aggravated

assault. She was released on bail. We just want to resolve this thing as
quickly as possible.

Christine:

Dad, I didn't do anything wrong. Trish started it all.

Bob:

You should start taking some responsibility for what you do.

Christine:

It's Trish's fault. She grabbed my pen-knife.

Jane:

Christine and Bob, let me stop you right there. Today, I just want to get
some very general information. I don't want to get into the details,
Christine, as I want to see what the Crown Attorney has to say. Once I
have that information, we can meet again. Tell me, though, is the
46

complainant in the hospital? Aggravated assault is an indictable offence

and is pretty serious.
Christine:

What do you mean, "complainant?" Are you talking about Trish?

Jane:

Yes, sorry.

Christine:

She's a whiner. She just has some cuts.

Bob:

Could we talk about fees for a minute. How much is this going to cost
me?

Jane:

Well, given your income, legal aid is not available. You have a choice,
either a block fee or an hourly rate of $250.00. On top of that, you will
have to pay for disbursements.

Bob:

Guess we have no choice. So where do we go from here?

Jane:

Id like to see the release conditions. Do you have those? Also, I need to
get disclosure from the Crown Attorney. If there are witnesses, I will
need to interview them. Were there any? There could be a need for
forensic testing. I dont know if anyone has taken photos. Do you have
the next Court appearance date?

Bob:

January 10th.

Jane:

I will be in touch with you in the next few weeks once I have disclosure
from the Crown.

Bob:

Do I get anything in writing that I can take with me? Do I have to sign
anything.

Jane:

No, I don't like creating a lot of unnecessary paperwork. Not to worry I've made some good notes here and I've told you everything you need
47

to know.

Identify the ethical and practice management issues raised in this scenario and explain how you
might have handled the interview.

Model Explanation:
a) INTERVIEWING THE CLIENT IN HER FATHERS PRESENCE
Who is the Client?

Christine is the person charged with a criminal office and she is the client, regardless of who is
paying her legal fees. A lawyer and client relationship presupposes that the client has the
requisite mental ability to make decisions about his or her legal affairs and to give the lawyer
instructions (see Commentary to subrule 2.02(6) of the Rules). While a clients ability to make
decisions depends on such factors as age, intelligence and experience, young people are
generally able to instruct a lawyer. Even where clients are under a disability, subrule 2.02(6)
requires that the lawyer shall, as far as reasonably possible, maintain a normal lawyer and
client relationship.
Also see The Client Service and Communication Guideline, 2.3.2, Clients under Disabilities and
Their Lawful Representatives, which addresses clients under
disabilities.
Possible Waiver of Solicitor-Client Privilege & Confidentiality
When a client attends at a lawyers office with a family member, the lawyer should meet with the
client alone to explain, in plain language, solicitor-client privilege as well as to discuss
confidential information. In terms of solicitor-client privilege, it is important for the client to
understand that the presence of a third party, here the father, at the interview may constitute a
waiver of solicitor-client privilege. This could mean that, for example, the Crown Attorney could
call Bob as a trial witness to testify as to the substance of the interview.
While solicitor-client privilege is the legal right of an individual to refuse to disclose or withhold
relevant information from the other side, from a court or a tribunal about communications with
his/her lawyer to obtain legal advice, confidentiality is different. It is a fiduciary and an ethical
duty and covers more information that just communications between the lawyer and the client
related to the giving or receiving of legal advice. Subrule 2.03(1) states, A lawyer at all times
shall hold in strict confidence all information concerning the business and affairs of the
client.and shall not divulge any such information unless expressly or impliedly authorized by
the client or required by law to do so.
Some young people may want their parents present during the interview. If a parent is present,
however, the young person may be less open with the lawyer and may be unwilling to reveal
sensitive or embarrassing information. A lawyer representing a young person must never forget
48

that the young person is the client and that the fiduciary and ethical duty of confidentiality is
owed to that client, regardless of who might be paying the legal fees. Under the Rules of
Professional Conduct, confidential information may not be disclosed to the parent, or to anyone
else, unless the client so authorizes or unless the disclosure is justified or permitted under
subrules 2.03(2)-(4) of the Rules.
Discussions About Fees
In cases where a parent is paying for the fees, some information about billing and fees may have
to be disclosed to the parent. The lawyer could do this in a separate discussion with the client and
the parent.
Ground rules for disclosure of information should be established at the initial stage of the
retainer and set out in a retainer agreement or letter. This ensures that there is no
misunderstanding as to what information can, and should, be provided to the parent paying the
young persons fees.

Suggestions for Jane

Jane should have made it clear at the outset of the interview that Christine was her client and that
she needed to meet with Christine alone to discuss confidential information, deal with any
sensitive issues and explain solicitor-client privilege. Janes instructions need to come from
Christine. Jane could have let Bob know that she would have a separate conversation with him
and Christine to deal with any billing and fee information that needed to be disclosed.

b)

RETAINERS

Client Service and Communication Guideline

Client Service and Communication Guideline, 2.6, Engagement Letters and Retainer Agreements
outlines that lawyers should consider whether the terms of the engagement should be reduced to
writing to avoid any misunderstanding between lawyer and client.
Suggestions for Jane
It is prudent for lawyers to set out the terms of their relationship in writing. Jane should consider
developing a retainer agreement adapted to her criminal practice, her own needs and those of her
clients. Common terms that she could consider including in any such agreement would deal with:

client identity

scope of service

any client obligations

delegation of work

timetable of the conduct of the matter

method and frequency of communications with the client

49

withdrawal or termination of services

basis on which fees will be set, and the frequency of billing of fees and disbursements

next court date.

As noted under Discussion about Fees above, ground rules for disclosure should be set out in
the retainer agreement or letter.
For more information on retainers, see Establishing Retainers available on the Law Societys
Knowledge Tree.
c) USE OF LEGALESE
Jane uses legal terminology such as complainant and indictable offence. Where possible,
such terms should be avoided. If legal terminology is used, the lawyer should explain the
meaning of such terminology in plain language.
d)

KEEPING THE CLIENT INFORMED

Client Service and Communication Guideline

The Client Service and Communication Guideline, 2.13, Timely and Effective Lawyer- Client
Communications outlines that lawyers should, amongst other things, discuss with clients the
manner of communication between them, how the lawyer will keep the client apprised of the
matter on an ongoing basis, the frequency of reporting and the estimated time it will take for the
lawyer to respond to calls, e-mails, letters or other communications.
Suggestions for Jane
Jane should have discussed with Christine how she would be communicating with her e.g. by email, the frequency of her communications and the estimated time it would take to return calls, emails or other communications. She may also have needed to advise Bob about communications
around fees and billings.

Scenario 2 of 3
Harold is an employment lawyer who focuses on disability issues. Today he is having his first
meeting with Frank, a potential client. Frank has already spoken over the phone with Harold's
assistant and explained that he wants to sue his former employer for wrongful dismissal. Frank
indicates that he has already fired one lawyer in relation to this matter.
Harold:

Hello, Frank. My assistant tells me that your former employer

terminated you. What happened?

Frank:

(Appears distraught). I've been waiting weeks to see you. I left three
50

messages on your office machine and no one bothered to get back to me.
Your assistant didn't even apologize when I finally got a real person on
the other end of the line. What if I missed some important deadline?
Harold:

You have to appreciate that I have a very busy practice here. Now, let's
get back to what happened to you, and then we'll discuss deadlines.

Frank:

Like I told your assistant, I was fired after all these years because of my
environmental allergies. The company was totally insensitive.

Harold:

What do you mean by environmental allergies?

Frank:

I thought you were an expert in disability issues?

Harold:

Must admit, this is a new one for me.

Phone Rings:
Harold:

Excuse me a minute. I have to take this.

Harold Takes a call, from a client, in his office with Frank present. Five minutes pass.
Harold:

Where were we? Oh, yes. The allergies. What are they, anyway?

Frank:

I am allergic to a lot of things in the environment, like mould. The office

was full of it. I kept getting sicker and sicker and had to take time off.
The company did nothing to help me.

Harold:

What did you expect them to do?

Frank:

I expected them to accommodate me. To let me work at home, or maybe

find me another office to work in. Instead they did nothing. Nothing,

51

after all my years slaving for them. Whose side are you on, anyway?
Harold:

What proof do you have that the office was making you sick?

Frank:

Proof how do you expect me to have proof? You know, I don't think
you understand my problem. I'm going to find myself a lawyer who
does.

Harold has no additional contact with Frank, nor does he send any communication
confirming that he has not been retained to act for Frank.

Identify the ethical and practice management issues raised in this scenario and explain how you
might have handled the interview.

Model Explanation
(a) COMPETENCY RETURNING PHONE MESSAGES
Subrule 2.01(1)
Assuming that Frank was correct and his calls had not been returned, this raises possible
competency issues under Rule 2, Relationship to Clients. The definition of a competent lawyer
is, inter alia, one who manages ones practice effectively (para. 2.01(1)(i)) and who performs all
functions conscientiously, diligently, and in a timely and cost-effective manner (para. 2.01(1)
(e)).
Client Service and Communication Guideline
The Client Service and Communication Guideline, 2.13, Timely and Effective Lawyer-Client
Communications recommends that lawyers should ensure that messages left on their phones and
sent by e-mail are promptly returned.
Suggestions for Harold
If he has not already done so, Harold should consider establishing client-oriented
communications policies and technologies. Office procedures and policies regarding voice-mail,
telephone call backs and e-mail should serve to keep clients informed, maintain client
confidentiality and keep lawyers reasonably accessible to their clients. Messages left on the
lawyers voicemail or with the assistant should be returned promptly. See Managing Client
Relationships An Overview which is a Law Society resource listed under the Client Service
and Communication Guideline.

(b) POSSIBLE COMPETENCY ISSUE CONCERNING LACK OF

KNOWLEDGE ABOUT ENVIRONMENTAL ALLERGIES
52

Subrule 2.01(1)
A competent lawyer means a lawyer who has and applies relevant skills, attributes, and values
in a manner appropriate to each matter undertaken on behalf of a client including:
a. knowing general legal principles and procedures and the substantive law and procedure for the
areas of law in which the lawyer practises,
b. recognizing limitations in ones ability to handle a matter or some aspect of it, and taking steps
accordingly to ensure the client is appropriately served,

The Commentary to subrule 2.01(1) states that: A lawyer should not undertake a matter without
honestly feeling competent to handle it or being able to become competent without undue delay,
risk, or expense to the client. This is an ethical consideration and is to be distinguished from the
standard of care that a tribunal would invoke for purposes of determining negligence.
Suggestions for Harold
Given Harolds lack of knowledge and experience with environmental allergies, Harold may not
have been competent to handle the wrongful dismissal suit, even if Frank had wanted to formally
retain him to do so. If Harold had been retained, he would, at a minimum, have had to take steps
to ensure that Frank was appropriately served e.g. through conducting research on environmental
allergies; through seeking the assistance of experts in this area.

(c) MANAGING CLIENT EXPECTATIONS & KEEPING CLIENTS

SATISFIED
Client Service and Communication Guideline
The Client Service and Communication Guideline, 2.1, Introduction states, Successful lawyers
are competent managers of client expectations they manage and meet their clients
expectations.Managing client expectations is accomplished by reaching a consensus between
lawyer and client.
The Client Service and Communication Guideline, 2.2, Initial Contact Between Client and
Lawyer, states that, at the start of the lawyer-client relationship, the lawyer should: identify who
the client(s) is; ascertain the clients objectives and obtain relevant information about the matter.
Keeping Clients Satisfied Tips
This resource, available on the Law Societys website, references the suggestions from Ontario
lawyer Milton Zwicker* as to how lawyers can increase client satisfaction by addressing client
needs for the following:

timeliness promptness in meeting deadlines

reliability consistent and dependable performance

empathy understanding of clients particular needs

53

assurance legal knowledge and skills relevant to the matter as well as credibility and
trustworthiness

tangibility professionalism

Harold has not done an effective job of communicating with Frank. His pointed questions and
adversarial approach fail to build trust in this initial interview and only serve to further agitate an
already irritated client. The fact that Harold accepts a call from another client mid-way through
the interview also raises important issues with respect to client confidentiality (see below) and
professional standards of service and communication.
Suggestions for Harold
Harold could have handled the interview more effectively had he demonstrated greater empathy
and assurance. While he lacked knowledge of environmental allergies, Harold could have tried
to build trust with Frank by asking more open-ended questions that allowed Frank to tell his
story.
There are indicators that Frank might be a difficult client. He has fired one lawyer and appears
agitated. Carole Curtis, in her article Dealing with the Difficult Client, available on the
Knowledge Tree, provides the following tips for lawyers with such clients:

understand your role

protect yourself throughout

be calm, patient, be clear

include staff in the plan for the client

manage expectations.

(d) CONFIDENTIALITY - ACCEPTING CALL FROM CLIENT

Rule 2.03 - Confidentiality
As set out in Rule 2.03, A lawyer at all times shall hold in strict confidence all information
concerning the business and affairs of the client acquired in the court of the professional
relationship.
If Harold disclosed any confidential client information during the call without the authorization
of the caller client, then he would be breaching this Rule.
Suggestions for Harold
Lawyers should avoid taking calls during client interviews. If the call was from a client and was
urgent, Harold could have excused himself and taken the call elsewhere or asked Frank to step
outside while he took the call.

54

(e) NON-ENGAGEMENT LETTER

Client Service and Communication Guideline
The Client Service and Communication Guideline, 2.7, Non-Engagement Letter, states that: If a
lawyer determines that he or she will not provide legal services to a client, either because the
client does not retain the lawyer, or because the lawyer refuses the engagement, the lawyer
should consider whether to confirm the non-engagement in writing immediately and advise of
any limitation periods.
Suggestions for Harold
Harold should have sent a non-engagement letter to Frank confirming the non-engagement and
addressing the issue of limitation periods. The limitation period is critical and was not addressed
during the interview, despite Franks obvious concerns about it.
*Milton Zwicker, author, Chapter 7 of R.C. Reed, ed., Win-Win Billing Strategies, Alternatives
That Satisfy your Clients and You (Chicago: American Bar Association Section of Law Practice
Management 1992).

Scenario 3 of 3
Background: John is a business immigration lawyer. He has many corporate clients who retain
him to obtain work permits for foreign employees to come and work in Canada. Today he
receives a call from one of his corporate clients. Karen is the instructing officer for the corporate
client.
Karen:

Hi, John. It's been awhile since we spoke. Listen, we need a work
permit as soon as possible for a biologist that we have offered a job
to. She is actually here in Toronto right now on a study visa doing
some computer studies.

John:

Nice to hear from you, Karen. Have you done a detailed job offer?
What about the positive labour market opinion from HRSDC?

Karen:

Of course, John. We have everything together. The employee's

name is Olga Tarasov and she is from Minsk. She has her
application ready to go. She could drop her documents off at your
office. I should just let you know that her English is not too good.

A week later, Ms. Tarasov comes into John's office with her documents. She has a short
meeting with him

55

John:

Nice to meet you, Ms. Tarasov. I understand you have a job offer
from PhX. Do you have the application documents for me?

Olga:

Yes, yes. Excuse me, my English not so good. Here is everything.

John:

Before I look at these, I want to make something clear. I represent

PhX, not you. Do you understand?

Olga:

Alright.

After reviewing her documents, John asks Olga a few questions about the application
for a work permit. In responding, Olga indicates to John that she is hoping to quickly
move from the job with PhX to a research position at the University of Toronto, which
is where she really wants to work.
John:

Well, Ms. Tarasov, this is something that I will have to raise with
your new employer.

Olga:

No, you can say nothing. You help me too.

Identify the ethical and practice management issues raised in this scenario and explain how you
might have handled the interview.

Model Explanation
a) Who is the Client, Unrepresented Clients and Client Identification
Subrule 2.02(1.1)
When a lawyer is employed or retained by an organization, including a corporation, the lawyer
acts for the organization notwithstanding that the instructions may be received from an officer,
employee, agent or representative of that organization.
Client Service and Communication
The Client Service and Communication Guideline, 2.3.1, Institutional Clients, states that lawyers
acting for institutional clients need to determine who is properly instructing them on behalf of
the institutional client.
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Subrule 2.04(14)
When a lawyer is dealing on a clients behalf with an unrepresented person, the lawyer shall:
a. urge the unrepresented person to obtain independent legal representation
b. take care that the unrepresented person is not proceeding under the impression that his or her
interests will be protected by the lawyer, and
c. make it clear to the unrepresented person that the lawyer is acting exclusively in the interests of
the client and accordingly his or her comments may be partisan.

In scenario 3, John acts for the corporate client. While he indicates to Ms. Tarasov that he does
not act for her, he should have been more clear on this point, particularly since Ms. Tarasovs
English is not good. As many of the lawyers ethical obligations flow from the relationship
between the lawyer and the client, John, should have made it clear at the outset that any
information that Ms. Tarasov provides to him would have to be disclosed to his client, PhX.
Had John done this, he would have avoided the situation where Ms. Tarasov disclosed
information that she did not want disclosed to her employer. Her disclosure has potentially put
John in a conflict situation with his corporate client. John should also have urged Ms. Tarasov
to obtain independent legal representation with respect to the work permit.
There may be situations where a lawyer acts for both the corporate employer and the future
employee. In that case, the lawyer would be in a joint retainer with the employer and employee
and must comply with subrules (6)-(10) of the Rules dealing with joint retainers. If there is a
conflict of interest or a potential conflict, then the lawyer cannot enter into joint retainer.
By-Law 7.1
Part III of By-Law 7.1 deals with client identification and verification. When lawyers are
retained to provide legal services, they must identify their clients (see subsection 22(1) of the ByLaw). Where the client is a corporation, the lawyer must obtain and keep a record of:

the organizations full name

the organizations business address and phone number, if any

the organizations incorporation or business identification number and the place of issue of its
incorporation or business identification number, if any

the general nature of the type of business or businesses or activity or activities engaged in by the
organization unless the organization is a financial institution, government body or company that
is nor a private company

the name, position, and contact information of individuals authorized to provide instructions on
behalf of the organization.

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If the lawyer has already obtained and recorded this information from a corporate client, the
lawyer does not need to do this again when he acts for that same client (see subsection 23(3) of
By-Law 7.1).
If the lawyer is acting for both a corporate client and an individual(s) in a joint retainer situation,
then the lawyer also has to obtain and keep a record of the following information about each
individual:

the clients full name

the clients business address and business phone number, if applicable

the clients home address and home phone number

the clients occupation or occupations.

Suggestions for John:

As indicated, John should have made it clear to Ms. Tarasov at the outset of the meeting that he
was not her lawyer and that he represented the interests of PhX. He should also have made it
clear that he would have to disclose anything that she told him that was relevant to the work
permit to his client. He should also have suggested to Ms. Tarasov that she obtain independent
legal representation with respect to her application for the work permit.

b) Language Barriers:
It is critical that a lawyer be able to communicate with his/her client. Absent such
communication, the lawyer cannot obtain the necessary information to prepare for the handling
of the clients legal matter. When a client speaks little or no English, or comes from a different
culture, this raises communication issues for the lawyer.
Sometimes this challenge is met by using family members who speak English well. However,
when relying on a family member as a translator, the lawyer must be aware of issues related to
confidentiality and any potential loss of solicitor/client privilege. It may be necessary to obtain
the services of an interpreter.
Lawyers should keep in mind that when a third party is present during an interview, this may
result in a waiver of solicitor-client privilege.
Suggestions for John:
In scenario 3, Ms. Tarasov is not the client. This being said, it was important for any
communication with her to be clear, particularly since she is unrepresented. John could have
assessed Ms. Tarasovs language ability over the phone and made a determination as to whether
she needed to bring someone with her to his office who could communicate in English and
Russian.

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Module 3 Managing the Client File

Introduction
A. Test Your File Management IQ

Question 1 of 5
Undertakings should be confirmed in writing and recorded in the lawyers time management
system.
Option: True
Option: False
The Commentary to Subrule 6.03(10) states that: Undertakings should be written or confirmed
in writing and should be absolutely unambiguous in their terms.
The File Management Guideline, 3.10, Managing Undertakings, states that lawyers should
implement systems to ensure that every undertaking is:

clear

confirmed in writing

recorded in the lawyers time management system

satisfied according to its terms

in accordance with Subrules 4.01(7): A lawyer shall strictly and scrupulously carry out an
undertaking given to the tribunal or to another legal practitioner in the course of litigation.
and 6.03(10): A lawyer shall not give an undertaking that cannot be fulfilled and shall fulfill
every undertaking given..

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Question 2 of 5
Susan, a lawyer, feels that since she has an excellent memory, she does not have to document any
of her meetings, conversations or telephone communications.
Option: True
Option: False
The File Management Guideline, 3.9, Managing Documents, states that lawyers should consider
implementing and employing systems to document every meeting, conversation or telephone
communication, including telephone messages left and received, by way of dated file notation or memo to
file.

Question 3 of 5
John acted in a joint retainer for a purchaser/borrower and a lender in a mortgage transaction.
The lender has concerns that the borrower/purchaser may have misrepresented the purchase price
of the property and is considering selling the property under power of sale. The lender wants
John to provide copies of all file information, including documents and correspondence relating
to the mortgage transaction. John may not, for reasons of confidentiality, release the requested
information to the lender.
Option: True
Option: False
In a joint retainer, there is no confidentiality as between the parties to the retainer (see Subrule
2.04(6)(b): Except as provided in subrule (8.2), where a lawyer accepts employment from more than
one client in a matter or transaction, the lawyer shall advise the clients that (a) the lawyer has been
asked to act for both or all of them, (b) no information received in connection with the matter
from one can be treated as confidential so far as any of the others are concerned, and (c) if a
conflict develops that cannot be resolved, the lawyer cannot continue to act for both or all of them
and may have to withdraw completely.) (see also Rule 2.04(6.1): Where a lawyer acts for both the
borrower and the lender in a mortgage or loan transaction, the lawyer shall disclose to the borrower
and the lender, in writing, before the advance or release of the mortgage or loan funds, all material
information that is relevant to the transaction.) . While John is entitled to release information from
the file to the lender, it would be prudent for him to advise the borrower of the request, and to
make copies of the information to be provided to the lender also available to the borrower. When
acting in a joint retainer, lawyers have a duty to keep an even hand as between the clients and
must not prefer the interests of one of the clients over the other(s).
If the file contains original documents that belong to both clients, John should require a written
direction from both parties authorizing the release of such documents to one of the parties, or
alternatively, a court order authorizing the release.

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Question 4 of 5
Rachel was retained to act for a husband and wife in an immigration matter in 2006. During the
retainer, Rachels clients provided her with a copy of their original marriage certificate, dated
April 2004. Rachels clients have now fired her and have asked her to return the original
marriage certificate to them. Rachel does not need to return the original marriage certificate but
is required to provide a copy to her former clients.
Option: True
Option: False
Subrule 2.09(9)(a) states that when a lawyer is discharged or withdraws, the lawyer must, subject
to the lawyers right to a lien, return to the client(s) all papers and property to which the client is
entitled.
Again, subject to the lawyers right to a lien, documents which came into existence prior to the
retainer, but which were given to the lawyer by the client during the course of the retainer,
belong to the client. On termination of the retainer, the original documents must be returned to
their owners.
Rule 2.09(9):
Upon discharge or withdrawal, a lawyer shall:
a) subject to the lawyers right to a lien, deliver to or to the order of the client all papers and
property to which the client is entitled,
(b) give the client all information that may be required in connection with the case or matter,
(c) account for all funds of the client then held or previously dealt with, including the refunding of
any remuneration not earned during the representation,
(d) promptly render an account for outstanding fees and disbursements, and
(e) co-operate with the successor legal practitioner so as to minimize expense and avoid prejudice to
the client.

Question 5 of 5
Ed has recently retired. He has returned to his clients all their documents and property. Ed wants
to retain copies of certain documents to assist in defending against any future claims that could
be made against him. He is storing client files with such information in boxes in his basement.
Ed does not think this raises any practice management concerns.
Option: True
Option: False

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As The File Management Guideline, 3.12.4, Storage, states, closed files should be stored in
secure cabinets or locations in order to:

protect the files from destruction or damage

maintain client confidentiality

ensure files are filed in an orderly fashion for easy retrieval, should that be necessary.

Gathering the Facts

A. Case File: Floyd v. White House Siding

Raymond Floyd v. White House Siding Company Ltd.

Facts:
Raymond Floyd is 37 years old and single. He holds a B.Sc. from the University of Toronto.
Prior to April 16, YR 0 he was employed by White House Siding Company Ltd. for a period of
approximately 14 years. He began as a warehouse supervisor and then become a salesman for
approximately six years. For the past three years he was sales manager, overseeing a head office
sales force of four. As sales manager, Raymond reported to the Vice President, Marketing. He
earned an annual salary of $42,000, and enjoyed the use of a company car. His other benefits
consisted of a medical and dental plan and a company pension plan. On December 31, YR 1, he
received an employee performance evaluation which rated him as Outstanding in the category
of Leadership; Meets Job Requirements in Productivity, Meeting Budgets & Schedules, Work
Habits, and Planning & Organization; and Exceeds Job Requirements in the other 11 categories.
White House Siding is in the wholesale aluminium siding business, where it specializes in
supplying retailers and installers with aluminium siding for residential applications. The
company employs approximately 20 employees, down from about 25 one year ago. The
reduction in work force is largely attributable to reduced sales. White House has been in the
aluminium siding business for approximately 25 years.
In August YR-1, following a management restructuring, the position of Vice-President,
Marketing was created and a new MBA graduate, Chuck Close, was hired to fill it. Close and
Raymond did not hit it off and had several flare-ups during the first six months of their
relationship. Raymond did not feel that Close was sufficiently appreciative of his extensive
experience and he was further of the view that Closes new management style (such as requiring
written weekly reports) was inappropriate. For his part, Close did not believe that Raymond was
doing his job properly. Further, following a tip, Close began to believe there was evidence that
Raymond had been padding his expense accounts for some years.
Another particularly acrimonious exchange took place between Raymond and Close at the end of
March, as Raymond was about to commence a two-week vacation. Upon returning to the city on
Saturday, April 17, Raymond found a letter in his mailbox from the President of White House
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informing him that his employment was being terminated effective April 16, YR 0. The letter
enclosed a cheque for eight weeks salary, less withholding tax, apparently pursuant to the
Employment Standards Act, 2000.
Raymond wishes to claim against White House for wrongful dismissal. He does not remember
signing a written employment agreement but recalls some sort of verbal agreement on the day
that he was hired. The position of the company is that it had cause for dismissal and that
Raymond owes it money on account of his inflated expense account.
B. Good Facts/Bad Facts Analysis:

The starting point for developing a theory of the case is separating the good facts from the
bad facts of a case. This should be done early on and repeated as the case develops and new
facts are discovered. In particular, the process of separating the good facts from the bad facts
assists in the following:
identifying the strengths and weaknesses of your case
identifying possible causes of action and/or defences available to your client
identifying possible causes of action and/or defences available to the other side
highlighting gaps in information and identifying areas where more facts are needed
identifying areas where additional legal research is required
creating a starting point for the task of gathering evidence
Assume that you act for the plaintiff, Raymond Floyd. Using the Floyd v. White House
Siding case file, create a list of the good facts and bad facts of the case from the plaintiffs
point of view.
[Answer]:

Floyd Case: Good Facts

It wasnt until Chuck Case came to White House that Floyd began having problems
suggests personality conflict rather than performance issue.

Fights and disagreements between Case and Floyd suggest personality conflict rather
than performance issue.

Most recent performance evaluation shows that Floyd had no documented performance
issues.

Floyd was an employee of long-term service over 14 years and in a management

position. Both factors suggest that he would be entitled to far more than 8 weeks notice.

Notice of termination received while Floyd was on vacation may show lack of good
faith on the part of White House.

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Documents in file indicate that White House did not look into Floyds expense account
usage until after notice of termination was given White House wont be able to show
just cause at the time of termination.

Floyd Case: Bad Facts

Evidence supports expense account allegation could amount to just cause.

Memo from Chuck Case to Harry Owen (December 5, YR-1) suggests legitimate
performance issues and not just personality conflict.

Memo from Will Maunder to Raymond Floyd (April 1, YR-0) suggests that White House
gave Floyd warning of possible termination.

Developing a Theory of the Case

A. Theory of the Case How and Why Developed
Theory of the Case
How and Why Developed? An Overview

1. INTRODUCTION
Findings of fact are necessary to a resolution of disputes between parties. The function of the
trial is to resolve factual disputes. One cannot overstate the importance of the facts. Advocacy
skills alone, without thorough preparation and mastery of the facts, will not win a case. There is
no substitute for thorough and rigorous preparation. While, of course, there must be preparation
of the law, the more important preparation is the preparation of the evidence, the gathering of the
facts and the marshalling of the evidence in a persuasive manner to establish the facts. It must be
remembered that the law will be applied only after the facts have been found by the judge or
jury. Once the facts are made clear, there is generally no great difficulty about the applicable law.
Counsels task is to structure and present the evidence in an organized and persuasive manner so
as to lead the judge or jury to findings of fact in your clients favour.
An effective advocate presents a persuasive story through organization, logic, simplicity,
sincerity, and a coherent theory anchored by a theme. The theory and theme of the case are not
only necessary persuasive tools, but also serve to focus counsel on the critical evidentiary and
legal issues that will arise at the trial, and help counsel to organize and simplify the trial
presentation by defining what is relevant and focussing the trial presentation on what is relevant
and important.
The terms theory of the case and theme of the case are frequently used synonymously. There
is, however, a distinction between a theory and a theme. The theory of the case is the adaptation
of the story to the legal issues in the case. The theme is the pivotal element of the theory, or the
one idea that tells the judge or jury why your client should win the case. The theory of the case
appeals to the intellect and the theme appeals to the emotions. Perceiving the distinction is
important to understanding why it is imperative to formulate a theory early in the case and how
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theory and theme, although both important and frequently intertwined, play different roles in the
pre-trial and trial process.

2. THEORY OF THE CASE

It is essential to develop a theory of the case early and to act in accordance with it throughout the
case. Some have described the theory of the case as counsels game plan or counsels strategy.
Others have defined the theory of the case as counsels position and approach to all of the
undisputed and disputed evidence, which will be presented at trial. The theory of the case is
much more than a game plan, case strategy or position and approach to the evidence.
The theory of the case is not just the legal theory, nor the elements of the cause of action or
defence; i.e., that which must be shown to permit recovery or establish a defence; nor is it just
the factual theory, i.e., the explanation of why some testimony is credible while some is not. It is
more than the legal elements of the cause of action and more than the combination of facts and
law. James W. McElhaney, in The Picture Method of Trial Advocacy, 1992 1, described the theory
of the case as the legal and factual theory of what happened when tested in the fire of credibility
and put in a way that reflects the values of the community.
The theory of the case is the adaptation of the story to the legal issues in the case. The theory of
the case should combine the essential facts and the legal position in such a way as to lead to the
conclusion that your clients claim or defence must succeed. The theory must be logical, simple,
plausible, understandable and accord with common sense. As well, it must address the legal
elements of the claim or the defence upon which the law permits recovery or establishes a
defence.
The legal theory is the framework for the facts. It is with the facts themselves that counsel should
spend the most time. The real test for a successful factual theory of the case is whether it will
stand up. It must make sense, be logical and coherent and explain all of the uncontroverted
evidence and as much of the opponents evidence as possible. It must also account for what is
weak in your clients case as well as what is strong. It should naturally appeal to the inherent
sense of justice, but above all it must be plausible.
The theory of the case is more detailed and fact specific than a list of abstract legal elements. It is
also more than a summary of the important or essential facts. The theory is the account of the
ultimate facts counsel must prove to justify the legal outcome desired. The theory of the case
should be expressed in a single paragraph that combines the specific facts and the applicable
legal principles in such a way as to justify the desired legal outcome and lead the judge or jury to
the inescapable conclusion that your client must succeed.
In addition to focussing the judge or jury on the basic framework of the story which counsel is
going to present, the development of a theory of the case serves as an important organizational
tool for counsel. It sets the structure for the entire action. It requires counsel to review the
elements of each cause of action. It requires counsel to analyse how each required element will
be proven through witnesses or other evidence. It requires counsel to analyse contradictory and
disputed facts and other evidentiary problems which may arise and how these will be addressed.
In short, the development of a case theory helps counsel focus his or her preparation and
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presentation of the story to the judge or jury and defines what is relevant and important
information.
Conventional wisdom is that there should be only one theory. At the beginning of the case and as
the case progresses through production and pre-trial discovery, counsel may have several
theories of the case, some that compliment each other and others that may be inconsistent. One
of the functions of the pre-trial proceedings is to eliminate theories lacking legal or factual merit.
Certainly by the completion of the discovery stage all theories lacking legal or factual merit
should be eliminated. Counsel must consider how various theories will impact upon one another.
Certain theories may complement one another; however, other theories may conflict. Conflicting
theories should never be presented either to a judge or a jury. Conflicting theories will not only
undermine the credibility of your case, but will confuse rather than simplify the trial and
challenge the common sense of the judge or jury. Multiple theories may also detract from the
primary theory.
Some insecure counsel believe that if one theory is good, then two or more are better. They adopt
the shotgun approach hoping that one of the theories will stick. Should counsel take multiple
theories to trial? The initial impulse might be to do so to be on the safe side. In my view, there
should be only one theory of the case. It is certainly inadvisable to take multiple theories to trial
when the theories are inconsistent. There are inherent dangers in inconsistent theories.
Inconsistent theories undermine all of them, as it implies that counsel believes none of them.
This applies not only at the trial, but also to the pretrial proceedings, especially where a casemanagement judge will be hearing all pre-trial motions and proceedings and will become
familiar with the case. It is risky even taking multiple consistent theories to trial. Urging
secondary theories can weaken your primary contention. Pressing several theories creates the
danger that the primary theory will be weakened if not entirely lost in the confusion. Having one
theory of the case is the most consistent and understandable way of presenting a case to a judge
or jury. While counsel may get away with multiple consistent theories with a judge there should
be only one theory with a jury. When faced with multiple theories, counsel must exercise
strategic judgment and choose a single theory for trial.

3. THEME
Websters New World Dictionary defines theme as a recurring, unifying subject or idea. A
theme song is a recurring song or melody in a film, musical or television program, often intended
to set the mood, that becomes popularly identified with the work. Themes and theme songs are
an integral and effective advertising tool. Effective advertising campaigns frequently incorporate
a short statement to describe the product and its specific and distinctive qualities and
characteristics that identifies it with the manufacturer. Like effective advertising, or like a good
story, a case should have a theme or focus.
Just as the theme in advertising brings a specific and distinctive quality and characteristic to a
product and provokes recognition of the product, the theme of the case is the label that anchors
the theory to the morality of your clients position. As stated by Steven Lubet in Modern Trial
Advocacy Analysis and Practice, 2 a logical theory tells the trier of fact the reason why a verdict
must be entered for your client; a moral theme shows why it should be entered. An effective
theme is the moral of the story, which motivates the trier of fact to action. The theme shows why
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the desired result is just, deserved or necessary. The most compelling themes appeal to shared
values, civic virtues, or common motivations. The theme is the atmosphere counsel wishes to
create in the mind of the judge or jury. Just as changing background soundtrack music can make
a sequence in a film seem sinister, tragic, comedic, etc., the theme can set the tone for the case.
The right theme will set the tone for the case and demonstrate the justness of your clients cause.
Judges and juries will bend the law to fit the equity of the case. The theme can help put equity on
your clients side. The right theme will remain with the judge or jury during the deliberation and
will help persuade the judge or jury that a verdict in your clients favour is just and reasonable.
Just as there should be only one theory, there should be only one theme and it should dominate
everything. An effective theme is easy to repeat, easy to understand and easy to integrate
throughout the course of the trial. The theme should be developed early and maintained
throughout closing. The theme should be unique to the case, and simplify and make essential
facts memorable. An effective case theme is easy to remember, one that a trier of fact can use
during deliberations; is consistent with, and supported by the evidence; and is logical and
consistent with the judges or jurys concepts of fairness and justice. In short, the theme should
capture the theory of the case. To maintain credibility the theme should be consistent with every
aspect of the case. The theme should present the underlying facts and legal theory and tie as
much of the evidence as possible into a credible whole.
It is important to evaluate the parties strengths and weaknesses before deciding on the most
effective theme. Generally speaking, a theme is most effective by presenting your client as the
focus or star of the case. You should, however, consider how much star quality your client
has. The client is not always the most powerful aspect of the case or may not always have the
most appealing characteristics. It is important, therefore, to evaluate your clients strengths and
weaknesses before deciding on the most effective case theme. Is the plaintiff a trusted employee,
an able worker, a devoted spouse and parent, a respected member of the community? If your
client possesses favourable characteristics, values and standards, your client should be the focus
of the theme. If your client does not possess star qualities, then perhaps the focus of the theme
should be the other party. Regardless of who is made the focus of the theme, a good case theme
should be unique, simple and easily understood as embracing the central facts of the case.
An effective theme often highlights contrasts between the parties or between the sides in a case,
or both. For example, the theme may contrast the consumer and the manufacturer, the severely
injured plaintiff and the powerful corporate defendant, or the plaintiff victimized by big business
that ignored public safety, failed to warn or was driven by greed. Depending on the plaintiff and
the nature of the claim, the theme may focus on the plaintiff as the victim. In other cases, the
focus of the theme may be the defendant. For example, in a breach of trust or fraud case the
theme might be: this is a case about greed and what it can lead to in a failing real estate
market, or this is a case about misplaced trust, or the plaintiff trusted the wrong people to do
the right thing. Inventive counsel can often come up with a catchy phrase for a theme that will
capture the theory, embrace the central facts of the case and tie the case together for the judge or
jury. David B. Baum in Creating a Theme 3 gives the following examples which illustrate a
simple, unique, and easily understood theme embracing the central facts of the case and the
elements of an effective theme:
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Injury case:
A case of broken bones and broken dreams.
Product case:
The car with every option but safety.
Negligence case:
The doctor who never looked past the chart to see the patient.
This is a case where a young athlete entered the hospital for minor foot surgery and left in a
coma.
This is a company that wont take responsibility for its safety.
Whatever the theme, it must be developed early in the case and reinforced throughout the trial.
The theme should be introduced to the judge or jury during the opening statement and
incorporated and reinforced throughout the trial, during examination-in-chief, cross-examination
and final argument.

4.

DEVELOPING THE THEORY

The starting point for preparing for trial is developing the theory of the case. The starting point
for developing the theory is a thorough investigation of the facts, the identification of the issues
in the case, a consideration of the applicable law and the identification of the evidence available
on each issue. This will include a consideration of how to get the necessary facts into evidence.
In addition, consideration must be given to the contrary evidence anticipated from the other side.
This will include an assessment of the opponents theory of the case.
To determine the strengths and weaknesses not only of your clients case, but also of your
opponents case, a thorough investigation of the facts is essential. Development of the theory
begins with the initial client interview. However, counsel must keep an open mind to allow all
possible theories to present themselves. The investigation should include not only a detailed
interview with your client, but also an interview of witnesses or potential witnesses (adverse as
well as favourable) and a review of documents and other physical evidence. It is critical to
launch the investigation as soon as you are retained for obvious reasons, since witnesses
recollections fade with time, witnesses become increasingly difficult to locate with the passage
of time, and with the passage of time documentary and other physical evidence may disappear.
Counsel should quickly gather, protect and preserve the evidence for trial.
Counsel must also consider the law. Counsel must consider the causes of action or defences and
the requisite elements of the causes of action or defences. Research into the law may expose new
factual areas to investigate.

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After having considered the elements of each cause of action or defence, counsel should analyse
how he or she intends to prove each of the requisite elements through available witnesses and
other evidence. This will include an analysis of admitted facts, readily provable facts,
contradictory facts and facts which will be hotly disputed, the witnesses and documentary and
other evidence the other side may present to put those facts in issue. In addition to the
consideration of the contrary evidence anticipated from the other side, consideration should be
given to plausible opposing theories of the case. Counsel will also have to consider the possible
evidentiary problems that may arise and how those problems may be resolved or avoided.
Having investigated the case, i.e., interviewed your client and potential witnesses, reviewed the
documents and other evidence, researched the law, considered possible evidentiary problems,
reviewed uncontested facts as well as your clients version of the disputed facts and the opposing
theory or theories, you are now in a position to formulate the theory of the case. To assist you in
formulating or developing the theory of the case, James W. McElhaney 4 suggests that counsel
should ask the following basic questions:

Is this what really happened?

Does this statement sound plausible?

Does it add up to a claim or defence?

The theory of the case as well as the nature of the claim determines not only whether there
should be multiple plaintiffs, but also whether there should be multiple defendants. For example,
counsel will have to consider whether corporate officers and directors should be defendants
along with the corporation. Counsel will have to consider whether the investigation of the facts
and the theory support a claim for fraud or tort committed by the officers or directors giving rise
to a claim in their personal capacity. 5
A number of tactical considerations must be borne in mind by counsel for a plaintiff
contemplating proceedings with other co-plaintiffs, including possible conflict, true commonality
of their position, varying opinions on the manner in which the case should proceed, liability for
costs and the strengths and weaknesses of the various plaintiffs, including their characteristics or
star qualities. Unfavourable characteristics or other weaknesses of one or more of the coplaintiffs may detract from the appealing characteristics and strengths of the other co-plaintiffs.
The joinder of multiple defendants must also be given extremely careful consideration. While it
may seem like a good idea on the part of the plaintiffs to use the shotgun or scorched earth
approach and sue everyone in sight on the theory that the more defendants there are, the more
likely one will be found liable, or that it may be easier to settle with multiple defendants on the
basis that each will contribute a smaller amount, this approach may prove to be an imprudent or
even dangerous tactic. The inclusion of multiple defendants solely for the tactic of attempting to
force a settlement or with the hope that one or more of the defendants will be found liable, where
there is no sound factual basis and is not in keeping with the theory of the case, undermines the
valid theory of the case, as well as creates the danger of undermining counsels credibility with

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the judge or jury. Furthermore, counsel must bear in mind the cost consequences of asserting
unfounded and unmeritorious claims, particularly unfounded allegations of fraud or dishonesty.
(ii) Extra-Legal Tactics

A particular theory and theme may lend themselves to effective extra-legal manoeuvring.
Keeping in mind the desired result, namely to achieve a satisfactory resolution of the dispute, the
result may be achievable through action taken outside the legal process. A particularly resonant
theory and theme may lend themselves to motivation of the opposite party by way of adverse
publicity or merely the risk of adverse publicity. Some businesses such as financial institutions,
which highly value public trust and confidence, may be particularly adverse to bad publicity.
Where the facts of the case are particularly egregious or the plaintiff is a particularly sympathetic
party, adverse publicity or the risk of it may bring about the desired result.
(iii) Settlement

As settlement can take place at any stage of the litigation process, settlement strategy should
form part of the litigation strategy. Settlement usually takes place after production of documents
and examination for discovery, at or after the pre-trial conference, or more often just before trial.
While it is desirable to settle cases early in order to avoid unnecessary time and expense, counsel
is not in a position to make intelligent settlement decisions unless he or she is thoroughly
prepared and able to assess the strengths and weaknesses of the case. Having thoroughly
investigated the case, developed a theory of the case and assessed the strengths and weaknesses
of the case, counsel is now positioned to discuss settlement.
While there may be many external reasons to settle and to settle at an early stage, such as the
expense of the litigation, the financial condition of the parties or the death of a key witness,
internal weakness in your clients case may also dictate the decision. If unfavourable evidence is
discovered, or the witnesses either do not support or undermine the theory of the case, counsel
will be negotiating from a position of weakness and it may be prudent to settle before the
unfavourable evidence or other weakness have to be disclosed to the opposing party or are
otherwise discovered. On the other hand, if the evidence supports counsels theory of the case,
counsel is negotiating from a position of strength.
(iv) Plaintiff or Defendant

Counsel should consider whether the client would be better off as a defendant than as a plaintiff
in the proceedings. Often, a client will have no choice. However, many times, clients, such as
landlords, mortgagees or other secured parties will have the choice of exercising self-help
remedies and leaving the other side to commence proceedings and asserting claims by
counterclaim.
The theory of the case, the character and personality of the client and the nature of the case are
some of the factors which counsel should consider in deciding whether there are advantages to
the client being the catcher rather than the pitcher. There may be instances where the clients
story and counsels theory will have the greatest strength and will be most persuasive after the
other sides version has been told. As well, there may be disadvantages to being plaintiff and
bearing the burden of proof. Counsel must weigh any disadvantages of the client being plaintiff
against the advantages of controlling the litigation, telling the story first and creating the
atmosphere in the minds of the judge or jury.
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(v) Pleadings

The starting point for trial preparation is developing a coherent theory of the case. This theory
should be reflected in the pleadings. The pleadings are the road map for production and
discovery and should define with clarity and precision the legal and factual issues in controversy
between the parties that must be resolved by trial. The pleadings are the first documents that a
judge reads and therefore they are counsels first opportunity to put forth the theory of the case.
Pleadings should tell the partys story and reflect the theory of the case in such a way as to make
the desired legal result seem inevitable. In other words, the pleadings are the first piece of written
advocacy. Counsel should seize the opportunity to advance the theory of the case and begin on
the creation of the theme by a pleading whose hallmarks are conciseness, precision, brevity and
consistency in word usage.
(vi) Judge or Jury

Early in the case counsel must decide the fundamental tactical question of whether the case
should be tried by a jury. A jury notice must be served before the close of pleadings. 6 Assuming
the nature of the claim is not one where a jury trial is precluded by section 108(2) of the Courts
of Justice Act, the decision as to whether a jury notice should be served is one of personal
judgment. However, a number of factors should be considered before making the decision. One
such factor is the theory of the case and whether it may be easier to sell the theory to a jury than
a judge. If you have a sympathetic plaintiff or a sympathetic case, or the equities are in your
clients favour, a jury may be better for the plaintiff.
Counsel must also consider how the client will fare before a jury, whether the client and other
critical witnesses will make good witnesses and how the opponents witnesses will stack up
before a jury.
Other factors which should be considered are whether the dispute will likely be factual, whether
the case involves primarily legal issues which should be tried by a judge, and whether there are
weaknesses in the case that may be overlooked by a jury but not by a judge.
(vii)

Discovery

Just as the term connotes, the main purpose of discovery, which includes discovery of documents
as well as the examinations for discovery, is to discover the evidence upon which the opponent
relies to establish a case or the defence. There are, of course, other purposes of discovery. These
include to obtain admissions to help prove the case, to obtain admissions that will undermine the
opponents case, to evaluate the witness and to narrow the issues to be decided at trial. However,
discovery is primarily the learning stage; the time to learn about the case to be met and thereby
eliminate the prospect of surprise at trial.
Discovery also provides counsel with the opportunity to develop and test his or her own theory
of the case. Through a thorough and focussed examination, judiciously and sparingly sprinkled
with leading questions and cross-examination, counsel is able to develop and test the theory of
the case. The theory of the case will guide counsels enquiries and the evidence provided may
result in the elimination of theories and the emergence of new theories. Similarly, the
examination of your client provides an opportunity to test the theory of your case and to
demonstrate whether your client is able to convincingly sell the theory at trial. 7 Discovery should
act as a fact filter for theories and should result in the elimination of all theories lacking legal or
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factual merit and lead to a closer scrutiny of those theories that will be difficult to prove. The
elimination of a theory or the development of a new theory may necessitate amendments to the
pleadings.
Discovery is also the opportunity to learn and better understand the opponents theory of the
case.

APPLICATION AND ENHANCEMENT OF THEORY AND THEME AT

TRIAL
The trial is the playing out of the theory of the case which has been developed in advance of the
trial. If the trial is to be a persuasive story, the theory and the theme of the case must be woven
through every aspect of the trial, from the opening statement to the final argument. Professor
Edward J. Imwinkelried makes this comment:
The judgments made on the theory and theme are vital because they should determine almost
everything that the attorney does at trial. As a well-respected litigator has remarked, the trial is
only the playing out of the theory. Every step at trial is explicable in terms of the theory and
theme, and explaining the trial in these terms gives new meaning to many of the old bromides
about trial advocacy. 8
The theory of the case and how it will be developed, enhanced and maintained throughout the
trial will determine virtually every aspect of the trial. Counsel must, therefore, consider how the
theory can best be advanced and maintained throughout the trial. A detailed discussion of the
techniques of all aspects of persuasion at trial through the effective use of the theory and theme
of the case is beyond the scope of this paper. For an excellent and thorough discussion of the
subject, I highly recommend to you Steven Lubet, Modern Trial Advocacy. 9 This paper will
merely touch on several aspects.
(i)

Identify Potential Witnesses

Counsel should begin by preparing a checklist of the facts to support the essential ingredients of
the theory, the evidence and source of the evidence for each ingredient and where each witness
will fit into the development and enhancement of the theory. Once the factual elements necessary
to establish the theory of the case have been determined, counsel is in a position to decide which
witnesses should be called to establish the facts and develop the theory. Counsel must assess in
advance, the character of the witnesses and the nature of the evidence to be adduced. A number
of questions must be asked: How many witnesses will be called and what other evidence should
be adduced? Do any of them corroborate each other? Are any of them crucial? What weaknesses
do the witnesses have?
Counsel should never call a witness that can damage the case, unless the testimony is essential to
establish a critical fact that cannot be proven in any other manner. Similarly, a witness whose
credibility is likely to be impeached should not be called unless there is no other option and the
witnesss testimony is absolutely essential. The selection of witnesses is important so that the
atmosphere of the theory of the case and the theme is not lost for a moment throughout the trial.

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(ii) Preparation of Witnesses

Thorough preparation of the witnesses is essential so that their evidence will create the necessary
impression, belief and conviction to support the theory of the case. The manner of presentation of
the evidence will directly affect its probative value in the mind of the judge or jury. Witnesses
favourable to your case must be thoroughly and carefully prepared for testifying to those facts
that will support the theory of the case. Preparation involves reviewing those facts each witness
can provide and preparing the witnesses to testify to those facts in a convincing fashion.
Preparation of the witnesses should also include a discussion with the witnesses of the need for
forthrightness and honesty, attitude, courtesy, mannerisms, language used and dress code, among
other things.
(iii) Order of Witnesses

The theory and the theme of the case will influence the atmosphere counsel will wish to create in
the minds of the judge or jury. Counsel must know what impression he or she wants to create.
The theory, the theme and the atmosphere raise the question of what order the witnesses should
be called. The order in which the witnesses will be called to give their evidence and the
preparation of your witnesses may vary depending on the theory and the atmosphere counsel
wants to create. Should the party be called first? Should expert evidence be tendered first?
Chronology is an obvious, natural and common organizing technique for presenting the
evidence. However, this method may not be the most effective manner of developing the theory
or theme of the case. Counsels objective is to produce the maximum impact on the judge or jury,
and therefore the witnesses should be ordered to accomplish this objective. In deciding what
order will make the strongest impressions on the judge or jury, counsel should consider the
psychological principles of primacy and recency. Studies have suggested that judges and juries
tend to remember best the beginning and the end of the trial. Although, generally speaking,
presenting the case in chronological order or in some other logical progression is the
conventional story-telling technique which will be most familiar to judges and juries, starting
with a strong witness and finishing with a strong witness may be more effective and create the
maximum dramatic impact, particularly with a jury.
(iv) The Opening Statement

The opening statement is a critical stage in the trial. The opening statement is counsels first
opportunity to speak to the judge or the jury and although the opening statement to a judge
should take a different form than an opening statement to a jury, the opening statement to both
should present a coherent theory of the case and introduce the central theme. It was said by
Douglas K. Laidlaw, Q.C. that:
The objective of a good opening address is to seize the interest of the court and the jury and
instruct them as to the essentials of the case to be tried both as to the facts and as to the law. The
objective as well is to persuade the court and the jury as far as is possible of the righteousness
and validity of your cause and to put them in a receptive frame of mind to the evidence that is
about to follow. 10
Effective opening statements to a jury should contain an introduction to warm up the jury, an
impact statement that capsulizes the theory and theme of the case, the story of what happened, an
73

explanation of the legal claim or defence, and a conclusion that brings together the theory, the
theme, story and claim or defence for a just verdict.
An effective opening statement to a judge should outline the issues which the judge must decide,
and provide a framework of the evidence the judge is about to hear. The framework for the
evidence should incorporate both the theory of the case and the theme.
(v) Closing Argument

Closing argument must be more than just summation of the evidence. It must advance the theory
of the case by weaving together all of the various factual threads into one coherent and
persuasive story that will demonstrate the justness of your clients case and impel the judge or
jury to find in your clients favour.
Just as every case should have a theme, so also should every closing argument have a theme. The
theme should be present throughout the final argument. It gives order to the facts and infuses the
testimony with emotion, thus appealing to the judges or jurys sense of fair play and providing
an incentive for a finding in your clients favour. A persuasive theory of the case appeals to the
intellect and an effective theme appeals to the emotions.

Martin Sclisizzi. Reprinted with permission.

1. James W. McElhaney, The Picture Method of Trial Advocacy, 1992.
2. Steven Lubet, Modern Trial Advocacy, Canadian Edition, Sheila Block and Cynthia Tape
(NITA,1995), P. 8.
3. David B. Baum, Creating a Theme, Trial Association of Trial Lawyers of America, March,
1994
4. James W. McElhaney, The Picture Method of Trial Advocacy, 1992.
5. Scotia McLeod Inc. et al v. Peoples Jewellers Limited et al (1995), 26 O.R. (3d) (Ont. C.A.);
ADGA Systems International Ltd. v. Valcom Ltd. (1999), 43 O. R. (3d) 101 (Ont. C.A.).
6. Rule 47.
7. For a more detailed discussion see R. B White, The Art of Discovery (Toronto: Canada Law
Book, 1990) at 112 ff.
8. Edward J. lmwinkelried, The Development of Professional Judgment on Law School
Litigation Courses: The Concept of Trial Theory and Theme, (1986) Vanderbilt Law Review,
Vol. 39: 59, at 71.
9. Supra 2.
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10. Douglas K. Laidlaw, Q.C., Opening Addresses (1983), 4 The Advocates Quarterly 184.
B. Checklist: Developing the Theory of the Case

Checklist: Developing the Theory of the Case

1. Gather and investigate the facts. This starts at the first interview with the client. Crossexamine your client to ensure that there are no surprises later.
2. Identify the issues.
3. Identify the cause of action.
4. Consider the applicable case law.
5. Identify the evidence available on each issue.
6. Strategize how to get the necessary facts into evidence - who will prove the theory witnesses, experts
7. Consider contrary evidence anticipated from the other side.
8. Consider the remedy you are requesting and how it flows as a logical conclusion from the
theory.

C. Checklist: Testing the Theory of the Case

Checklist: Testing the Theory of the Case

1. Is it comprehensive? Does it address the strengths and weaknesses, consistencies and
inconsistencies, as well as each fact, document, physical evidence as well as principles of
physical, substantive, procedural and evidentiary law of the case?
2. Is there a theme? Does the theme justify the morality of your theory and appeal to the
justice of your case?
3. Is it consistent? Will it stand up under cross-examination? Is it resilient?
4. Is it plausible? It must make sense in the context of how the world operates and must be
credible.
5. Does it have legal structure? You must analyze and evaluate the legal authority and
identify legal issues so that you may assess and justify the relative merits of alternative or
competing legal positions.
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6. Does it have accountability? The theory must confront its weaknesses and admit its
deficiencies.
7. Is it congenial? Make the theory sympathetic and adopt the least disagreeable position.
8. Is it simple? The theory should be succinct and persuasive, clear and basic.
9. Does it reflect the moral values of the community? The theory should be viewed in the
context of the community in which the case is to be tried.
10. Is it flexible? The theory should be adaptable so that it can accommodate any evidence
or judicial decisions that may arise that would compromise a portion of it.
D. The Importance of Working Your Theory into Your Pleadings

The Importance of Working Your

Theory Into Your Pleadings

A.

Introduction

Since the amendments to the Judicature Act, approximately 125 years ago, when the rules and
forms related to pleadings were overhauled, there has been very little written about pleadings 1.
This may be because there is little to be said, or as is more likely, because practitioners see
pleadings as cause of action specific, where form triumphs over substance. Once the elements of
the cause of action are established and the general rules of pleading have been followed, most
practitioners believe that the drafting is at an end. The goal of this paper is to demonstrate that
there is much more to be said in a pleading. The pleading is one of the most important documents
that you will prepare. It should be more than a bare recitation of the relief claimed and the
material facts that ground the cause or causes of action. The pleading 2 should be viewed as a
persuasive document that captures and projects the essence of the dispute.
For the pleading is the one document that is used at every stage of the action and which will
repeatedly be referred to by the court. Initially, it defines the issues and establishes the factual
and legal foundation for the action. The facts and issues as pleaded govern production and
discovery. The pleading may be the only document available for interlocutory motions. For
instance, on refusals motions, the pleadings will determine the relevance of questions and
documents. Motions for summary judgment can succeed or fail based on the case as pleaded. If
the action proceeds to trial, the first exposure the trial judge will have is the pleading.
Originally, pleadings were oral. 3 The parties would literally state their case and the judge would
then delineate the issues to be determined. This procedure had its obvious drawbacks. In
Gullivers Travels, Jonathan Swift observed that one could not help but feel that the element of
surprise was the essence of the whole litigation process. The goal was ambush 4. The oral
tradition has been replaced by a written one, which has evolved into todays paper-heavy battles.
The importance of a pleading that clearly describes the theory of the case has never been more
important than it is today. The focus of our system is judicial management and efficiency.
Because of demands on the judiciary, the best way to ensure that the court understands and is
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sensitive to your case is to make your pleading clear and articulate, directed to a persuasive
theory.
The pleading is a marketing tool. The target is the court. The goal is to sell your theory. The
pleading must tell a simple and logical story, setting forth the theory that will persuade the court
to help your client. You know that you have succeeded when the court adopts your theory and
your language into its Reasons for Decision.

B. What Is The Theory?

Mauet, in Fundamentals of Trial Techniques, defined the theory of the case as:
A theory of the case is simply your position and approach, to all the undisputed and disputed
evidence, which will be presented at trial. You must integrate the undisputed facts with your
version of the disputed facts to create a cohesive, logical position at trial. That position must
remain consistent during each phase of the trial. At the conclusion of the trial your position must
be the more plausible explanation of what really happened to the jury. 5
Lube, in Modern Trial Advocacy, stated:
A theory of the case should be expressed in a single paragraph that combines an account of facts
and the law in such a way as to lead to the conclusion that your client must win. 6
However, developing your theory should not wait until trial. It must begin with the originating
document - the pleading. Your theory underscores the entire case. It, therefore, must be
developed at the beginning. In order to understand how to develop the theory into the pleading, it
is first necessary to understand what is the purpose of pleadings.

C. The Purpose of Pleadings

The primary purposes of the pleading may be stated as follows:
a. To define with clarity and precision the issues or questions of fact and law which are in dispute
between the parties and that are to be decided by the court;
b. To provide the opposite party fair and proper notice of the case that it has to meet;
c. To provide a permanent record of the issues and questions raised and to be decided in the action
so as to prevent future litigation upon issues already adjudicated upon between the parties or
those persons privy to them;
d. To limit the ambit and range of documentary discovery;
e. To limit the ambit and range of oral examination for discovery;
f.

To allow for the determination as to whether a reasonable cause of action or defence is disclosed;

g. To fix the burden of proof;

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h. To provide a measure for the court to compare the evidence adduced by a party with the case
which has been pleaded;
i.

To determine the range of admissible evidence which the party is entitled to adduce at the trial;
and,

j.

To advise of the relief being requested. 7

Not only must your pleading do all that, but it also provides the opportunity to integrate your
theory of the case. By setting out the facts and the legal basis for the relief claimed in a cohesive
manner, you can market the more plausible explanation of what really happened to the court.

D. How To develop The Theory Into Your Pleadings

Chances are you know very little, if anything, about the facts in dispute when you are first
retained. The temptation, for counsel and client, is to obtain the basic facts, draft a quick
pleading and issue it. This approach is cost effective. However, it is a sacrifice at the expense of a
complete understanding of the case and, most importantly, the development of your theory.
But how do you develop and work your theory into the pleading?
Before you even begin to draft your pleading, you must gather as much information as possible
from your client. In doing so, do not be afraid to cross-examine your own client. If there is an
important fact, either helpful or unhelpful, you want to know about it before you commit to a
theory in the pleading, rather than after. Once you have the information, take the time to
interview witnesses. Obtain witness statements if possible. There is no such thing as too much
information or too much confidence in the credibility of that information as the underlying
foundation for your pleading. You must answer the following questions: What happened? Why
did it happen? What approach explains your clients conduct? What approach explains the other
partys conduct? Why does that suggest your client should win?
A factual chronology of all events and documents must be prepared. Only by walking through
the facts, good and bad, in chronological order will you appreciate how the events transpired to
bring the client to your office. The chronology not only assists in developing the theory, it will
form the factual structure of the pleading. 8
The next step is to analyse the facts and identify available causes of action. Do your legal
research now. Do not issue a pleading without knowing the law. It is impossible to develop your
theory if you do not know the applicable law.
When analysing the facts, separate the undisputed good facts from the undisputed bad facts
and the disputed good facts from the disputed bad facts. Remember that it is essential that
the theory be consistent with all of the facts, good and bad. Acknowledging and working with the
bad facts from the outset will ensure that your theory remains credible and persuasive and
explains or puts those bad facts into context.
Where there are numerous disputed facts and issues, it may be helpful to prepare a Scott
Schedule. 9 Such a chart sets out the items in dispute and each partys position. This schedule
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can assist in analysing each partys position and may be useful at any attendance before the
court.
As part of this process, you must always have in mind your clients objective, articulate her
objective and canvass all possible available remedies or results.
In developing a theory, regard should be had to the following principles:
Comprehensive - The theory must be comprehensive so that it addresses both the strengths and
weaknesses, consistencies and inconsistencies as well as each fact, witness document, piece of
physical evidence and principles of substantive, procedural and evidentiary law of the case. 10
Theme - Lube says: Just as your theory must appeal to logic, your theme must appeal to moral
force. A logical theory tells the trier of fact the reason why your verdict must be entered. In other
words, your theme - best presented in a single sentence - justifies the morality of your theory and
appeals to the justice of the case. 11 The theme captures the most persuasive arguments and may
be expressed through statements, phrases or words that capture key images that may be
strategically repeated during the course of the trial. The theme is the cases mantra.
Consistency - Consistency requires that the partys theory be resilient enough to avoid the
microscope through which the evidence will be viewed.
Plausibility - The theory must pass the straight face test. It must remain plausible with the trier
of facts belief about how people act and how the world operates. It should address issues of
credibility. It should respect the emotional nature of human decision making to include feelings,
such as sympathy, rage and fear as well as a sense of fairness and justice. An implausible theory
offers explanations that are illogical and improbable or simply silly.
Legal Structure - It requires you to analyse and evaluate the legal authority and identify legal
issues so that you may assess and justify the relative merits of alternative or competing legal
positions.
Accountability - The theory must confront its weaknesses and admit its deficiencies. A sound
theory does not rest upon assertions not clearly provable nor contest those that are incontestable.
A reasonable theory admits its weaknesses and turns them into strengths. A successful theory
accounts for all facts and explains them in an accurate and honest way.
Congeniality - Congeniality suggests that you select the least disagreeable explanation available.
For example, a defence theory that suggests that a mistake was made as opposed to someone
acting negligently or foolishly would have a more sympathetic appeal.
Simplicity - A simple theory is One that may be presented as succinctly and persuasively as
possible, regardless of the volume or complexity of the evidence. Simplicity requires clarity in
both presentation and in an explanation of the law. It requires the use of simple language and
simple sentence structure. The case should be broken down into its basic elements so that any
complexity can easily be explained by an understanding of each of its parts.
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Community - The social setting in which the case is to be tried must be respected. Moral values
and public perceptions help shape a case for the fact finder and of course are even more
important in jury trials.
Flexibility - The theory usually results from painstaking attention to detail, meticulous
preparation and a thorough understanding of the facts and the legal issues. But trial practice has
taught that flexibility and adjustment are essential. A theory should be sufficiently adaptable to
accommodate an unfavourable evidentiary decision that compromises at least a portion of the
theory. A theory should not rely on misstatements, mis- characterizations, mis-representations or
misconduct.
After articulating your theory, a good next step is to prepare your closing argument for trial
before you begin drafting your pleadings. This process allows you to put together all your
analyses. You can choose the language to be used in the pleading that supports your theory.
Just before drafting the pleading, there is one last question you should ask: How much of your
theory should you reveal in the pleading? There is no easy answer. It may be that your client does
not have enough information at this time to formulate a coherent theory for the pleading. While
you may have a general idea of the nature of the claim, you cannot predict what documents,
evidence opposition the opposite party will take. The best course of action is to have a theory
that is broad enough to encompass potential positions of the defendant. That requires a careful
analysis of the various alternative possibilities. However, it is better to go through this while
drafting the pleading before much time and energy have been expended on a theory that will
never succeed.

E.

Drafting The Pleading

Before writing anything, prepare an outline using the following headings:

a. the relief claimed;
b. the parties;
c. the material facts;
d. why your client is entitled to the relief claimed; and,
e. remedies.

You can then develop your theory under each of these headings.
Example
We will use the following fact situation:
The plaintiff enters into a contract on August 1, 1999 with the defendant for the supply of 1000
widgets. The plaintiff manufactures computers. The defendant is the only supplier of widgets in
Canada. The widgets are essential components of the computer. The defendant was to deliver the
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widgets by December 1, 1999. The defendant did not deliver the widgets by December 1, 1999,
with the result that the plaintiff cannot deliver the new computers in time for January 1, 2000.
The defendant knows that the plaintiff needs the widgets by December 1, 1999 in order to
manufacture new computers that are Y2K compliant. The defendants know that the plaintiff
cannot obtain the widgets anywhere else. The plaintiff knows that the defendant may be merging
with another company that manufacturers the same computers as the plaintiff. The theory is that
the defendant purposefully failed to deliver the widgets by December 1, 1999, knowing that the
plaintiff could not deliver the computers by January 1, 2000 because it could not get the widgets
anywhere else.
1. Relief Claimed
In the relief claimed you could simply state:
The plaintiff claims:
a. $1,000,000.00 in damages
While this says that your client wants $1,000,000.00, it does not provide any other information.
More persuasive is this:
The plaintiff claims:
a. $1,000,000.00 in damages as a result of the defendants breach of an agreement dated August
1, 1999 to supply 1000 widgets to the plaintiff by December 1, 1999 (the Agreement) 12
Immediately the reader knows part of your theory; there has been a breach of an agreement by
the defendant to supply widgets. From that point on, the reader will know that the case is about a
breach of contract. The reader also knows that the date of December 1, 1999 is important.
2. Parties
An explanation describing the parties comes after the prayer for relief. No matter if there are two
parties or twelve, you want to describe the parties in a way that advances the theory of the case.
Frequently, we take the easy way out and simply define the parties as follows:
1. The plaintiff is a corporation incorporated pursuant to the laws of Ontario with its head office in
Toronto (the Purchaser).
2. The defendant is a corporation incorporated pursuant to the laws of Ontario with its head office in
Mississauga (the Vendor).

While this establishes who the parties are and that they are legal entities, it provides absolutely
no real information and does nothing to advance your theory.
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Instead, try this:

1. The plaintiff, a corporation incorporated pursuant to the laws of Ontario, manufactures computers
from its plant in Toronto (the Purchaser).
2. The defendant, a corporation incorporated pursuant to the laws of Ontario, is the only supplier of
the widgets that are used in the plaintiffs computers in Canada (the Vendor).

In this version, not only have you provided more information to the reader, but you have also
furthered your theory by establishing the connection between the plaintiff and the defendant, and
the plaintiffs reliance on the defendant for widgets. A caveat: these two paragraphs offend the
general rule of one thought per paragraph, however, it can be useful to develop the theory and
is permissible where you know the facts to be undisputed.
While our example only involves two parties, often the situation is more complicated. Part of the
development of your theory is an identification of who are necessary parties to the action. It is
important that all necessary parties be added. For instance, where a 50% shareholder brings
proceedings against his co-shareholder to wind up the corporation, both the co-shareholder and
the corporation are necessary parties.
However, there is a condition. Adding a party simply for atmosphere or embarrassment will not
be permitted. 13 Likewise, making allegations in the pleading against a non-party will also be
struck. 14
3. Material Facts
It is here that you can do the most to advance your theory in the pleading. A pleading must
inform as to the particular issues toward which proof must be directed. This requires that the
material facts be provided persuasively. Failure to do so will lead to either a pleading being
struck or particulars being ordered. 15
On the other hand, on a strict reading of Rule 25.06(l), the pleading shall contain a concise
statement of material facts on which the party relies for the claim or defence, but not the
evidence by which those facts are to be proved. The restriction on pleading evidence would
appear to limit the ability to market the theory.
However, this does not need to be the case. The first part of Rule 25.06(l) does refer to the
minimum requirement of a pleading, that is, a concise statement of material facts, but it does not
limit the ambit of material facts. In fact, the only limiting factor is that the evidence by which
those facts are to be proved is not to be pleaded. 16
The temptation to plead evidence to provide a persuasive context or create atmosphere is strong.
17
The difference between material facts and evidence is a paper unto itself. Master Sandler in
Copland v. Commodore Business Machines Limited, 18 an oft cited case, discusses the difficulty
in distinguishing between material facts and evidence and soundly suggests that regard be had to
texts such as Bullen & Leake and the rules of pleading in order to determine what elements must
be pleaded for a specific cause of action.
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The litmus test to determine between a material fact or evidence is do I need this fact to
support my cause of action either in terms of liability or damages? Any fact which a party must
prove at trial is relevant and therefore material, and ought to be pleaded even though it may
relate only to the quantum of damages or the type of relief claimed. 19 Material has been said
to be a fact necessary for the purpose of formulating a complete cause of action or a full defence..
20 21

Notwithstanding these limitations, there are techniques that can be used to develop your theory
without offending the Rules of Pleading set out in the Rules of Civil Procedure.
Organization
To ensure that the court quickly understands your theory, organize the material facts of the
pleading in a logical and coherent way. Most stories, especially where the reader is reading it for
the first time, are best told chronologically. A pleading that is disorganized and jumbled may still
contain all the elements required for the pleading, but it will not be persuasive.
For instance, in our example, it would be confusing to begin the recitation of material facts with
the fact that the defendant did not deliver the widgets and then jump to the fact that an agreement
was made between the plaintiff and the defendant.
Instead, start with the first fact: that is, that the plaintiff and the defendant entered into an
agreement on August 1, 1999.
Organization is key; the reader should not have to look for the theory. This is not a hide and seek
exercise. Nor should it be a return to trial by ambush and surprise. Remember, if you attempt to
make the theory so obscure or ambiguous so that your opponent will not catch on, chances are
the court will not catch on either.
Defined Terms
Defined terms are invaluable tools to market your theory. Defined terms avoid needless
repetition and therefore make the pleading easier to read. The Honourable Madam Justice Lang
recently commented on defined terms in Toronto-Dominion Bank v. Leigh Instruments Ltd. 22 and
again in Sun Life Assurance Co. of Canada v. 401700 Ontario Ltd. 23
In using defined terms it is important to be consistent; failure to do so will not only be confusing
but can also be a defect that can invite a motion to strike and require amendment. 24
In our example, you would not repeat the agreement entered into between the plaintiff and the
defendant on August 1, 1999". Instead, this collection of words should be defined as the
Agreement.
There is a caveat to the use of defined terms. One must be careful not to be too descriptive.
Inflammatory terms and language is liable to be struck thereby leaving holes in your pleading
and making it more difficult to understand. As well, defined terms that draw the very conclusion
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that is the domain of the trier of fact will be struck. For instance, informed purchases, 25
honest employees 26 and conspicuous 27 have been struck.
Catch Phrases
Catch phrases can be descriptive and help advance your clients theory. For instance, if your
clients facts suggest that there were several agreements, that taken together formed the basis for
a distribution relationship between it and the defendant, then define those agreements and that
relationship as the Overall Agreement. This term may then be repeated throughout the
pleading. When you use this term consistently, the trier of fact will hopefully identify with the
term and adopt the underlying premise. The repeated use of the term reinforces your theory that
the relationship is more than one single agreement and defines the nature of the relationship as
one of distribution. Spend time creating and developing descriptive catch phrases and terms that
are the foundation of your theory and that you will use throughout the litigation.
Headings
Headings are much more than simply an organizational tool. They are extremely useful in
developing a theory, especially in pleadings where the parties are numerous and the issues and
facts are complicated. Headings provide a road map for the reader. Headings are not formally
part of the pleading i.e. they do not need to be admitted or denied. Look at them as a bridging or
transitional question. Headings must guide the reader as to the purpose of the next section.
Headings should be descriptive and should highlight elements of the theory. A defined term, or
catch phrase can be used. Well-organized headings are similar to an index to a book, which when
read together give an outline of the claim. However, like defined terms or catch phrases,
headings cannot be unnecessarily conclusive or inflammatory. 28
Language
Language should be disciplined and concise. It is best to stay away from inflammatory language.
Be creative. Keep the language and sentence structure simple. There is nothing more frustrating
than having to re-read a sentence to understand what it means. If the theory is presented in
complicated language, it will be difficult to follow.
Avoid pronouns if it is not clear to whom you may be referring by such words as he or she or
it. Always allude to the same thing or person by the same name. If you maintain the same
phraseology throughout the pleading, then it will be easy to follow. Short blunt sentences drafted
in the positive; stay away from negative statements and double negatives. One should avoid ifs
and introductory phrases that take away from the material facts or limit them.
An Overview
There is nothing in the Rules that prevent an overview paragraph at the outset of the pleading.
Providing the context in which the material facts can be better understood is arguably a material

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fact. The overview can be used much like the headings, to capture the theory and language of the
dispute.
As set out in a recent article by the Honourable Mr. Justice Laskin, related to facta in the Court
of Appeal, 29 the beginning of a pleading could summarize the theory in a paragraph to explain
what the case is about and why your client should prevail. This can make it easier for the reader
to understand what follows as the reader will now have the context in order to understand why
and how the particular details in the pleading are important.
For instance, using our example, after the relief claimed and the description of the parties, you
may want to plead as follows:
4. The Vendor intentionally failed to deliver widgets to the Purchaser, knowing that the
Purchaser would not be able to fulfill its obligation to deliver computers to its customers by
January 1, 2000, and would suffer damages including loss of profit and good will.
OR
4. The Vendor failed to deliver widgets to the Purchaser in breach of the Agreement. The
Vendor knew that the widgets were essential to the Purchaser, in order for the Purchaser to fulfill
its obligations to deliver computers to its dealers by January 1, 2000. The Vendor knew there
were no other timely source of widgets available to the Purchaser. The Vendor knew that the
Purchaser would not be able to fulfill its obligations to deliver computers by January 1, 2000.
The Purchaser was not able to deliver the computers by January 1, 2000. The Purchaser has lost
profit and goodwill.
OR
4. In breach of the Agreement, the Vendor failed to deliver the widgets to the Purchaser. The
Vendor knew that the Purchaser would suffer losses when the Purchaser was not able to deliver
the computers by January 1, 2000.
Because these overviews are placed at the beginning of the pleading, the reader is not only
immediately confronted with the theory, but is also provided with the context of the action.
Especially in pleadings that are lengthy, an overview can make the theory more easily
understood and therefore, more persuasive.
Incorporation of Documents
A document that is referred to in a pleading, even if only in passing, will be deemed to be
incorporated by reference as part of the pleading. 30 For instance, in our breach of contract
example, the agreement between the plaintiff and defendant is part of the pleading subject to
production. Make sure that you are prepared to produce any document referred to. This rule
applies not only to agreements, but other items; for instance, widgets, videotapes and computer
disks.

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Charts and Tables

Some types of cases lend themselves to being presented with charts or tables. They can be placed
in the body of the pleading or in a schedule. For instance, where a minority shareholder is
claiming oppression, a chart setting out the date and amounts of cheques that the majority has
paid to itself is very persuasive.
The Use of Adjectives
The use of adjectives can be dangerous in a pleading. For example, in a wrongful dismissal
action where the plaintiff referred to numerous complaints, the court required particulars of all
of these numerous complaints so that the defendant can plead. It would have been safer for the
plaintiff to have pleaded that there were complaints, all the particulars of which are known to the
defendant, to avoid the requirement of particulars. 31
Restrictions on what Constitutes a Material Fact when Pleading
a. The Pleading of a Criminal Conviction
A criminal conviction against one of the parties may be pleaded in certain limited circumstances.
Even though it is considered an admission, and in general admissions are not to be pleaded, as
they are evidence, the conviction can be pleaded as one of the surrounding circumstances, such
as in determining an issue of negligence or nuisance. 32
b. Motive
A defendant is not permitted to plead a plaintiffs motive for bringing an action. 33
c. Settlement Discussions
Unless you are bringing an action to enforce a settlement, and the settlement discussions
themselves are part of the claim, it is not proper to plead settlement discussions.34
d. Reference to Insurance
Reference to the fact that a party may have insurance to cover any claim may be struck. 35

4. Why your Clients are Entitled to the Relief Claimed

After persuasively setting out the material facts related to a cause of action, the next task is to
plead the cause of action itself, i.e., in our breach of contract example to establish that there has
been a breach of contract entitling the plaintiff to damages.
In doing so, there is a prohibition on pleading law. However, references to statutes must be
pleaded. It is important not to overlook the pleading of statutory provisions, for it may preclude
you from advancing an argument at trial.
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The theory of your case may be based on alternative possible factual outcomes. When alternative
claims are alleged, the facts relating to each such claim should be stated separately to show
which facts belong to which alternative head of relief claimed. For example, when pleading
fraudulent misrepresentation or in the alternative negligent misrepresentation, the way you plead
it may very well depend on the theory of case.
For example if the facts and the documents indicate that the defendant was reckless in making
the misrepresentation not caring whether it was true or false or indicate that, at the very least, the
defendant was negligent (although the defendants conduct may not have reached the level of
recklessness) then the theory of your case would be based on recklessness or in the alternative
negligent misrepresentation.
These inconsistent pleas are easily dealt with by one theory of the case, the defendant was
reckless, not caring whether the statements made were true or false or at the very least was not
careful in the making of the representation (negligent).
However, if the theory of the fraud case is that it was an intentional misrepresentation, then that
is clearly inconsistent with a negligent misrepresentation. Proving intent requires a sound factual
base, based on some uncontroverted facts that reasonably suggest intentional misrepresentation.
That theory will obviously be totally inconsistent with negligent misrepresentation. However,
although these are two inconsistent theories, the rules of pleading allow you to plead inconsistent
allegations as long as you make it clear that they are being pleaded in the alternative. 36 However
the theory of your case within those circumstances is based on two separate distinct and
inconsistent theories.

5. Remedy
The last part of your pleading will address remedy. The remedy requested should be supported
by the material facts you have already pleaded, and be consistent with your theory.
For instance, in our example, it would not be consistent with our theory if at the end of the
pleading we asked for delivery of the widgets.
If requesting punitive damages, you may consider what additional facts should be pleaded. This
can provide substantial latitude in pleading. 37 For instance, a partys financial means is generally
not relevant. However, when punitive damages are claimed, it may be appropriate to plead
means. 38
At the time of pleading you may not know all of the particulars of the damages suffered. It is for
this reason that you will often see all the particulars of which will be provided prior to trial at
the end of the pleading. While this is sufficient, if the action proceeds to trial, seriously consider
amending your pleading to provide those particulars so that the trial judge knows exactly what
your case is before the trial begins.
If this is a defence for our example, consider the last paragraph of the defence reading:

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The defendant requests that this action be dismissed with costs, as the defendant states that it
honoured all of its obligations to the plaintiff under the Agreement.

F. Amending Your Pleading

The theory must go through a continual re-testing or re-analysis. If a fact learned from a
document or evidence at discovery does not fit with the theory as pleaded, analyse this new fact
and consider amending your pleading. A good time to re-evaluate your pleading is after
discovery, but before the pre-trial. By that time, all the facts should be known, and you can
decide whether the theory as pleaded is still consistent. If not, amend your pleading.
You can also amend to take into account matters that arise after the commencement of the action.
Rule 14.01(4) provides:
A party may rely on a fact that occurs after the commencement of a proceeding, even though the
fact gives rise to a new claim or defence and if necessary may move to amend the originating
process or pleading to allege the facts.

G. Conclusion
In the result, you should see the pleading as your first tool by which to market your theory. Take
the time to do the pleading properly; choose language with care, make it flexible enough to
withstand the inconsistencies in the facts that are sure to arise as the action progresses. Always
keep your theory in focus, adapting, re-evaluating and rewording when necessary.

Melvyn L. Solomon, Mark L. Goodman, Nancy J. Tourgis, Deborah A. Drukarsh of Solmon,

Rothbart, Goodman. Reprinted with permission.

Sources Cited

735619 Ontario Ltd. v. Stone et al. (1989), 36 C.P.C. (2d) 313 (S.C.)

Adams-Smith v. Christian Horizons (1997), 14 C. P.C (4th) 78

The Advocates Quarterly, Vol. 3, 1999

Bullen and Leake, Precedents of Pleadings, 12th ed. (London: Sweet and Maxwell, 1975)

Copland v. Commodore Business Machines Ltd. (1985) 52 O.R.(2d) 586 (S.C.), affirmed on
appeal, September 24, 1985 by the Honourable Mr. Justice Henry

Corfax Benefit Systems Ltd. v. Fiducie Desjardins Inc. (1997), 37 O. R. (3d) 50

J.E.Cote, Some Notes on Pleadings (1974), 12 Alta. L.R. 535

88

Elder v. Kingston (City) (1953), O.W.N. 409 (S.C.)

Everdale Place v. Rimmer (1975), 8 O. R. 641 (H.C.J.)

General Security Insurance Co. v. Vasilaros (1984), 46 C.P.C. 247 (S.C.)

Holdsworth, History of English Law, Vol. III, 5th ed., Vol. IX, 3rd ed., Vol. XI.

Hutchinson v. York Sanitation Co. Ltd. (1986), 56 O.R. (2d) 778 (S.C.C.)

Hydro-Electric Power Commission of Ontario v. City of St. Catherines et al. (1971), 3 0. R. 674

S. Lubet, Modern Trial Advocacy, Cdn. eds. S.Block and C.Tape (National Institute for Trial
Advocacy Inc., 1985)

T. Mauet et al., Fundamentals of Trial Techniques (Toronto: Little, Brown and Company
(Canada) Ltd., 1995)

Montreal Trust Co. of Canada v. Toronto-Dominion Bank (1992) 40 C.P.C. (3d)389

Morgan v. Tumosa (1963) 1 O.R. 550 (H.C.J.)

Mueller Canada Inc. v. State Contractors Inc. (1989) 35 C.P.C. (2d) 175 affirmed (1989) 71 O.R.
(2d) 397

1. For selection of articles found, see bibliography.

2. Although a notice of application and affidavit are not pleadings in the true definition, they are the
first documents read by the court and also define the issues. Affidavits properly drawn should
avoid adjectives and over-statement. Affidavits can set out a logical story with persuasive
thoughts and language, but the theory, in general, of the case cannot be put in the affidavit.
3. See Bullen and Leake, Precedents of Pleadings, 12th ed. (London: Sweet and Maxwell, 1975) at
10. For the history of the development of the common law system of pleadings, see Holdsworth,
History of English Law, Vol.III, 5th edition, page 627 etc. Vol. IX, 3rd ed., at 336, and for the
history of the development of the system of equity pleadings, see Ibid, Vol. XI, at 376. In about
the beginning of the 16th century the system of oral pleading began to be superceded by a system
of written pleadings which were entered on the record when they were completed. The Judicature
Acts of 1873-1875 and the Rules of Court that were passed pursuant to those statutes. The old
system of pleading was replaced by the modern system of pleading.
4. For an example of how our system has moved from surprise to ensuring that our clients case is
fully pleaded, see Hydro-Electric Power Commission of Ontario v. City of St. Catherines et al.
(1971), 3 O.R. 674. See also R. v. Stinchcombe (1991), 3 S.C.R. 326.

89

5. T. Mauet et al., Fundamentals of Trial Techniques (Toronto: Little, Brown and Company, Canada)
Ltd., (1995) at 349.
6. S. Lubet, Modern Trial Advocacy, Cdn. eds. S.Block and C.Tape (National Institute for Trial
Advocacy Inc., 1985) at 8. Lubet goes on to say that the theory must be logical, speak to the legal
elements of your case, be simple, using maximum use of the undisputed facts and be easy to
believe.
7. Supra note 3 at 17.
8. The preparation of a detailed chronology will never be a waste of time. It is a valuable tool for
discovery and trial.
9. Supra note 3 at 19.
10. It is in this context that the good fact, the bad fact analysis directs the comprehensiveness of the
theory.
11. Lubet, supra note 6 at 8.
12. The use of defined terms will be discussed in more detail below.
13. National Trust Company v. Furbacher (1995) O.J. No. 3566.
14. General Security Insurance Co. v. Vasilaros (1984), 46 C.P.C. 247 (S.C.).
15. Steiner v. Lindzon (1976) 14 O.R. (2d) 122 (H.C.J.).
16. Rule 25.06(l).
17. Facts that are pleaded simply for atmosphere will be struck. Wilson v. Wilson (1948) O.W.N. 326
(H.C.J.).
18. Copland v. Commodore Business Machines Ltd. (1985) 52 O.R. (2d) 586 (S.C.), affirmed on
appeal, September 24, 1985 by the Honourable Mr. Justice Henry.
19. Bullen and Leake, Supra note 3 at 35.
20. Ibid. at 35.
21. While one should be cautious, in practice it is not often that a motion to strike evidence from a
pleading is brought.
22. (1990), O.J. No. 2490.
23. Sun Life Assurance Co. of Canada v. 401700 Ontario Ltd. (1991) 3 O. R. (3d) 684.
24. National Trust v. Furbacher, supra note 9.
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25. Sun Life, supra note 23.

26. Ibid.
27. Ibid.
28. Ibid.
29. Advocates Quarterly, Vol. 3, 1999.
30. Corfax Benefit Systems Ltd. v. Fiducie Desjardins Inc. (1997), 37 O.R. (3d) 50; Montreal Trust
Co. of Canada v. Toronto-Dominion Bank (1992), 40 C.P.C. (3d) 389.
31. Adams-Smith v. Christian Horizons (1997), 14 C.P.C (4th) 78 at 82.
32. See Hutchinson v. York Sanitation Co. Ltd. (1986), 56 O.R. (2d) 778 (S.C.C.) and cases referred
to therein; Everdale Place v. Rimmer (1975), 8 O. R. 641 (H.C.J.); Morgan v. Tumosa (1963), 1
O.R. 550 (H.G.J.).
33. Welch Anderson & Co. v. Roberts (1946), O.W.N. 5 (H.C.J.).
34. Sun Life Trust Co. v. Dewshi (1993), 17 C.P.C. (3d) 217. For pleading settlement discussions as
part of the claim see Mueller Canada Inc. v. State Contractors Inc. (1989), 35 C.P.C. (2d) 175
affirmed (1989), 71 O.R. (2d) 397.
35. Elder v. Kingston (City) (1953), O.W.N. 409 (S.C.).
36. Rule 25.06
37. Whiten v. Pilot Insurance Co. (1999), 42 O.R. (3d) 341 (O.C.A.)
38. 735619 Ontario Ltd. v. Stone et al (1989), 36 C.P.C. (2d) 313 (S.C.).

91

E. Theory of the Case and Its Use in Examination for Discovery

Theory of the Case and its Use

in Examination for Discovery
Theory of the Case
Preparation for trial begins early and is not left to the eve of trial. The reason for this is because
one must formulate a theory of the case. The theory of the case will dictate the drafting of the
pleadings, the questions that are put during oral examination for discovery and the conduct of the
trial. You do not wait for the trial to provide you with your theory. In essence, the lawyer should
be prepared to paint a picture that is plausible and to suggest to the audience some obvious and
necessary conclusion - what the client wants. As an advocate, your job is to present the most
persuasive story by appealing to ones sense of logic, plausibility and simplicity. In this regard,
your theory of the case must be understandable and in accordance with common sense.1

What is the Theory of the Case?

The theory of the case consists of the facts on which the right of action is claimed to exist or the
basis of liability for grounds of defence. It is to be distinguished from the theory of the law
which is the legal premise or set of legal principles on which a case rests.2
The theory of the case is essentially your game plan. It is the basic, underlying idea that
explains not only the legal theory and factual background, but also ties as much of the evidence
as possible into a coherent and credible story. The theory of the case is what the advocate creates
out of the legal theories and the facts. It is the basic concept around which everything else
revolves.3
The best theories of the case are often the most simple. In addition, a simple theory is one where
a fact is most likely to be accepted as probable where it appeals to common sense, reason, and
basic community standards.4
In developing the theory of the case, you should also be aware that your theory or theme should
attract the attention of the trier of fact. In other words, one of the purposes of developing a theory
or theme is to persuade the trier of facts as to the reasonableness of your clients position. Even if
the case does not proceed to trial, developing a theory of the case will assist in persuading the
opposition that your case has merit to facilitate the resolution of the claim by way of settlement.

How is the Theory of the Case Different From Issue Identification or the
Theory of Law?
Issue identification or the theory of law involves identifying the legal issues and the underlying
components or parts of the cause of action that requires proof. An experienced lawyer who
knows the law governing a cause of action can, by route, break it down into its component parts
and then use these parts for an outline for discovery. The theory of the case involves an analysis
of the underlying facts that give rise to the legal cause of action including the underlying motives
or objectives of the party and/or the cause of the events, or basis of the defence.
Given that discovery is limited to those issues raised in the pleadings, it is essential that the legal
theory be formulated early on in the case. However, given that new facts and evidence are
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discovered during the course of any case, your theory must not be cast in stone and must be
flexible. You must be prepared to discard the theory if the facts as they emerge do not support the
theory; however, having a working theory is important for several reasons. It allows you to
identify the critical, factual and legal issues in the case and focuses your energies on the vital
facts to be proven. If you are acting for a plaintiff, identifying the theory will lead to the selection
of the appropriate cause of action. If acting for the defence, the theory will establish the legal and
factual basis for your defence. The theory of the case also helps you determine what areas of the
case and/or facts need to be further developed.5
In developing the theory of your case, you must take into consideration all of the facts in the case
including those favourable and detrimental to your clients position. Your task is to have the trier
of fact accept your characterization of the case and your theory of the case as the correct one.
Your theory of the case is your position and approach to all of the undisputed and disputed facts
that will be presented at trial. All of these factors should be integrated to present a cohesive and
logical position at trial. You must develop a theory of the case before trial and act in accordance
with it throughout all stages of the case including discovery.

Selecting a Central Theme

Developing a theory of the case involves four parts:
i.

garnering the facts;

ii.

finding the applicable law;

iii.

considering how to get the necessary facts into evidence; and

iv.

assessing the opponents theory of the case.6

Each of these components is intertwined. New facts give rise to new questions of law. In
addition, the law or the components of the cause of action provide assistance in determining
which facts are relevant and which facts are not.
In establishing the theory of the case, you will have to consider the facts and the plausibility of
your clients theory. For example, there are certain objective facts such as the case where your
client has signed a contract, where a denial of the signing will be futile and will reduce the
credibility with the trier of fact and with the opposing party. A more plausible theory would be to
raise the issue of undue influence, duress or misrepresentation rather than denying the clients
presence when the contract was signed.
The following examples, taken from Geoffery Adairs book entitled On Trial: Advocacy Skills
Law and Practice7 provide a brief illustration of the theory or theme used to persuade the trier
of fact as to the reasonableness and rightness of a partys position. In a personal injury case, the
plaintiff was allegedly suffering from chronic pain syndrome and the defence was simply that the
plaintiff was unworthy of belief. The central theme chosen was obviously that her word could
not be trusted.8 On the other hand, is the case of an 83 year old female plaintiff who stepped off
the sidewalk onto a roadway as a tractor trailer unit was in the act of actually passing in front of
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her and she consequently suffered a severe injury to her foot when the rear trailer wheels ran
over it. On any review of the evidence, there was no liability or fault on the part of the truck
driver, but there was overwhelming sympathy for the elderly seriously injured plaintiff. The
theme of the defence was that the case must be determined or decided based upon the evidence
and not based on any sympathy for the plaintiff.9
You must consider how various theories will impact on one another. There is a danger that some
theories will conflict with one another, undermining your credibility with the trier of fact and the
opposition. In other words, having one theory of the case is the most consistent and most
understandable way of presenting a case to a trier of fact. The danger is that if you are wrong
there is no alternative available for the trier of fact to find in your favour. Alternatively, by using
the shot-gun approach where the trier of fact is provided with a number of options in the hope
that one of them will be accepted, you run the risk of losing credibility with the trier of fact and
the risk of losing the benefit of having a focussed theory of the case to persuade the trier of fact
to reach the conclusion that the client wants. In other words, you cant suck and blow at the same
time.10
Some examples of inconsistent theories are as follows. In the case of Leary v. R. (1977), 37
C.R.N.S. 60 (S.C.C.) the accused was charged with rape. His defence was consent and he gave a
statement to the police describing an act of consensual intercourse. It was argued on appeal that
the defences drunkenness ought to have been put before the jury. Mr. Justice Pigeon commented
that:
...an accused cannot very well at the same time ask the jury to believe his statement that the
complainant did consent if, at the same time, he says he was so drunk as not to know what he
was doing.11
Theories of the case, as set out in pleadings, often conflict. One example of a response to a
plaintiff who claims his cabbages were eaten by the defendants goat is:
you had no cabbages.
if you did, they were not eaten.
if they were eaten, it was not by a goat.
if a goat ate them, it was not my goat.
and if it was my goat, he was insane.12
The problem is either to articulate the ideas or themes so that they do not detract from each other,
or to abandon those themes that are not seriously arguable. J. McElhaney aptly put it, in his
article called Theory of the Case:
The signal you send when you refuse to put very many eggs in any one basket is that you do not
trust the basket.
Surely, the point in constructing a theory of the case is to get a basket big enough and strong
enough to carry all the eggs you need.13

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One powerful example of the use of a simple theory of the case was in the case where Exxon
successfully sued Lloyds of London to obtain insurance reimbursement for the $2.5 billion
cleanup costs after the 1989 Exxon Valdez oil spill in Alaskas Prince William Sound. Despite
the fact that it was an American corporation against a foreign insurance company, Exxon was
worried because everyone was angry at Exxon for what turned out to be an unprecedented
environmental disaster. Lloyds raised a number of defences including the claim that Exxons
conduct was so irresponsible that the spill was not a fortuity which translated into the theme
that Exxon virtually spilled the oil on purpose -- so that it was not entitled to insurance coverage.
On an emotional level the argument was dont pay these people a dime. Theyre Exxon, and
they should have to pay for what they did themselves - not us.
Given the circumstances, the expectation was that Exxons lawyers would defend both Exxon
and Captain Joseph Hazelwood (who had been intoxicated in his cabin at the time of the spill) as
best they could and based upon the legal elements of the cause of action. However, that is not
what they did. They believed that trying to defend Hazelwood and attempting to make Exxon
look like a corporate saint would be a disaster. Nobody would believe it, and Exxon would be
punished for a dishonest defence even though Hazelwood had given his crew the proper
instructions and Exxon had spent $2.5 billion cleaning up the spill. Instead, counsel for Exxon
admitted Exxons (and Hazelwoods) responsibility in terms Exxon could agree to. In addressing
the Jury, counsel for Exxon acknowledged that: The buck stops here. We are responsible for this
spill. Captain Hazelwood was responsible he was the Captain of the Valdez, and it was his crew
that didnt make the turn. He worked for Exxon Shipping, and it was their boat that ran aground.
We own Exxon Shipping, so we are responsible for what they did. And it was Exxons oil that
spilled. The whole mess is our responsibility, and the buck stops here which is why we need
insurance.14 It was based on this premise that Exxon was successful in its suit against Lloyds.
For consistency, Exxons theory of the case at trial had to carry through from the theory set out
by its witnesses during Exxons examination for discovery. Failure to be consistent with
something as fundamental as the basic theory of ones case can lead to a loss of credibility for a
partys entire position and fundamentally destroy any chance of success.
Because discovery is one of the most important building blocks leading up to the trial of a case,
it is essential that the theory of the case be developed from the beginning so that a consistent
approach can be taken from the pleadings stage through to discovery and eventually trial. This is
not to say that the theory of the case is a static thing. Rather, it is an evolving tool which, when
effectively used, should assist you in persuading the trier of fact that your clients version of the
events is the only version that makes sense.
To the extent possible, your theory of the case should remain consistent during each phase of the
case and should be internally consistent and corroborative with the evidence. For instance,
attacks made on the opponents version of disputed facts should be consistent with your theory of
the case. Your approach to each phase of the trial, including the discovery process, is dependent
upon and based upon the theory of the case you have developed.15

How does your Client fit into your Theory?

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Preparation for trial begins during the initial meeting with the client. You should secure the
relevant details from your client as soon as possible, examining both the strengths and
weaknesses of your case. Your client should be involved in the preparation of the case including
providing an explanation as to the opponents case and what he or she anticipates the opponents
theory will be. This inquiry may provide you with new facts and arguments that you did not
anticipate.16
The client can help you determine what the weaknesses in your case are and assess and identify
the disputed facts that the theory of the case must take into account. The client can also help to
determine the other sides theory, which will in turn develop lines of attack that can be used at
trial. In addition, you should ask the question: to what extent does your clients experience and
role in the dispute feed into the theory of the case? If the issue at hand is a contract dispute, is
your client sophisticated or unsophisticated? If your client is intelligent but lacks experience in
business matters and was in fact duped into executing a contract, you can build upon this fact and
tie it into the theory of your case.

How do you incorporate the theory of the case into an examination for
discovery?
The right to discover the opposing party is one of the most important and powerful tools in a
litigation lawyers toolbox. Its main purpose is to obtain disclosure about your opponents case
and to obtain admissions that are helpful to your case. One of the secondary purposes of
discovery is to determine your adversarys theory of the case. While all steps are important in the
building of the case, the most important single contribution to the success of the litigation is the
examination for discovery.
The questions that are put to your client at discovery may help to eliminate your opponents
theory of the case and can also reveal how your opponent intends to prove their theory at trial.17
The question is how does one pursue this objective.
The main principle of discovery preparation is to determine what the objective is. One should
choose a goal before undertaking an activity. It is essential in developing one theory, to keep in
mind the purposes of discovery.
Essentially, the purposes of discovery are as follows:
a. To enable the examining party to know the case he or she has to meet;
b. To eliminate surprise at trial;
c. To secure favourable evidence - to procure admissions to enable one to dispense with formal
proof or to procure admissions which may destroy your opponents case;
d. To eliminate or narrow the issues;
e. To commit the opposing party to his or her story;
f.

To set up your cross-examination at trial;

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g. To learn the names and addresses of witnesses;

h. To determine your opponents theory of the case;
i.

To obtain disclosure of expert evidence;

j.

To evaluate your case and uncover its weaknesses;

k. To learn about documents and real evidence;

l.

To assess the opposing partys strength as a witness;

m. To identify the need for further investigation;

n. To ensure that the proper parties have been sued; and
o. To facilitate settlement.18

As set out above, learning the other sides case is the fundamental purpose of discovery.
Examination for discovery is one of the means by which ambush at trial is avoided. Keeping
this in mind, there are two aspects of the opponents case upon which the examiner should
consider in preparing discovery. The first is how the opposing party is going to prove its case.
The second is what the opposing partys position is about the examiners case. A useful example
is a situation where the Statement of Claim alleges that the defendant contracted to paint the
plaintiffs warehouse in a good and professional fashion and failed to do so. As a result, the
plaintiff alleges that the paint peeled off metal fixtures and the job had to be redone by another
company at considerable expense. The first task of the examiner at discovery is to find out all of
the facts pertaining to each of the things that the Plaintiff would have to prove, such as:
a. a complete description of the contract and its terms;
b. that the painting was done;
c. the specifics of the alleged peeling (its nature, time and extent); and
d. the particulars and proof of the damages claimed.

Obtaining this information will provide the examining party with the facts that the opposing
party will be relying upon to establish their case at trial. However, if the examining party has its
own theory as to the cause of the problem, that is, that the paint peeled as a result of overheating
of the fixtures caused by some accidental rupture of a steam line, the question is should there be
some discovery on this issue as well. There are some counsel that believe that this issue ought
not to be examined upon as it would disclose to the other side the nature of the defence and
theory of the defendants case. However, the nature of the defence will have to be set out in the
pleadings. In addition, even where the Statement of Defence was silent or not clear on this point,
it is an issue that should be examined. First, one should never underestimate the opposition and
secondly, the results of the discovery could influence settlement discussions. It is better to obtain
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the information on discovery rather than to count on an advantage through surprise at trial for
two reasons. Firstly, to the extent possible, disputes should be settled before trial. Second, by not
asking questions about these issues, you may be at a disadvantage at trial when questions are
asked concerning these issues without having the benefit of the plaintiffs position on this point.19
In other words, the purpose of discovery is to obtain an understanding of the opponents case and
to learn what the opponent is going to say about all matters in issue including the plaintiffs
theory of the case. All of these objectives are based upon the issues set out in the pleadings and
should not arise out of speculative issues that have not been pleaded.

Preparation for Discovery

Step One - Identify the Legal Theories
Finding the basic legal theory and foundation of the case means answering the question: Is this
case based on breach of contract, fraud, negligence, defamation, breach of fiduciary duty etc.?
The basic legal theory of the defence may be the negative or denial of some basic component of
the plaintiffs case or may require affirmative proof such as the position that the plaintiff waived
performance of the strict terms of the contract or that the plaintiff should be stopped from
claiming damages. Therefore, the first thing for counsel to do is review the pleadings and
identify the legal theories of the case and defence.
The next step is to break down the cause of action into its parts, which is required for the purpose
of formulating questions. At this point, you may need to conduct research in order to reduce the
causes of action pleaded into their most basic elements to prepare an outline for discovery.

Step Two - Identifying the Underlying Facts and Evidence

Review the documents produced by both parties. A review of the adverse partys documentary
evidence should be conducted at the earliest possible opportunity and always prior to any form of
oral discovery. The witness who is going to be subject to the oral examination should also be
familiar with the documents. Use the documents to determine what questions to ask but do not be
governed by the documents. In some instances, the document is a primary or important fact such
as the existence of a contract, a promissory note, or a guarantee. In other cases, the documents
are evidence of the facts in issue and should be used as the basis upon which to ask further
questions. It is not surprising, however, that in most civil actions or disputes, documents are a
very important part of the discovery process. Often, it is only through the use of documents that
you can tie down a witness to a particular fact.
You should also speak at length with your own client regarding the facts of the case and, in
addition, should consider interviewing key witnesses. Information obtained from key witnesses
can be useful for developing a line of questioning that might not otherwise be anticipated.
Set out a list of topics or subjects, based upon an analysis of the causes of action, the theories of
the various parties, and the issues disclosed by the documents, the facts elicited from your client
and any key witnesses.

Step Three - Identifying the Theory - Examples

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It is difficult to talk about using the theory of the case without referring to some examples. For
instance, you may be acting for a plaintiff in a situation where it has entered into negotiations
with the defendant to provide the defendant with the concepts and business plan for a retail store
in exchange for a fee and stream of royalties. During the negotiations the defendant executes a
confidentiality agreement with the plaintiff. After the negotiations break down, the defendant
opens a new retail concept using the identical ideas and concepts disclosed to the defendant by
the plaintiff. In the claim brought against the defendant for breach of the terms of the
confidentiality agreement and misuse of confidential information, you take the position that the
defendant stole the plaintiffs ideas and confidential information and that the defendant intended
to terminate the negotiations from the beginning, only after it had obtained enough of the
confidential information to go ahead with its plans to open the new retail concept. It may be
difficult, however, to take this position in a case where the confidential information becomes a
public concept utilized in the retail sector. However, you may discover, upon interviewing
witnesses, that your theory is correct, being that the guilty party, namely, the thief of the
confidential information, provided instructions to its agents and employees to obtain as much
information from the unsuspecting plaintiff before terminating the relationship. In this case, you
can go into your discovery with some confidence of your position. In this regard, consistent with
the theory, you should attempt to establish that the opposing party obtained a lot of information,
which was not available in the public sector, from your client before terminating the relationship
and in doing so, should corroborate this evidence with documentary proof from your clients
productions and/or the opposing partys productions.
Another example of a theme is where you have two contracting parties consisting of an
unsophisticated or an inexperienced negotiator and a sharp negotiator. If you are acting for the
inexperienced negotiator you may wish to emphasize the David versus Goliath theme. This
theme, however, may be less successful and less credible in situations where both parties were
represented by counsel during the contract negotiations, which are now the subject matter of
dispute. Even if you can prove coercion or misrepresentation which induced one party to enter
into a contract or to agree to certain terms, it will be difficult for you to seek a remedy of setting
aside the contract executed by the parties where your client obtained legal advice prior to
entering into what is now complained to be an unfair contract or a contract whose terms were
agreed to based upon misrepresentation. It will be particularly difficult to take this position in the
situation where the party who is seeking to set aside the contract, does little or nothing about the
situation following the discovery of the undisclosed facts which are alleged to be the basis for the
misrepresentation claim. In other words, you must consider all of the facts, in developing a
theme or theory that appeals to basic common sense.
Sometimes, it may be an advantage to take the approach of throwing mud at the wall to see what
sticks. In other words, in a case where your clients position is not strong, not credible, or does
not appeal to common sense, you may wish to consider raising a number of issues in an attempt
to confuse the trier of fact regarding the true state of affairs. The problem with this approach is to
take care that in raising a number of issues, that the issues being raised are compatible and not
inconsistent with each other. This tactic may be applicable to situations where the event speaks
for itself - like the case where an apartment building is sinking into the ground and the plaintiff
retained expert engineers, architects and general contractors to construct the building. In this
situation, it is almost certain that some liability must be attributed to the defendants hired by the
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plaintiff to do the work. In these cases, it may be difficult, however, to determine from the facts
of the case, which of the numerous defendants contributed to the problem and to what degree.
If you are acting for one of the defendants in this kind of case, your theory or tactic may be to
attack your co-defendant so as to extend or spread the responsibility for the plaintiffs loss
among as many parties as possible. Alternatively, your client may be able to raise doubt in
circumstances where they can establish that they could not have contributed to the cause of the
damage because certain events took place after they were on the job and that they cannot be held
responsible for this reason. However, in order to be able to take this approach, the documentary
and other evidence must corroborate your clients position that while they were on the site,
inspections were conducted on a regular basis confirming that the work was completed properly
and that issues were not raised regarding their own work. If, however, the documents are
inconsistent with this position, then you need to re-examine your theory of the case.
In other cases, documents may not come into play at all. These kinds of cases are rare. However,
one example could be a case of slander where the plaintiff alleges that the defendant made
slanderous statements and defamatory remarks causing damages to the plaintiffs reputation. In
this case, when acting for the defendant, any theory will have to attack the credibility of the
plaintiffs position. Therefore, an underlying motive for the accusation must be discovered in
order for the defendants attack upon the credibility of the plaintiff to be believed. In discovering
the underlying motive, information regarding the history of the parties should be obtained and
interviews of witnesses should be conducted which might lead to useful inquiries that you might
not have anticipated.
Relationships between parties are another important factor that must be considered and taken
into account in formulating a theory of the case. For example, in disputes such as oppression
cases involving closely-held family businesses, there are almost always underlying issues
between family members which give rise to the claim that one party has acted oppressively
toward the others. The underlying motives should be considered in formulating your clients
theory of the case.
The chronology of events should always be taken into consideration when formulating a theory
of the case. Often, the chronology of the events is instrumental in assisting and developing the
appropriate theme. For example, an aggrieved party may complain that the offending party
misled them into changing their position or accepting certain terms in a contract that were not in
their best interests. However, if the complaining partys conduct is inconsistent with this
position, an examination of the actions taken in order of sequence of events can be instrumental
in demonstrating your clients theory of the case that they should be stopped from complaining
about the terms of a contract that they knowingly entered into.
Because the evidence obtained on the examination for discovery provides you with the essential
building blocks of any trial, it is important that the discovery take into account the theory of the
case, both from the perspective of conducting the examination for discovery of the opposing
party and preparing your own client for their examination for discovery. If your own client does
not understand the theory of the case, then they may answer questions in a manner inconsistent
with the theory being proposed. A set of facts, without an explanation for the particular actions
100

taken by your client may lead to several inferences which are not consistent with your clients
theory of the case. It is therefore imperative, when preparing your client for discovery that the
theory of the case be reviewed in addition to the documentation, the pleadings and the facts.

To what extent do you telegraph your theory to the opposing party?

There are many advocates who argue that one should not telegraph your theory of the case, and
that some useful tactical advantage is gained by the element of surprise at the trial. This is less
and less the case given the wide scope of discovery that is permitted in Ontario and given the
objectives of the discovery process. If your objective is to persuade the other side as to the
strength of your case, then nothing is gained by shielding or hiding from public view the theory
of the case. You may disclose the theory of your case without revealing all the weapons in your
arsenal during an examination for discovery and still gain the advantage of surprise at trial. For
example, some senior counsel deliberately send another lawyer to conduct the examination for
discovery so that the witness does not get a preview of his or her cross-examination style before
trial. At trial, the witness is then disarmed by the cross-examination conducted by different
counsel.20 You may wish to use this tactic, when you are dealing with a sophisticated party and a
sophisticated witness.
While there is no harm in telegraphing the theory of your case during a discovery, it is not
always best or necessary to conduct an examination for discovery in a logical chronological
order. Whether or not you proceed with questions dealing with factual issues in chronological
date order or not, depends largely on the complexity of the case, the length of the discovery and
the nature and sophistication of the party who is being examined. This is a judgement call that
has to be made by the lawyer conducting the examination.
Another question that is often asked is whether or not you should cross-examine during
discovery. Whether or not you choose to cross-examine during discovery depends upon your
objective during discovery and often, the individual lawyers style. Cross-examination may be
useful in obtaining key admissions from a party but may not be as useful in discovering the facts
that the opposing party will be relying upon at trial. At discovery, it is more important to know
what the answer is going to be than to get any particular answer. You do not always need to be in
control. One experienced lawyers view is that while Rule 31.06 has removed the bar against
cross-examination, one should use cross-examination sparingly during examination for discovery
because:
i.

answers solicited may be given less weight;

ii.

cross-examination during discovery allows your opponent to preview your cross-examination

style;

iii.

cross-examination is generally a less effective method of gathering information; and

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iv.

aggressive cross-examination may antagonize the other party and damage the chances of
obtaining admissions or resolving the action through settlement. 21

Whether or not you conduct a lengthy examination for discovery depends largely on the
complexity of the case, the sophistication of the witness and the extent of the documentation.
However, even in a complex case involving numerous witnesses and thousands of documents,
often the theory of the case can be made quite simple. For example, in an abuse of dominance
case under the Competition Act, involving numerous witnesses, proof of the relevant market,
evidence of economists regarding product substitutes, the theory of the case will be quite simple
that the party being prosecuted is a monopolist and that the cost to consumers of the monopoly
is higher prices, less selection, and lack of competition with respect to the product or service at
issue.
Sometimes, documentation produced during the course of discovery further buttresses the theme
or theory of your case. Increasingly, information is being created, stored and communicated
electronically. Many types of information that can play a useful role in litigation are no longer
printed on paper but are stored within the computer system or in computer?readable form.
Therefore, electronic evidence should also be targeted as part of your documentary discovery of
the opposing party.
Electronic evidence should be sought and produced as part of a partys documentary discovery
for a number of reasons:
i.

Access can be obtained to incriminating evidence that the other party did not know existed or
thought was deleted or not saved. (Backups are often performed of the entire computer system
and a copy of all electronic information is captured to a backup tape.);

ii.

Access can be obtained to informal comments sent through an e-mail system that would not have
been otherwise committed to writing in a formal document. (An e-mail written by Los Angeles
Police Officer Lawrence Powell that was introduced during the trial in the Rodney King beating
contained a passage which read: Oops, I havent beat anyone so bad in a long time.) 22

iii.

Even where paper printouts of documents or agreements are available, older draft versions may
only be available in electronic form;

iv.

It may be possible to obtain electronic copies of paper-based documents that were altered,
destroyed or hidden. (You should also be aware that electronic data is more vulnerable than
paper-based documents because it can be more easily altered. With proper technical knowledge,
the alteration of electronic data may also be easier to cover up.) 23

Determine if electronic data may play a role in the dispute. Request an inspection of the
electronic version of any relevant documents including ones being provided in paper-form,
where it is relevant to your case. Electronic copies of electronic evidence should also be
requested. The more data that can be obtained in electronic form, the better. Aside from the
possibility of providing valuable information not revealed in printed copies, they can also
facilitate the entry of information into a litigation support system.

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Formulating your Questions

In formulating your questions, keep in mind the legal issues or theory of law set out by the
pleadings, the component parts that must be proven, the underlying facts as disclosed by the
documents, interviews with witnesses, and provided by the information obtained from your own
client as well as the theory of the case. In other words, as in the Exxon case, if you do not intend
to deny liability for the damages claimed, no questions should be asked in this regard nor should
your client, at its examination, deny liability. Also, keep in mind, not only the facts which are
being relied upon by the opposing party in support of their case, but ask questions of the
opposing party regarding your clients theory of the case.

Should You Ask Colourful Questions

In asking questions, keep in mind the fact that most people will not become upset at an attempt
to elicit some additional evidence or facts. However, few people will not be upset by an attempt
to impeach them as credible witnesses. A witness is not likely to be in a mood to volunteer
additional help or information after his or her honesty has been called into question. Therefore,
when preparing an outline of discovery questions, it is desirable to set out or to start with
questions which are less emotionally laden or charged and move up the scale of questioning as
far as one needs.

How Do You Flush Out Your Opponents Theory?

The examination for discovery should be used as an opportunity to tie down the story of the
opposing party. If you are concerned that the opposing party will tailor his or her testimony to
avoid damaging evidence given by your client, hold your examination for discovery of the
opposing party first. Alternatively, others share the view that you should allow your opponent to
examine your client first which allows you to evaluate your opponents theory of the case, which
may be helpful for discovery of the opposing party. In this regard, you should pay close attention
to the opposing counsels questions during a discovery, as this will provide clues about the
direction of the other sides case. Another tactic which can be used to flush out the theory of the
case is when the opposing side refuses to answer a question. Insist that the opposing party
provide reasons for the refusal. Often the reasons given will shed some light on the opposing
partys theory of the case.

The Cardinal Rule

It is difficult to describe how one goes about putting a theory of the case into practice. There is a
surprising lack of legal writing in this area, particularly the application of the theory of the case
to the discovery process. The objective of developing a theory of the case at the discovery stage
should not be forgotten - to lend credibility and plausibility to your clients position and to
discover your opponents theory as well as their position concerning your theory of the case.
Remember that the examination for discovery provides you with the evidentiary foundation for
the trial. One of the important rules not to be broken is that you should never do anything
inconsistent with your theory of the case.
Karen B. Groulx. Reprinted with permission.
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1. The Theory of the Case, J. McElhaney, Trial Note Book (1981), American Bar Association,
Chapter 3, p. 50
2. Blacks Law Dictionary 5th Edition
3. The Theory of the Case, supra, p. 48
4. The Theory of the Case, supra, p. 50
5. Olah. J.A., The Art and Science of Advocacy, loose-leaf (Toronto: Carswell, 1990), pp. 1-30
6. Stuesser, An Advocacy Primer, Second Edition, at p. 4
7. Geoffery D. E. Adair, On Trial: Advocacy Skills Law and Practice, 1992, pp. 362-365
8. Jones v. Direct Transport (1991), unreported Ontario (General Division)
9. Maybanks v. Federal Industries (1987), unreported, Ontario S.C.
10. Stuesser, An Advocacy Primer, Second Edition, at p. 3
11. Leary v. R. (1977), 37 C.R.N.S. 60 (S.C.C.), p. 73
12. The Theory of the Case, supra, p. 49
13. The Theory of the Case, supra, p. 54
14. Article entitled, Disarming Tactics: Good Things Can Happen When You Do The Unexpected
by James W. McElhaney, ABA Journal, December 1997, Volume 83, p. 76
15. Olah, J.A., supra. at p. 130
16. Olah, J.A., supra. at pp. 1-117
17. Olah, J.A., supra. at pp. 5-8
18. Olah. J.A. supra. at pp. 5-5 to 5-10
19. Robert B. White, Q.C., The Art of Discovery (Toronto: Canada Law Book, 1991) at pp. 14-15
20. David Stockwood, Civil Litigation: A Practical Handbook, 4th ed. (Toronto, Carswell, 1997) at p.
73
21. Olah, J.A., supra, at pp. 5-48
22. Alan M. Gahtan, Discovery of Electronic Evidence in Kenneth M. Matthews, ed., The Expert:
A Practitioners Guide, Vol. 2, loose-leaf (Toronto: Carswell. 1995) at 17A-2, footnote 5

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23. Gahtan, supra, note 12 at p. 17A

Negotiating With the Other Side

A. Conflict Analysis
Conflict Analysis
A Continuum of Dispute Resolution Processes

What do the many different analyses of conflict described in this chapter suggest for the design
of dispute resolution processes? An obvious observation is that the one size fits all ideology of
the common law legal system that assumes that all disputes can, and should, be dealt with
through adjudication is both inappropriate and unrealistic. This ignores the complexity and
variety of conflict and our complex and varied responses to it. The adjudicative process of courts
and tribunals remains an important mechanism for resolving some types of conflict; a later
chapter in this book (chapter 6, Arbitration) is devoted to adjudication and its sister process,
arbitration.

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The range of dispute resolution processes possible is limited only by our imagination. It is often
conceived of as a continuum, with adjudication at one end of that spectrum. At the other end one
might place processes designed to address the possibility of disputes before they have actually
arisenpreventive processes such as group team building, partnering in the construction
industry, contract planning, and so on. In between lie dispute resolution processes variously
characterized by their degree of voluntariness or coercion, both in relation to participation in the
process and whether its outcome is consensual or imposed, by the extent to which the outcomes
are subject to public account, and by the extent to which external rulesfor example, legal rights
are used in building a solution and enforcing the outcome.
Paul Emond, in the extract below, describes the dispute resolution continuum as running from
consensus at one end to command at the other. His model also reflects a range of different
roles for third parties intervening in disputes.

Julie Macfarlane. Reprinted with permission

ADR: A Conceptual Overview
Relating Disputes to Process

[It has been suggested] that dispute resolution processes can be divided first between the
irrational (chance, strength) and rational (vote, authoritative command, adjudication and
negotiation) and, in the context of rational processes, between those that are clustered around the
authoritative command model and those that are characterized by one form or another of
consensual dispute resolution. Of the two, rational processes deserve further examination. They

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appear to divide into a number of process types, all of which fall along a continuum [see figure:
Rational Dispute Resolution Model].
Almost every characteristic which one would use to describe a dispute resolution process falls
between two extremes along the continuum. And, as one moves toward the middle of the:
continuum, process types begin to converge toward but not reach a single model of dispute
resolution. The following examples demonstrate this point. Negotiation is a private process,
political or legislative command a public process. As one moves from negotiation toward
conciliation and mediation the process acquires more and more public characteristics,
particularly if the conciliator or mediator is either publicly appointed or funded. Conversely, as
one moves from political command, to adjudication and finally to pre-hearing negotiation
(mediation) conducted by the adjudicator, the process becomes less public, and hence less
susceptible to public scrutiny. A similar point might be made with regard to accountability. The
process of negotiation is only accountable to the disputants.
Political, administrative and judicial processes, on the other hand, are subject to a number of
checks and balances designed to preserve the integrity of the process and the public acceptability
of the result. Again, as one moves toward the middle, the process types converge so that a
publicly funded mediator is (or should be) accountable in some sense to the public, whereas
adjudicators acting as facilitators or mediators feel less constrained by public accountability
provisions than when acting as neutral decision-makers. A similar observation may be made with
regard to the structure or formality of the process. Negotiations tend to be unstructured, ad hoc
and responsive to the particular needs of the parties. Adjudication, legislative decision-making
and other forms of authoritative command tend to be highly structured and, while responsive to
the needs of the parties, much more concerned with the needs of the public. And again, as one
moves toward the middle of the continuum, each dispute resolution type more closely resembles
the other.
Finally, a similar observation may be made with regard to the ways in which the parties
participate in the two principal dispute resolution process types. Negotiation maximizes disputant
participation. There are no predetermined limits on who may participate in the process. The only
limits are those agreed to by the parties themselves. Participation is voluntary, direct and
relatively unstructured. How and when parties participate is a matter of individual choice,
although the many books on effective negotiation tend to structure and shape negotiation along
more formal and predictable lines. At the other end of the spectrum, participation by affected
parties is much more limited. At most, legislative committees hear submissions and managers
consult with affected members of the public. Often there is no real public input at all. Again, as
one moves toward the middle of the continuum, the two dispute resolution models tend to
converge. Thus, negotiators in a highly structured mediation may be required by the mediator
to participate through formal channels in which agendas are pre-set, presentation and argument
made, and persuasive but non-binding reports issued by the mediator. Similarly, as one moves
from administrative fiat, to judicial adjudication, to pre-hearing mediation, participation tends to
more closely resemble that which is characteristic of negotiation. ...
Participation is a dynamic feature of any dispute resolution process. Participation and
participants will tend to change over time, particularly in complex lengthy disputes that involve
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voluntary dispute resolution processes. Participants will also tend to move in and out of the
process in proportion to such factors as: their access to resources; the degree to which they are
affected; and strategic considerations.
One advantage of describing dispute resolution in terms of a continuum is that it reminds
disputants that processes are not mutually exclusive, that one blends into another and that there is
no reason in theory or principle why processes cannot be mixed and matched to meet the needs
of the parties and the dispute.

P. Emond. Reprinted with permission.

B. Design Elements and Choices

Design Elements and Choices

Designing a Single Process
Process Choices
Choices of dispute resolution mechanisms and combinations of processes to create a system are
limited only by our imagination. The full spectrum of dispute resolution processes is also
described and discussed at the end of chapter 1, Conflict Analysis. Reproduced below are
excerpts from a Law Society of Upper Canada document that provides an alphabetical list of
more than 50 process choices, along with a brief definition for each one.

The Law Society of Upper Canada

Glossary of Dispute Resolution Processes
Adjudication: Any of the forms of dispute resolution in which the parties to the dispute present
proofs and arguments to a neutral third party who has the power to deliver a binding decision,
generally based on objective standards. The term subsumes arbitration and litigation.
Advisory Opinion: A non-binding, objective assessment of the relative strengths of the
opposing positions in a dispute and the probable outcome of the case if it were to proceed to trial,
rendered by a neutral third party, provided to stimulate settlement.
Amicable Composition: A process similar to arbitration wherein a third party adjudicator
conducts a hearing and renders a binding decision in the dispute which is based on a compromise
of the parties interests rather than an absolute determination of the rights of the parties.
Arbitration: Any of the forms of dispute resolution involving a mutually acceptable, neutral
third party making a decision on the merits of the case, after an informal hearing which usually
includes the presentation of evidence and oral argument. The process has four main variations
(creating numerous permutations):
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binding or non-binding;

voluntary or compulsory;

private, statute-authorized, court-annexed (alternatively termed court-connected);

one arbitrator or a panel.

Binding arbitration: Any form of arbitration in which the parties agree or a statute or court
directs that the decision of the arbitrator is conclusive of the dispute. In limited circumstances,
the decision is subject to judicial review.
Compulsory arbitration: Arbitration of disputes which the parties are obliged to submit to
arbitration either pursuant to the terms of a contract which the parties entered prior to the dispute
or pursuant to the provisions of a statute.
Final offer arbitration: See Final Offer Selection
Grievance arbitration: A form of labour arbitration wherein the parties submit disputes over
rights that arise under an existing collective agreement.
Interest arbitration: A form of labour arbitration wherein the parties submit a dispute over the
terms of a proposed collective agreement.
Mandatory court-annexed arbitration: (Also Court-annexed Compulsory Arbitration.) A process
whereby parties to litigation are required to present their cases before a court-appointed
arbitrator, usually a retired judge or senior lawyer, in an informal meeting. The arbitrator renders
a non-binding decision which will be entered as a judgment of the court if not disputed by any
party; if the award is not accepted, the parties retain their rights to proceed to a traditional trial
without reference to the arbitrators decision, although a party rejecting that decision and
requiring a trial will typically be subject to a cost penalty if a more favourable decision is not
obtained.
Non-binding arbitration: Any arbitration process wherein the parties are not bound to accept the
decision of the arbitrator as a conclusive disposition of the dispute.
Private arbitration: Any process wherein two or more parties agree, either prior to any dispute
within the contract establishing their relationship (on either a compulsory or voluntary basis) or
by an agreement in response to a dispute, to submit their dispute(s) to arbitration. The parties
determine the parameters and procedures which will govern the arbitration and may impose a
range (High-Low) in which any acceptable result must fall. The decision of the arbitrator is
typically binding on the parties subject to limited judicial review.
Voluntary arbitration: Any form of arbitration in which the parties may choose whether to
submit a particular dispute to arbitration.

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Voluntary, binding court-connected arbitration: A process wherein the parties to a court

proceeding agree to submit their dispute to an arbitrator of their choice, approved by the court.
The hearing before the arbitrator is a procedure of record. Thus, the evidence and argument are
recorded, and the transcript becomes part of the public record. Formal rules of procedure and
evidence may be relaxed by agreement. The parties are subsequently bound by the decision
which is entered as a judgment of the court.
Avoidance: The simplest form of dispute resolution in which the aggrieved party ends the
dispute by forgoing its rights and taking no steps towards any relief.
Conciliation: An informal process in which a passive third party is positioned between the
parties to create a channel for communications, usually by conveying messages between parties
who are unwilling to meet face-to-face, to identify common ground and to eventually re-establish
direct communications between the parties. The term is often interchanged with mediation;
however, conciliation involves a more passive third party. The process can be readily combined
with mediation.
Court-connected conciliation: A conciliation program incorporated into the court process in a
fashion identical to court-annexed mediation. The timing of the introduction of conciliation, the
qualifications of the conciliator and the subject matter of the conciliation vary between programs.
Confidential Listening: A process wherein a neutral third party reviews the confidential
settlement positions of all parties and advises the parties whether a negotiable range exists but
does not disclose any further information. The parties may agree beforehand to settle at the
midpoint of any range revealed by the process.
Consensus Making: (Also Consensual Resolution) The broad category of dispute resolution
processes, including negotiation, mediation and therapeutic intervention, in which the parties
develop a solution to a dispute by mutual agreement rather than by adjudication.
Court-Annexed Mediation: See Mediation
Court-Connected Conciliation: See Conciliation
Dispute Prevention: Initiatives which persons and organizations take to structure their
operations to minimize the risk of disputes and/or structuring relationships by contract to avoid
litigation of disputes that may arise.
Compliance programs: A form of dispute prevention whereby key employees are familiarized
with legal and regulatory restrictions relevant to their operations in order to stimulate the
restructuring of those operations to minimize violations.
Legal Audit: A review of an organizations activities by counsel to identify sources of potential
disputes and to restructure current activities to reduce the risk of those disputes.

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Negotiated Rule-Making: A broad concept embracing all processes, such as Notice and
Comment and On the Record Rule-Making, in which a rule-maker, typically a government
department, incorporates input from those persons with an interest in a proposed rule or
regulation into the substance of the rule. The term may be extended beyond the government
context to any negotiation focusing on the structuring of the future relations of parties.
Preventative Mediation: See Mediation
Quality of Working Life Programs (QWL): An informally structured program established in a
workplace to encourage industrial democracy by involving employees to some degree in decision
making and workplace design.
Early Neutral Evaluation (ENE): A non-binding process, typically required under the
relevant rules of court, wherein the parties and their counsel meet shortly after the initiation of a
court proceeding and confidentially present the factual and legal bases of their cases to each
other and a third party lawyer experienced in the substantive area. The third party identifies
issues, assesses the strengths of the cases, structures a plan for the progress of the case, and, if
requested by the parties, may encourage settlement.
Final Offer Selection: (Also Final Offer Arbitration.) A form of arbitration wherein both parties
submit their best offers to an arbitrator who must select one as the binding award, usually
following a hearing of the parties cases.
A variation involves the parties submitting their best offers to a court office, simultaneously
with a determination of an award by an arbitration judge. The party whose offer is closer to the
decision is awarded the amount of its offer.
Another variation could permit the arbitrator to select items for each partys offer, rather than
selecting the entire offer of one party.
Modified Final-Offer Arbitration: A variation of final offer arbitration wherein the arbitrator may
reject both offers as being unacceptable and propose an award. The parties may either accept the
award or reject it and require the arbitrator to select one of the offers.
Multiple-Offer Selection: A variation of final offer arbitration wherein the parties submit a predetermined number of different offers to the arbitrator who selects one and announces which
partys offer has been selected but does not identify the particular offer. The other party then
chooses one of the offers submitted by the selected party. This variation is most effective where
several issues have been submitted to arbitration.
Repeated-Offer Selection: A variation of final offer arbitration wherein the arbitrator may require
the parties to submit new offers after determining that the first offers were both unacceptable.
Mandatory Court-Annexed Arbitration: See Arbitration

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Mediation: Some degree of intervention in a dispute or negotiation by an impartial, neutral third

party who has no decision-making power. The third party informally assists disputing parties in
voluntarily reaching their own mutually acceptable settlement of issues in dispute by structuring
the negotiation, maintaining the channels of communication, articulating the needs of each party,
identifying the issues, and, if requested, making recommendations on disputed issues. The
process may involve counsel, but open communication between the parties as well as between
their counsel is encouraged.
Closed mediation: Mediation in which all discussions are confidential and the mediator is not a
compellable witness in any subsequent proceeding. As the overwhelming majority of mediations
are closed, the use of the term mediation without qualification connotes closed mediation.
Court-annexed mediation: This form of mediation exists where mediation services are
incorporated into the court process and may either be ordered by the court or voluntarily agreed
to by the parties. The parties maintain their rights to proceed to trial if mediation fails. Any
settlement that is reached becomes a judgment of the court. The term is often used
interchangeably with court-annexed conciliation.
Open mediation: Mediation after which the mediator either files a report with the court which
ordered the mediation to occur or is compellable as a witness in any subsequent proceeding.
Preventative mediation: A program which is intended to establish a more cooperative approach
to conflict resolution, rather than resolving actual conflicts, in the labour relations context. It
consists of three elements:

joint action committees which provide a communication channel between labour and
management representatives, sometimes with a mediator;

relationship improvement seminars to establish dispute resolution strategies; and,

joint training programs.

Med/Arb: This process commences as a mediation of a dispute by a neutral third party, but if the
mediation does not successfully resolve the dispute, the third party assumes the role of arbitrator
and imposes a (typically binding) decision upon the parties.
Mini-Trial: This informal and inherently flexible process, typically used in commercial disputes
between corporate entities, combines mediation, negotiation and non-binding arbitration. The
exact structure is determined by agreement between the parties, but involves, after a limited
preparation period, the summary presentation by counsel of each partys best case to a panel
consisting of the opposing decision-makers (who have had no personal involvement in the
dispute) and usually a neutral third party. The third party may render an advisory opinion at the
conclusion of this information exchange. The principals then attempt to negotiate a settlement
with the assistance of the third party acting as mediator. If no settlement is reached, the parties
may proceed to trial. This process is distinguishable from a summary trial.

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Negotiation: Any form of communication, direct or indirect, whereby parties who have opposing
interests discuss, without resort to arbitration or other judicial processes, the form of any joint
action which they might take to manage and ultimately resolve the dispute between them.
Principled Negotiation: An alternative to traditional competitive or cooperative negotiation in
which the parties focus on the issues in dispute, rather than the positions taken by the parties, and
attempt to understand the needs of the other party and create new options which achieve mutual
gain as assessed by objective standards.
Neutral Case Evaluation: Any process within litigation in which the parties or their counsel
present their cases to a court-appointed, neutral third party, typically a senior lawyer with
expertise in the substantive area of the dispute, who renders an advisory opinion on the issues
presented.
Ombudsman: An independent officer of a government or other large institution who
investigates complaints of administrative injustice and attempts to mediate disputes between
aggrieved members of the public and the government or institution. The traditional use of the
word has been limited to government and public bodies (such as universities).
Pre-Trial Conference: An informal dialogue between a judge, other than the trial judge, and
counsel directed to encouraging settlement, focusing the issues for trial, obtaining agreements as
to evidence, refining the cases to be presented at trial, and providing a non-binding assessment of
the dispute by a judge. The issues which a particular conference focuses on vary between
systems and judges. The parties to the dispute are typically encouraged to attend these meetings;
in the absence of a party, counsel must have adequate instructions to settle the dispute.
Private Judging: A process agreed to by the parties whereby the dispute is presented to a neutral
third party, typically an experienced lawyer or retired judge, hired by the parties, who renders a
binding decision. The third party may be drawn from a private court. The process assumes the
form of a private trial, governed by the rules of the private court or rules specifically drafted by
the parties, and relevant arbitration legislation. The judge may serve as a mediator initially.
Referee: A neutral third party, typically appointed by the court, who arbitrates one or more
issues in a dispute under prescribed rules.
Summary Judgment: A formal procedure established by the rules of court which enables a
party to a court proceeding to apply to a judge prior to trial to obtain full or partial judgment in a
case where there are few or no facts in dispute and the issues between the parties are questions of
law or of the application of the law to the facts of the case. The procedure enables a party to
conclude litigation of many disputes without trial.
Summary Jury Trial: A flexible procedure available (or alternatively required) late in the
formal litigation process once the case is ready for trial. Prior to an actual trial, counsel for the
parties to a dispute present, off the record, a summary of each partys best case to a jury, selected
by the court from the jury list, which renders a verdict. The jury, in fact, is a mock jury, and its
verdict is not binding, but its members are not advised of this until they have delivered their
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verdict. Counsel may review the case with the jury after the verdict and then continue settlement
negotiations in light of the result.
Therapeutic Intervention: This is a form of mediation in which not only is a solution to the
dispute sought but the relationship of the parties is repaired and the parties individual and
collective abilities to deal with problems are improved.
Trial: A dispute resolution process in which a judge or a jury of the public courts makes a
binding decision on the merits of the case after a full, public hearing, conducted according to
formal rules of procedure, which includes the presentation of evidence and oral argument by the
parties. In Ontario a trial is the final step in an action; an application is a summary procedure by
which litigation may be concluded without a trial.
Umpirage: A variation on a three person arbitration panel wherein the panel originally consists
of only the two arbitrators representing the two parties. The panel begins to hear the case until
the two members disagree on a ruling at which time the panel is required to introduce a neutral
third party as umpire. The umpire can decide the case based on the positions of the other
arbitrators or may reconvene the hearing.

Julie Macfarlane. Reprinted with permission.

C. Negotiation: Basic Concepts

Negotiation: Basic Concepts

Positions
A position is a demand or proposal presented by one party to the other party. It is a stance taken
or a proposal for resolving a dispute. It purports to describe what its author wants out of the
negotiation. The seller of a car will offer to sell for $35,000.00. The buyer responds by saying
that she will only pay $30,000.00.
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Positional approaches to negotiation use the initial offers to define the bargaining range and zone
of possible agreement. The parties usually seek an agreement by making concessions along the
range defined by the two initial offers.
There are at least two basic objections to positional negotiation:
1. Because the bargaining range is defined by the initial offers, positional negotiation often prevents
the parties from identifying additional benefits that could be shared by the parties.
2. Positional negotiation strategies are often based on power. This can lead to competition and
animosity. Parties become entrenched in their positions and are insulted by the offer coming from
the other side. This leads to unnecessary conflict and can have important social costs.

Parties have to make offers or proposals (although it may be possible, if making demands or
offers are avoided, to build an agreement through effective communication of needs and wants).
The challenge is to ensure that the parties do not box themselves in by making demands or taking
positions that increase antagonism and make it harder to reach an acceptable agreement.

Interests
The concept of interests refers to the reasons that explain why a party adopts a certain
position. If a position is what you want, then the interest is why you want it. A partys interests
refer to his or her underlying motivations or objectives, his or her concerns or needs. Principled
approaches to negotiation argue that a focus on interests increases the chances that the parties
will be able to reach a mutually satisfactory resolution because they can find common ground
more easily and will be able to develop creative solutions.

Bargaining Range
The bargaining range is the zone between your ideal outcome and your break-off position. Each
party has a bargaining zone. For the seller of a car, for example, the poles of the bargaining
range are defined by the MSRP (manufacturers suggested retail price) and the cost to the seller
of the car. For the buyer the poles are defined by the lowest price she can realistically expect to
pay and the maximum price payable given her resources. This is close to a uni-dimensional
negotiation because all aspects of the deal are assimilated into the price or all value is
monetarized and dealt with through the price.
Clearly, in any negotiation, you have to understand your maximum and minimum so that you
know whether a proposed agreement satisfies your interests.

Reservation Price
The reservation price is the least desirable agreement that a party is prepared to accept. (For the
buyer it is the highest, she is willing to pay. For the seller, it is the lowest he is willing to
accept.) Anything less desirable will be automatically rejected as unacceptable.

Zone of Possible Agreement (ZOPA)

Without a shared bargaining range or zone of possible agreement, the parties will never succeed
in reaching an agreement. Assuming a uni-dimensional negotiation - for example over the price
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of a car - the zone of possible agreement is defined by the overlap (if any) between the
bargaining ranges of the parties involved in the negotiation. In a commercial transaction, it is
defined by the overlap of the prices at which the seller is willing to sell and those at which the
buyer is willing to purchase.
The challenge is to find ways to ensure that a focus on your existing bargaining range or the zone
of possible agreements does not block you from creating new value that could change the
bargaining range and ZOPA in ways favourable to both parties.

BATNA, WATNA and LATNA

Principled approaches to negotiation use the concept of the BATNA (Best Alternative to a
Negotiated Agreement) to help parties identify their reservation price or walk-away point.
Principled negotiation does not mean that you have to reach an agreement at any price. In any
negotiation there is some point at which you should walk away because the agreement you are
likely to reach is simply not in your interests.
Careful study of the alternatives to a negotiated agreement with this party can help to increase
your bargaining power by giving you choices that you might not be aware of if you focused
solely on the negotiation with this party. For example, if you are purchasing a car, you can look
at other makes or dealers.
In Getting to Yes, Fisher and Ury only talk about the BATNA (best alternative to a negotiated
agreement), but it is probably useful to think about other alternatives: LATNA (likely alternative
to a negotiated agreement) and WATNA (worst alternative to a negotiated agreement). These
assessments of the choices available through negotiation with other parties can give you a more
realistic understanding of your bargaining strength and of what will occur if this particular
negotiation fails.
Understanding your alternatives will also ensure that you have an accurate estimate of your
reservation price. If you can easily get what you want elsewhere at an advantageous price, you
will be less dependent on the other party to satisfy your needs and can have a higher reservation
price.

Options
Fisher and Ury stress the importance of generating as many options as possible while you are at
the planning stage. Options are possible agreements or solutions to the conflict that satisfy your
clients interests. If you are creative in generating options, you will avoid adopting a positional
mindset in your own planning that, in turn, may help you avoid being positional at the outset of
the negotiations with the other party. As well, if you think carefully about the interests of the
other party you may well come up with a value-creating proposal acceptable to the other party.

Objective Criteria
Objective criteria are criteria for determining the merits of a proposal that are independent of the
subjective point of view and power of each party.

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Objective criteria permit you to decide whether or not a proposed agreement satisfies your
interests or those of both parties without relying on power or persuasion.
In preparing to negotiate, you can develop your own objective criteria that you will use to assess
proposals coming from the other party. These do not necessarily have to be shared with the other
party. Objective criteria help you avoid an overly optimistic assessment of the proposal when
you get caught up in the enthusiasm of reaching an agreement. They also help you avoid
reactive devaluation of a proposal if you are negotiating with a party of whom you are
suspicious.
You can also share these criteria with the other party. When using them in explaining your
proposal to the other party you may be able to convince them of its merits by showing that
objectively the proposal satisfies their interests.
If both parties can agree on objective criteria, they may reach a shared assessment of the merits
of the proposal and avoid a result based solely on power.
Objective criteria can make it easier to reach a negotiated agreement.
Conclusion
All negotiations require careful preparation. If you try to wing it you are more likely to be drawn
into positional bargaining when such bargaining is not in the interests of your client.
The principled approach to negotiation helps you avoid these traps by focusing on
1. the interests of both parties;
2. their alternatives in the case of negotiation failure (BATNA, LATNA and WATNA);
3. options for solutions; and
4. objective criteria for the assessment of options.

This focus will ensure that you only agree to something that is better than the alternatives and
actually satisfies your interests.

D. Guide For Negotiation Preparation

1. What are the issues to be resolved in this negotiation?

2. What is your clients position on each issue?
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3. What are your clients reasons for his or her position i.e. interests, motives, objectives?
4. What options, other than your clients stated position, are or may be available to meet
your clients interests, motives or objectives?
5. What is the other sides position on each issue?
6. What do you or your client believe are the other sides reasons for the position taken on
each issue? Are you able to determine the other sides interests, motives and objectives?
7. Do you need more information to determine the other sides reasons for his or her
position? How will you obtain that information?
8. What are possible terms or suggestions that may address the interests, needs or objectives
of both parties?
9. Is there a bargaining range or zone of possible agreement on the issues?
10. What is your reservation price or break-off point? What is your bottom line?
11. Do you have full authority to negotiate a binding settlement? Note any restrictions on
your authority.
12. If your client is an organization, does the instructing individual have authority to
negotiate a binding settlement? Note any restrictions on your authority.

E. Prepare for Negotiation (Rooster Jack Case File)

Preparing for Negotiation

(Rooster Jack Case File)
You will be representing Phillip Horner, the Franchisee, in the negotiation with the
Franchisor, Rooster Jack (Canada) Ltd. After you have read the enclosed information,
consider the following:
1. What are the issues that have to be resolved in this negotiation?
2. What is your client's position? Has it been communicated to the other party?
3. What is the other party's position? (Speculate if not known)
4. Identify your client's needs and interests, ranked in order of importance.
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5. Identify and rank the other side's needs and interests.

6. Identify possible options for agreement which satisfy these interests.
7. What is your client's best alternative to a negotiated agreement?
8. What is the other party's best alternative to a negotiated agreement?
9. What is your negotiating strategy?
10. Do you have full authority to negotiate a binding settlement? Note any restrictions.

Rooster Jack (Canada) Inc., the Franchisor, and Philip Horner, the
Franchisee
A Franchisor (Rooster Jack (Canada) Inc.) and a Franchisee (Philip Horner) are facing a potential
lawsuit for negligence. The claim arose as a result of the death of a customer at the Franchisee's
restaurant due to a fatal allergic reaction to sulphites contained in Rooster Jack's salad dressing.
Assume you represent the Franchisee in an upcoming negotiation with the Franchisor relating to
their respective liability, and any other issues arising out of this threatened lawsuit.
The file contains the following documents:
1. Background information (shared by both parties);
2. Additional facts and information common to both sides:
a. Information about Rooster Jack Fresh Salads;
b. Extracts from the Rooster Jack Franchising Agreement;
c. Background facts about Sulphites; and
d. Information about life-threatening reactions to food allergies.
3. Confidential notes from the client interview conducted by your supervising partner.

The facts provided make reference to laboratory analyses and tests to determine the presence of
sulphites and their levels as well as medical opinions. For the purposes of this exercise, please
assume that these analyses and tests have been conducted and the opinions given and the
information resulting from them is accurate and reliable.

Background information
Rooster Jack (Canada) Inc. operates a fast food chain with 25 franchised outlets throughout
Ontario selling fried chicken, hamburgers and pizza as well as vegetarian dishes and healthy
alternatives. It has spent considerable amounts of advertising dollars to promote its image as a
provider of healthy food. It is owned by an American parent company, Rooster Jack Restaurants
USA Ltd. and only entered the Ontario market two years ago. It plans to expand to up to 75
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Canadian franchises in the next five years and is eyeing in particular the British Columbia and
Qubec markets.
Like other fast food chains such as McDonald's and Kentucky Fried Chicken, Rooster Jack offers
counter service from its food and drink menu with self-service of condiments, utensils, napkins,
etc. In order to broaden the appeal of Rooster Jack's food products, the company has recently
introduced salads which are sold across the counter pre-packaged in small plastic containers. The
salad dressing, advertised as a special Rooster Jack recipe, is offered as a self-service condiment.
Philip Horner is a Rooster Jack franchisee with a 5-year term. When he bought his franchise for
$137,500 18 months ago, he was one of the first Canadian Rooster Jack franchisees. His Church
Street restaurant has been very successful, exceeding initial projections of earnings.
Three months ago, a customer at the Church Street restaurant, Ms. Sonia Whitehead, fell ill
following the consumption of a salad. It appears that she had an allergic reaction to something in
the salad or in the salad dressing. She suffered severe anaphylactic shock and was taken from the
restaurant by ambulance. She remained in a coma for three days and then suddenly died. Less
than two weeks after her death, the lawyers representing her family announced in the media their
intention to file a negligence lawsuit naming Rooster Jack (Canada) Inc. and Horner as codefendants. They have written to the lawyers representing Rooster Jack (Canada) Inc. and Philip
Horner stating their intention to file the lawsuit next week if the parties cannot negotiate an
acceptable financial settlement. They have proposed a meeting seven days from now.
In this letter, the plaintiff's lawyers allege that, on entering the Church Street Rooster Jack
restaurant and before making any purchase, the plaintiff asked an unidentified cashier at the
counter if the Rooster Jack salad and dressing contained any sulphites (a preservative). The
cashier referred the matter to the restaurant manager, Amy Choi, who confirmed that the salad
dressing contained no preservatives. The plaintiff was accompanied by her husband and teenaged
children who, according to the letter, state that she was always careful to ask this question before
ordering salads because of a bad reaction to sulphites two years ago.
Ms. Whitehead purchased a salad, to which she apparently added salad dressing. She sat down
with her family and began to eat. She almost immediately fell ill. It appears that, for some reason
not yet determined, Ms. Whitehead did not have any form of epinephrine with her and could not
immediately treat her reaction to the food. In the media, Danny Coulter, her husband, is quoted
as saying that she must have forgotten it at home and that this should be a lesson to everyone
with food allergies to have an Epi-Pen with them at all times.
A laboratory analysis of a sample of the Rooster Jack salad and salad dressing identical to the
one Ms. Whitehead ate has apparently shown that small amounts of sodium bisulphites are
present. Common sources of sulphites include vinegar and lemon juice, both used in Rooster
Jack's salad dressing. In addition, salad ingredients are sometimes treated with preservatives such
as sulphite to extend their life. Both the salad dressing (ready mixed) and the pre-packaged
salads are supplied directly to the franchises by Rooster Jack through a supplier chosen by the
Franchisor.

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There has been considerable media attention to this incident with extensive reporting on the
national news. There were regular updates on Ms. Whitehead's condition in the local media and
the announcement of her death has created quite a media controversy over the safety of eating at
fast food chains. The Church Street restaurant has been besieged by reporters who are
questioning staff and clients. Philip Horner, the Franchisee, who has little experience dealing
with the media, has been constantly hounded ever since the incident. He was contacted by the
media for comment on the day Ms. Whitehead's lawyers announced the family's intention to file
a lawsuit. Tired and feeling beleaguered, Horner said that he held Rooster Jack responsible for
the ingredients of their in-house salad dressing which is already mixed when delivered to the
franchises. In response to this customer's enquiry, the manager had referred to the list of
ingredients for the Rooster Jack salad dressing which was provided in the company's Operating
Manual. This list did not make any reference to sulphites. Horner said that his staff was very
distressed about Ms. Whitehead's death, but that the news media should be asking Rooster Jack
(Canada) Inc.'s Head Office what it intends to do about the possible lawsuit.
Rooster Jack issued a statement through its lawyers the following day, which read as follows:
Rooster Jack (Canada) Inc. is not aware of any ingredients in its salad or Rooster Jack salad
dressing that would be likely to produce an allergic reaction of this kind. Rooster Jack Inc. is
taking immediate steps to investigate to determine whether the Franchisee was following Rooster
Jack instructions on the sourcing, storage and preparation of the salad ingredients and the salad
dressing. In the interests of the public, Rooster Jack will be taking immediate steps to investigate
and wishes to reassure the public that breaches that endanger public health and safety will not be
tolerated.
The franchising agreement makes it the responsibility of the Franchisee to ensure against public
liability and usual business losses. The agreement further provides for each side to indemnify the
other against any losses arising as a result of the other's neglect or default.
Without waiting for advice from their lawyers, Rooster Jack's insurer, Metropolitan Insurance
Inc., wrote to Horner stating that in the event of a breach of your contractual obligation to
follow Rooster Jack instructions (contained in the Operating Manual) in all food sourcing and
preparation they shall consider him wholly responsible for the injury to Ms. Whitehead.
Again without consulting their lawyers, Horner's insurance company, State Insurance Inc.,
responded with a letter saying that Rooster Jack is obliged to fully indemnify their insured since
the alleged injury was entirely caused by Rooster Jack's contaminated salad dressing which it
supplied to Horner through a supplier it had selected.
In a separate letter to Horner from its president, Rooster Jack cites Horner's unauthorized
statement to the media as a breach of the franchising agreement, and continues: Your
irresponsible behaviour has likely increased the chances of a lawsuit that can only hurt this
company. I shall be further investigating the circumstances of this incident with a view to
terminating this franchise for breach. Horner responded by saying that Rooster Jack has no
valid reason for terminating his franchise agreement and that, if the agreement is terminated, he

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will sue for breach of contract and enlist the help of the Canadian Association of Franchisees and
the media to ensure that his rights are fully protected.
After a fruitless exchange of phone calls between the parties, which only made things worse, the
Franchisor and the Franchisee agreed that they had better coordinate their response to the
lawyers representing Ms. Whitehead and her family. They have scheduled a meeting of the legal
team representing Rooster Jack and their insurer, and the lawyers representing Horner and his
insurer. The objective is to settle the issues between them prior to meeting the lawyers
representing the Whitehead family to see if a lawsuit can be avoided. At this very preliminary
stage, no discovery has taken place and the evidence is not yet conclusive. However, both
Rooster Jack and Horner are aware of the following facts:
1. Rooster Jack has acknowledged in a without prejudice and confidential communication to
Horner's insurers that both its salad dressing and its pre-packaged salads contain trace amounts
(estimated at 0.003g per 15ml serving) of sulphites. However, Rooster Jack has obtained a
medical opinion which states that the presence of sulphite in such minute amounts is highly
unlikely to produce an allergic reaction of this severity.
2. Neither Rooster Jack nor Horner has yet seen the plaintiff's detailed medical evidence, including
the breakdown of the laboratory test (although they have their own data). The letter from Ms.
Whitehead's lawyers refers simply to the presence of sulphites and describes the plaintiff's
condition as anaphylaxis, i.e. severe allergic shock reaction. The letter also acknowledges that
the plaintiff had a history of known allergic reaction to sulphites.
3. Both sides are aware that allergic reactions to sulphites, especially in trace amounts, are very rare.
4. None of the parties involved in this dispute has access to the actual salad and dressing consumed
by the plaintiff. It was likely disposed of in the restaurant after the incident and before anyone
was aware of its possible significance.

At issue appears to be the following:

What is the liability of either Rooster Jack or Horner (via their respective insurers) for the alleged
injuries to Ms. Whitehead?

In the event that the Whitehead claim is successful, what degree of responsibility will be assumed
by the Franchisor's insurer and what by the Franchisee's insurer?

Will Rooster Jack terminate Horner's franchise?

Should the parties plan a joint strategy (offer to settle, defence) regarding this claim? If yes, what
should the strategy be?

The following is additional background information shared by both the Franchisor and
Franchisee.

Facts and information common to both sides

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a. Information about Rooster Jack Fresh Salads

b. Extracts from the Rooster Jack Franchising Agreement
c. Some known facts about Sulphites
d. Information about life-threatening reactions to food allergies

a)

Information about Rooster Jack Fresh Salads

The Rooster Jack Operating Manual includes the following instructions regarding its salads.

Restaurants should use only Rooster Jack's pre-packaged salads. These salads should be stored in
an in-store refrigerated facility and not sold more than 72 hours after their delivery.

Salads should be displayed on the counter.

Rooster Jack ready mixed salad dressing is prepared by a supplier chosen by Rooster Jack
(Canada) Inc. The dressing should be made available to customers for their self-service, in the
container provided (in the condiments section of the restaurant). Salad dressing should be stored
in an in-store refrigerated facility. Dressing in opened containers should be used within 96 hours.
Sealed containers may be stored indefinitely.

In the event of a customer enquiry, the composition of the Rooster Jack salad dressing per 15ml
serving is as follows:

canola oil (5.0g)

olive oil (1.0g)

wine vinegar (1.0g)

mustard (0.2g)

lemon juice (0.5g)

aspartame

seasoning

The Rooster Jack Operating Manual also includes the following general instruction for staff
responses to customer questions regarding food product ingredients:
Please try to answer questions from customers regarding food ingredients. The most
commonplace are likely to refer to whether a product is vegetarian (see p6), or whether it
contains peanuts or other nut products (p8). Any question which a staff person cannot answer
with confidence should be referred to Head Office.

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b)

Excerpts from the Rooster Jack Franchising Agreement

All Rooster Jack franchisees contract under a standard form agreement, which sets out various
responsibilities for both the Franchisor and the Franchisee. The terms include the following:

Section Two: Grant and Reservation

2.1
The Franchisor hereby grants to the Franchisee, during the agreed Term and upon the
terms and conditions herein contained, the right and license to use the Proprietary Marks only:
a. in the Business;
b. at and from the Premises;
c. within the Territory;
d. under the Permitted Name
e. in accordance with the System and Operating Manual

Section Five: Day-to-Day Operation

5.1
The Franchisee agrees to implement and maintain each and every one of the following
day-to-day operational standards and acknowledges that the Franchisor is entitled to require strict
compliance in respect thereto:
a. To use all material, ingredients, supplies, utensils, paper goods, uniforms, fixtures, furnishing,
signs and methods of exterior and interior design and construction and methods of product
preparation prescribed by, or which conform to, the Rooster Jack standards and specifications as
set by the Franchisor in the Operating Manual;
b. To refrain from using or selling any products, ingredients, supplies, utensils, paper goods,
uniforms, fixtures, furnishing, signs and methods of exterior and interior design and construction
and methods of product preparation which do not conform with the Rooster Jack standards and
specifications as set by the Franchisor in the Operating Manual;
c. To offer for sale only such products as may be described from time to time in the Operating
Manual upon the terms and conditions therein set out;
d. To maintain at all times a sufficient supply of approved products;
e. To purchase all food products, supplies, equipment and materials required for the operation of the
Franchisee's Rooster Jack outlet from suppliers chosen by the Franchisor or from suppliers who
demonstrate, to the reasonable satisfaction of the Franchisor, the ability to meet all standards and
specifications set by the Franchisor for such items and who have been approved in writing by the
Franchisor. Prior to purchasing any items from any supplier not previously approved by the
Franchisor, the Franchisee shall submit to the Franchisor a written request for approval of the
supplier. The Franchisor may require that samples from the supplier be delivered to the
Franchisor or to a designated independent testing laboratory for testing prior to approval and use;

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f.

Not to do or omit to do any act or thing that may in the sole opinion of the Franchisor bring the
System or the Proprietary Marks into disrepute or which may in the sole opinion of the
Franchisor damage or conflict with the interests of the Business or the other franchisees of the
Franchisor;

g. To comply with all advice and instructions given by the Franchisor with regard to the operation of
the System and in the absence of any such instructions in relation to any particular matter to act in
such a manner as the Franchisee might reasonably have considered to be most beneficial to the
Franchisor;
h. Not to permit its shareholders, directors, officers, employees or agents to make any television or
radio appearances or make any statements to any public media in connection with the Franchisee,
the Franchisee's outlet, or any other Rooster Jack franchisee or the Franchisor without the prior
written approval of the Franchisor;
i.

To hold regular training and assessment sessions at the Premises for all employees of the
Franchisee to ensure their competence in their allotted duties.

Section Six: Continuing Obligations of Franchisor

6.1

The Franchisor agrees at all times during the Term as follows:

a. To permit the Franchisee to operate and promote the Business under the Permitted Name in
accordance with the terms of this Agreement;
b. To provide the Franchisee with advice, know-how and guidance relating to the management,
finance, promotion and methods of operation to be employed in connection with the System and
to provide reasonable facilities for consultation with the Franchisee in connection with any
problems relating to the System from time to time arising with a view to assisting and enabling
the Franchisee to operate and maintain the System and to give the Franchisee the benefit of the
knowledge and experience of the Franchisor;
c. To provide to the Franchisee the products and equipment described in the Operating Manual on
the terms from time to time therein specified and to assist the Franchisee in procuring such
additional supplies of products and equipment as may be required by the Franchisee to commence
and operate the Business and to use reasonable endeavours to negotiate and obtain from such
suppliers favourable discount rates for furnishing such supplies to the Franchisee;
d. To indemnify and keep indemnified the Franchisee from and against all loss damage or liability
whether criminal or civil suffered and legal costs and fees incurred by the Franchisee in the
course of conducting the Business arising from:
i.

any negligence or default of the Franchisor or its agents or employees;

ii.

the proven infringement by the Franchisor of the intellectual property rights of any third
party;

iii.

any successful claim by any third party against the Franchisor alleging libel or slander in
respect of any matter arising from the supply of the product, services or conduct of the
Business in the Territory, provided that, and to the extent that, such liability has not been
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incurred by the Franchisee through any default or neglect by it in carrying out the terms
of this Agreement.
e. To maintain (at its own cost) a comprehensive insurance policy with an insurer of repute to cover
the liability of the Franchisor in respect of any act or default for which it may become liable to
indemnify the Franchisee under clause 6.1(d).

Section Ten: Insurance

10.1 The Franchisee shall at its own expense obtain and maintain with an insurance company
acceptable to the Franchisor public liability and such other insurance to cover the usual risks
associated with the System and the Business in such minimum sums and conforming to such
policy limits and provisions as the Franchisor may require.

Section Thirteen: Operating Manual

13.1 Throughout the term the Franchisor will provide the Franchisee with full written details
of any alterations or variations to the form of the Operating Manual to enable the Franchisee to
keep the copy thereof in its possession up-to-date.
13.2 The Franchisor shall keep at its head office a definitive copy of the Operating Manual as
revised and modified from time to time which in the event of any dispute as to the contents or
import thereof shall be the authentic text.
13.3 The Franchisee shall conduct the Business strictly in accordance with the Operating
Manual the terms of which shall be deemed incorporated into, and shall form part of, this
Agreement. In the event of any conflict between the terms of this Agreement and the terms of the
Operating Manual, the former shall prevail.

Section Eighteen: Termination

18.1 The Franchisor may terminate this Agreement forthwith by giving notice in writing to the
Franchisee in any of the following events:
[...]
d) if the Franchisee shall fail to operate the Business in accordance with the System;
e) if the Franchisee shall, in the opinion of the Franchisor, misuse or in any way impair the
goodwill associated with any of the Proprietary Marks or take any action to contest the validity
or ownership thereof;
f) if the Franchisee fails to obtain any prior written approval or consent of the Franchisor
expressly required by this Agreement;
h) if the Franchisee shall be convicted of any criminal offence or is in the opinion of the
Franchisor guilty of gross moral turpitude;

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i) if the Franchisee otherwise neglects or fails to perform or observe any of the provisions of
this Agreement or commits a breach of its obligations hereunder, which breach is not remedied to
the satisfaction of the Franchisor within thirty days of a notice in writing to the Franchisee
requesting a remedy.

Section Thirty Four: Indemnity by Franchisee

34.1 The Franchisee hereby agrees and undertakes fully and effectively to indemnify and keep
indemnified the Franchisor, both before and after the expiry or termination hereof, from and
against all damages, losses, claims, demands, expenses (including legal and professional
expenses), costs, and liabilities which the Franchisor may at any time incur as a result of any
neglect or default of the Franchisee or its agents employees licensees or customers in connection
with the Business, so long as such loss damage liability fees or costs resulted from the Business
and was not due to the default of the Franchisor.

DEFINITIONS
Business means the franchise business of Rooster Jack (Canada) Inc. operated and conducted
under the Proprietary marks using the System more particularly described in the Operating
Manual
Operating Manual means the written specification of the methods, processes, techniques,
systems and schemes devised and complied by the Franchisor to be observed and implemented
by the Franchisee in operating the Business and any amendment or variation thereof at any time
hereafter notified in writing by the Franchisor to the Franchisee.
Products means the products identified by the Proprietary Marks sold in the course of the
Business and described in the Operating Manual
Proprietary Marks means:
a. the Trade Marks;
b. the Trade Name;
c. the copyright held by the Franchisor in any written material plans design or other work relating to
the Products and/or the System.

System means the distinctive business format and method developed and implemented by the
Franchisor in connection with the operation of the Business utilizing and comprising the
Proprietary Marks and certain standard operational procedures, plans, directions, specifications,
methods, management and advertising techniques, part of which are contained in the Operating
Manual.

c)
Some known facts about Sulphites (source: US Food and Drug
Agency)
Sulphites are used primarily as antioxidants to prevent or reduce discoloration of light colored
fruits and vegetables, such as dried apples and potatoes, and to inhibit the growth of
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microorganisms in fermented foods such as wine. Sulphites are also used in other ways, such as
for bleaching food starches and as preventives against rust and scale in boiler water used in
making steam that will come in contact with food. Some sulphites are used in the production of
cellophane for food packaging.
Though most people don't have a problem with sulphites, they are a hazard of unpredictable
severity to people, particularly asthmatics, who are sensitive to these substances. Responses
range from mild to life-threatening.
Sulphite specialists say that scientists, at this time, are not sure how the body reacts to sulphites.
To help sulphite-sensitive people avoid problems, The presence of sulphites in processed foods
most be declared on the label, and the use of sulphites on fresh produce intended to be sold or
served raw to consumers is prohibited.
Since 1985, when the US Food and Drug Agency started reporting on sulphites through the
Adverse Reaction Monitoring System, over 1,000 adverse reactions have been recorded. There
are no Canadian records.
Based on a 1985 study, the FDA estimated that more than 1 million asthmatics may be sensitive
or allergic to the substance.
In 1986, FDA banned the use of sulphites on fruits and vegetables intended to be eaten raw, such
as in salad bars and grocery store produce sections. Grocers and restaurateurs were using them to
maintain the color and crispness of fresh produce. Even before the FDA ban, industry trade
groups had persuaded many of their members to stop using sulphites on fresh produce. No such
ban operates in Canada.
Currently, there are six sulphiting agents allowed in packaged foods. The names by which they
are listed on food labels are:
* sulfur dioxide
* sodium sulphite
* sodium and potassium bisulphite
* sodium and potassium metabisulphite
There are been little media attention to the question of sulphite allergy in Canada, and most
people would be unaware that sulphites could cause allergic reactions.

d)

Information about life-threatening reactions to food allergies

The greatest danger in food allergy comes from anaphylaxis, a violent allergic reaction involving
a number of parts of the body simultaneously. Like less serious allergic reactions, anaphylaxis
usually occurs after a person is exposed to an allergen to which he or she was sensitized by
previous exposure (that is, it does not usually occur the first time a person eats a particular food).
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Although any food can trigger anaphylaxis (also known as anaphylactic shock), peanuts, tree
nuts, shellfish, milk, eggs, and fish are the most common culprits. A quantity as little as one-fifth
to one-five-thousandth of a teaspoon of the offending food has caused death.
Anaphylaxis can produce severe symptoms in as little as 5 to 15 minutes, although lifethreatening reactions may progress over hours. Signs of such a reaction include: difficulty
breathing, feeling of impending doom, swelling of the mouth and throat, a drop in blood
pressure, and loss of consciousness. The sooner that anaphylaxis is treated, the greater the
person's chance of surviving. Even if symptoms seem to subside on their own, even if symptoms
seem to subside on their own, the person should be taken to a hospital emergency room There is
no specific test to predict the likelihood of anaphylaxis, although allergy testing may help
determine what a person may be allergic to and provide some guidance as to the severity of the
allergy.
Experts advise people who are susceptible to anaphylaxis to carry medication, such as injectable
epinephrine, with them at all times, and to check the medicine's expiration date regularly.
Doctors can instruct patients with allergies on how to self-administer epinephrine. Such prompt
treatment can be crucial to survival. Injectable epinephrine is a synthetic version of a naturally
occurring hormone also known as adrenaline. For treatment of an anaphylactic reaction, it is
injected directly into a thigh muscle or vein. It works directly on the cardiovascular and
respiratory systems, causing rapid constriction of blood vessels, reversing throat swelling,
relaxing lung muscles to improve breathing, and stimulating the heartbeat. Epinephrine designed
for emergency home use comes in two forms: a traditional needle and syringe kit known as AnaKit, or an automatic injector system known as Epi-Pen. While Epi-Pen delivers one premeasured dosage, the Ana-Kit provides two doses. Which system a patient uses is a decision to
be made by the doctor and patient, taking into account the doctor's assessment of the patient's
individual needs.
Additional confidential information for lawyers representing Philip Horner, Rooster Jack
Franchisee (notes from interview with the clients conducted by the supervising partner)
a. Horner has for some time been purchasing fresh salad ingredients from an unauthorized supplier
without prior approval from Rooster Jack. A number of customers had complained about the
plastic look and taste of the pre-packaged salads, and Horner was about to give up taking them
altogether when a customer suggested that he simply buy fresh salad from the local market and
display it for self-service. This has proved very popular with Horner's clientele. Obtaining salad
greens from this source is also less expensive than purchasing the pre-packaged salads from
Rooster Jack.
b. Whereas the Rooster Jack pre-packaged salads contain some preservatives (see facts above), the
fresh salad bought from the local market does not. Horner has obtained a laboratory analysis of
the salad greens he has been using (and that the plaintiff consumed) and these show that no
sulphites are present in this product.
c. Horner is extremely reluctant at this stage to tell Rooster Jack that he has been obtaining salad
ingredients from an unauthorized source since this will place him in clear breach of the
franchising agreement. However, he has admitted as much to his insurer. His insurer takes the
position that this would have only reduced the potential amount of sulphite in the salad eaten by
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the plaintiff, since this fresh salad contained no preservatives (see above); and that the salad
dressing supplied by Rooster Jack was clearly the source of the problem. The insurer also takes
the view that the information provided in the Franchise Operating Manual which is the
Franchisor's responsibility was incomplete since it did not include listing of sulphite as an
ingredient in the salad dressing (see also below). Therefore the alleged injury was caused not by
their insured but by the default or negligence of the Franchisor, who in such an event must
indemnify the Franchisee.
d. Horner's restaurant used the Rooster Jack ready mixed salad dressing for its salads in accordance
with the instructions in the Operating Manual. The staff who responded to the customer query in
this case consulted the Operating Manual and found nothing to alert them to the possibility of
sulphites. Moreover, Horner has questioned his staff over whether this was ever raised in the
introductory staff training program (conducted at Rooster Jack's Head Office), and has been told
that it was not.
e. The Church Street restaurant has been highly profitable location for Mr. Horner. The projected
gross revenues for a Rooster Jack franchise is $120,000 in year one and $180,000 in year two.
The net profit projections prepared by the franchisor suggest that a typical franchise of
comparable size will make $40,000.00 for year one and $60,000.00 for year two. The Church
Street restaurant had gross revenues of $140,000.00 in year one and half-way through year two
revenues have already reached $110,000.00. Profit margins are also larger than expected. Horner
wants to hold onto this franchise; in fact he wants to apply for three other Rooster Jack franchises
he knows will be opening up in other parts of the city in the next year.
f.

Horner feels that he was caught off guard by the extraordinary media attention this case has
attracted. He feels badly that remarks made off the record to the local press were reported out
of context and appear critical of Rooster Jack. He had specifically asked the reporter if he could
speak to her off the record and, when she consented, he made his comments. He thought that
this would help her understand the situation. When the comments appeared in print, he realized
that you cannot, and should not, trust reporters. But it was too late! However, he also feels that
Rooster Jack should have offered him immediate support and assistance in dealing with the media
in this situation. He was left hanging during this crisis!

g. Horner is outraged at the idea that Rooster Jack might consider terminating his franchise. He
considers that he is being made the scapegoat here. Rooster Jack does not at this stage know that
he has been using unauthorized suppliers for the salad ingredients, but, without this information
(which seems irrelevant since the real problem here seems to be the salad dressing), he sees no
reason why Rooster Jack should even be considering terminating him. The fact that he spoke to
the media (above) was simply a panic reaction. If Rooster Jack does give him notice of
termination, he will sue and enlist the help of the media and, especially, the Canadian Association
of Franchisees, a militant franchisee organization which uses very public tactics to ensure that the
rights of its members are protected.
h. You have been authorized by your clients to negotiate with the franchisor on the issues raised by
this potential lawsuit. Your clients have taken the following positions on each of the issues:

What is the liability of either Rooster Jack or Horner (via their respective insurers) for the
alleged injuries to Ms Whitehead?

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Position: Horner will assume no liability for the injuries.

In the event that the Whitehead claim is successful, what degree of responsibility will be
assumed by the franchisor's insurer and what by the franchisee's insurer?

Position: Horner has no responsibility and his insurer will pay nothing to Ms.
Whitehead.

Will Rooster Jack terminate Horner's franchise?

Position: Rooster Jack has no valid reason for termination of the franchise
agreement and if it tries to terminate the agreement, Horner will sue for breach of
contract and use the media and the Canadian Association of Franchisees to defend
his rights in a very public way.

Should the parties plan any joint strategy (offer to settle, defence) regarding this claim?

Position: On the basis of the above positions, Horner argues that the best strategy
is simple Rooster Jack should admit that the salad dressing was the sole cause of
the injuries suffered by Ms. Whitehead and immediately make a generous offer to
settle so that the lawsuit can be avoided.
i.

You should develop a strategy for the negotiation with the franchisor which promotes the best
interests of your clients. The positions taken by your clients in correspondence with the
Franchisee may not be the best way to advance their interests. You need to use your judgment in
developing your negotiating strategy.

Complete the Matter

Ownership of Documents

Identify which documents belong to the client, and which ones belong to the lawyer:

Accounting records and parts thereof that relate to the client matter - lawyer

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Documents existing before the lawyer was retained - client

Original copies of legal documents such as transfers and charges - client

Original correspondence from the client - lawyer

Working notes, summaries or evidence and submissions to the court - lawyer

Copies of documents prepared by the lawyer for the client - lawyer

Copies of correspondence sent to the client - lawyer

Pre-trial notes and tape recordings of conversations other than with witnesses - lawyer

Inter-office memoranda - lawyer

Vouchers and receipts for disbursements made on behalf of the client - lawyer

Notes and other documents prepared for the lawyers own benefit or protection and at the
lawyer's own expense - lawyer

Personal property such as corporate seals and minute books - client

Time entries or dockets - lawyer

Module 4 Practice Management

Choosing Your Practice

A. Choice of Business Structure or Practice Arrangement:

Choice of Business Structure or Practice Arrangement

Under the Law Society Act and its by-laws, you are permitted to set up your practice as a sole
proprietorship, general partnership, limited liability partnership or a professional corporation.
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The Law Society also recognizes two practice arrangements that involve non-licensees: multidiscipline practices and affiliations.
A sole proprietor or sole practitioner owns and operates his or her professional business alone.
This is the simplest structure for a law practice and may be the least costly as there are few
formal business registrations required. This structure may be appropriate for you if you plan to
practise law alone or to employ lawyers to practise law under your name or your trade name, as
employees of your practice.
A general partnership consists of two or more individuals carrying on business. A limited liability
partnership (LLP) is a specific type of partnership that protects the personal assets of the
individual partners for purposes of professional liability. Your choice of partnership structure will
determine the business registration and regulatory requirements that you must meet. A
partnership, either general or LLP, may be appropriate for you if you wish to practise law with
another lawyer or lawyers and are not in a employee-employer relationship.
A professional corporation is a type of corporation whose business is limited to providing
professional services. When a law practice is incorporated, the resulting professional corporation
is a separate legal entity. The shareholder(s) of this entity must also be its director(s), and must
be licensees. Practising law through a professional corporation does not limit the licensees
professional liability but this business structure may offer tax deferral benefits. However, these
benefits may only be realized after the business has generated income for which the tax may be
deferred. There are also specific requirements that apply to professional corporations that do not
apply to other business corporations. These include restrictions regarding shareholders, directors,
corporate name and the services provided through the professional corporation.
There is no specific legal definition of an association. Lawyers who choose to practise in
association with other lawyers usually operate their separate practices from the same location,
with an agreement to share the overhead costs. Because the term association can mean various
arrangements, lawyers choosing to practise in association are obliged to clearly identify the
nature of the relationship between the associated parties to clients and the public at large.
A multi-discipline practice (MDP) is an association or partnership (that is not a corporation)
between a lawyer and an individual who is not a lawyer licensee who practises a profession,
trade or occupation that supports or supplements the practise of law (e.g. an accountant, tax
consultant, trademark and patent agent, etc.). If the lawyer and non-licensee have entered into a
partnership agreement, it may also be referred to as a multi-discipline partnership.
An affiliation can be defined as "a lawyer or a group of lawyers who has or have an affiliation
with a non-legal entity (e.g. an accounting firm) which regularly joins the lawyer for the
promotion and delivery of their respective services to the public." The definition of an affiliation
is very broad and captures arrangements that range from the informal to the structured and
comprehensive arrangements of a law firm with a non-legal professional services firm.
To determine the most appropriate structure or arrangement for your practice, you should
consider a variety of factors, including
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ownership and control of the business and its assets

liabilities and potential for negligence claims

professional liability insurance for the business structure or practice arrangement

set-up and operational costs for the business, and

tax issues

Consider consulting with an accountant, tax lawyer or corporate lawyer to discuss potential
benefits or drawbacks of each business structure or practice arrangement to ensure that you select
the best structure or arrangement for you.
Checklist

Considerations When Comparing Structures or Arrangements

Whether the terms of the business structure or practice arrangement must be contained in a
written agreement to be recognized (i.e., an LLP) or whether it would just be prudent to do so.

Any legislation that may govern the business structure (e.g. the Partnerships Act if a general
partnership or LLP, Ontario Business Corporations Act if a professional corporation, the Business
Names Act if operating under a trade name, as a general partnership or LLP).

Whether the relevant party (i.e., the sole practitioner, the partnership or LLP and its partners, or
the professional corporation and its shareholder/directors) is subject to the laws that apply to
those contractual relationships (e.g. the Employment Standards Act if employing staff or other
lawyers, the Personal Property and Security Act if leasing equipment, etc.).

Who has the ability to enter into and will be responsible for contractual relationships with third
parties, on behalf of the business entity.

Who owns and controls the assets of the business entity and in what proportion.

Who is responsible for the non-professional liabilities of the business entity (e.g. general liability
may be limited for shareholder/directors of a professional corporation).

Who is responsible for the professional liabilities of the business entity (e.g. professional liability
may be limited for the partners of a LLP).

If the assets of the business entity are insufficient to meet the non-professional liabilities of the
business entity, whether personal assets will be at risk.

If the assets of the business entity are insufficient to meet the professional liabilities of the
business entity, whether personal assets will be at risk.
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Whether the business structure allows the lawyer(s) to enter into an employment relationship with
the business entity (i.e. to receive a paycheque that has the typical source deductions for
Employment Insurance, income tax, and the Canada Pension Plan).

Who is the taxpayer of the business entity and how taxes are paid. Whether the business structure
will require the lawyer(s) involved to file a tax return for the business in addition to a personal tax
return that reports income from all sources, including the business entity. Different methods of
payment (e.g. salary, shareholder dividends, management bonus) will be taxed differently.

When the financial year-end should be. Business income is reported to the Canada Revenue
Agency based on the calendar year. The financial year-end for the business entity will be
December 31st unless the sole practitioner, partnership or professional corporation applies for
permission to do otherwise.

Whether there are specific Law Society requirements for the business structure, practice
arrangement or the lawyers practicing within the specific structure or arrangement [By-law 7
under the Law Society Act] . These may include

requirements related to non-licensees

notification requirements and methods

applications for, renewals or surrendering of certificates

applicable fees

The Law Societys administration, filing and reporting requirements for the business structure or
practice arrangement.

Whether there are other registration or filing requirements for the business structure or practice
arrangement, which are discussed in the Business Registrations section of this Guide.

Whether the business structure or practice arrangement will allow you to continue to meet your
professional conduct obligations, as outlined in the Rules of Professional Conduct [Rule 2.03
Confidentiality, Rule 2.04 Conflicts of Interest, Rule 2.08 Referral Fees and Division of Fees,
Rule 6.01 Responsibility to the Profession].

The professional liability insurance coverage required for each business structure or practice
arrangement. Contact LAWPRO to discuss this.

Added Considerations When Entering Into an Association

Determine the responsibilities of each party in the association and clearly define them. Consider
preparing a written association agreement.

Whether your association could be perceived as a partnership. Courts have used various tests to
differentiate a true association from an apparent partnership, such as whether the parties share

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premises and resources, the use of firm name on pleadings and sharing of bank accounts.
Consider stating the relationship clearly on letterhead, business cards, signage and advertising.

Lawyers practising in association may not share trust accounts. If holding client money you must
deposit it into a trust account that is in your name, or in the name of the law firm of which you are
an employee or a partner [By-law 9 under the Law Society Act].

Added Considerations When Entering an Arrangement With Non-licensees

Whether there are requirements to be met by the non-licensee before the lawyer may enter into a
practice arrangement, including

the non-licensees good character (i.e., in an MDP)

effective control of the non-licensees practice of his or her profession, trade or

occupation

the non-licensees provision of services to clients of the practice arrangement

the non-licensees provision of services to clients outside of the practice arrangement

the non-licensees compliance with the Law Society Act, its by-laws and the Rules of
Professional Conduct

confirmation of compliance with these requirements, in writing

Whether the lawyer is required to carry additional professional liability insurance for the nonlicensee(s) in the practice arrangement.

The professional liability insurance coverage required for each business structure or practice
arrangement. Contact LAWPRO to discuss this.

Lawyers in a multi-discipline practice or an affiliation must not allow the non-licensees signing
authority on any trust accounts. If holding client money you must deposit it into a trust account
that is in your name, or in the name of the law firm of which you are an employee or a partner
[By-law 9 under the Law Society Act].

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B. Should I Open My Own Practice?

Opening and operating your own law practice makes you the owner of a business as well as a
lawyer. The concerns of a self-employed business owner are different than those of an employee
so the decision to open a practice should be well-informed. Before opening your own
professional business, you should first evaluate whether you have or need to develop the
necessary skills and attitudes to do so.
Tools exist to test your suitability to open and operate your own business, some of which have
been included in the Resources section of this Guide. These self-assessment tools can provide
you with a snapshot analysis of your strengths and weaknesses, as compared with those of
successful business owners. Use the test results to determine what skills you lack to either
augment those skills or to tailor your business and business plan accordingly. You will always be
the most important part of your law practice.
Checklist

Personality and Attitude

Consider whether you are

a self-starter

a leader

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competitive

organized

energetic

healthy

a risk taker

Assess your problem-solving style.

Evaluate your planning and organizational skills.

Assess whether you have the management and interpersonal skills to be an effective leader and to
manage others.

Consider whether you have the necessary health, energy and drive to open and maintain a
practice.

Evaluate whether you have the people skills necessary to establish and maintain business
relationships, both internal and external.

Assess whether you can make decisions easily, either autonomously or with outside input.

Consider whether you are flexible and can adapt to changing conditions, financial or otherwise,
as your practice evolves.

Consider whether you are able to handle stress well and how you deal with crises.

Other Considerations

Assess the time needed to focus on your practice and whether you have competing commitments
(e.g. family).

Evaluate whether and how others will be affected if you open your own practice (e.g. long hours,
after-hour demands, financial stress).

Consider how you will separate your business and personal lives, considering health benefits,
insurance, vacation and retirement planning [see the Insuring You and Your Practice section of
this Guide for more information].

Determine what skills or knowledge you will not be able to develop that can be provided by a
third party (e.g. marketing, accounting, bookkeeping, technology services, etc.).

Creating a Business Plan

A. Prepare a Business Plan
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Preparing a Business Plan

A business plan is a document that contains a formal statement of business goals and the plan for
reaching those goals. It may also contain background information about the organization or team
attempting to reach those goals. There is no fixed content for a business plan.
The business plan for your law practice should be tailored for your intended audience. If the plan
is for your purposes only it will contain less detailed information than if it is to be used by a bank
for purposes of financing, or by another party for some other purpose.
When you are implementing your completed business plan, you should regularly review it to
determine if you have met the goals outlined in your plan. If you are not meeting your goals, you
may need to update the plan and amend your original strategies. The process of reviewing and
updating your plan as your goals are met or change is one that will continue as long as you
operate your own practice. The level of formality involved in the review and update process will
be determined by the needs of your audience.

Checklist

When preparing a business plan for third parties, such as financial institutions, ascertain whether
they have a preferred format or template available.

Use plain language and keep your ideas brief. Ensure that your business plan is easy to read.

Use appendices if you include tables, charts, graphs, illustrations, financial statements, resums,
etc.

Create a professional document that is properly printed, indexed and bound.

Prepare a Cover Page, outlining

title

name of the law practice

address of the law practice

key contact people and contact information

Create a Table of Contents, for your audiences ease of reference.

Include an Executive Summary that outlines the most important points of your business plan.
Consider drafting this after the remainder of your plan is complete.

Complete a Practice Summary and Business Environment, describing

nature of the business (i.e. a law practice)

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major demographic, economic, social and/or cultural factors that will affect the practice

competitors and your competitive advantages

Include a section on Practice Management, the Professional Team and Human Resources,
outlining

backgrounds, responsibilities, qualifications and resums of the lawyers involved in

managing the practice

ownership structure (i.e. sole proprietorship, partnership, etc.)

information on the team of professionals you have gathered to advise you (e.g.
accountant, lawyer, IT specialist, etc).

human resource/staffing needs

relevant personnel policies

Create a Marketing Plan, describing

proposed clients

market research

advertising and promotion plans

pricing strategy

Devise an Operational Plan, describing

business location

set-up requirements

equipment needed

required technology

how your practice will operate

Formulate a Financial Plan that outlines

projected financial performance, including a pro forma income statement, pro forma
balance sheet and cash flow statement

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financing requirements (if any) and repayment proposal, including personal wealth
statements of the business owner(s)

Include a Conclusion that restates your aims and objectives and, if the audience is a bank, explain
why you are an excellent candidate for the financing.

Managing Support Staf

A. Delegating Responsibly and Effectively

Delegating Responsibly and Effectively

The excuses lawyers offer for not delegating work are many:

Ill lose control.

The delegatee or student might botch it up.

I need to maintain a level of billable hours.

It takes too much time. I can do it myself just as quickly.

I like to keep my hand in by doing some of these kinds of files myself. or

Its my client and if I delegate the work I wont have the answers to questions I may be asked.

The fact is, these objections rarely stand up to scrutiny: Done right, delegation is a winwinwin-win.
Delegating work, especially routine work, frees up the lawyer (delegator) to tackle more difficult
and demanding work. It also better serves the interests of the firm and the client if these tasks are
delegated to a lower level of competence in the firm. The delegatee (associate to whom the work
is delegated) develops new skills and insights. The client receives quality work at an affordable
price. Often, clients are also impressed by the higher level of motivation, enthusiasm, intensity
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and drive that an associate brings to the file compared to a more senior lawyer who considers the
matter routine.
So the benefits of delegating the art of getting things done through other people are
unassailable. Yet the process of delegating can be difficult for many lawyers.
Effective delegation begins with an understanding of your objective: Your goal is to maintain
control and responsibility while motivating others to help you by performing at their peak
performance.
First, you need to fully understand the nature of the clients work, and then determine what
routine matters can be delegated to a junior, or what specific issues are best assigned to someone
with more expertise than you have in that area.
You also need to be prepared for resistance from the delegatee. Ive never done anything like
this, might be one excuse offered.
Or Im going flat out right now and cant see the light at the end of the tunnel, or I have to
give priority to a file for one of the other partners.
Overcoming this resistance is not as difficult as it appears. Sometimes resistance is most easily
neutralized by simply asking questions which can be followed by some basic negotiating. One
way to address the first situation might be to ask for more information on what is being done for
whom and by when, which may lead to a simple solution of adjusting the timing or talking with
the other partner. Understanding the art of delegating can overcome all the concerns and
resistance identified above.
Confusion and client problems may result if a lawyer suddenly begins delegating responsibilities
to untrained juniors. A gradual approach to delegating is best. Each lawyer should identify client
work that can be delegated. The effectiveness of delegation can be enhanced through training and
practice.
Being effective at delegating client work requires trust in the delegatee. That trust can be
enhanced through proper supervision and coaching. Many abdicate instead of delegate, and then
complain about the inadequate result.
Based on research that Edge International has conducted over many years, we have determined
that there are six key steps to effectively delegating work on a file:

1. Advise your delegatee of the framework of the matter

As you can see from your preliminary review, this has the ingredients of a fairly contentious
contractual dispute. Our client is a company that the firm has represented in numerous corporate,
taxation and labour matters. Some time ago they entered into a joint venture with this other
company on a fairly lucrative government deal, and now the relationship has soured.

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Many lawyers may choose to give the delegatee the particular matter to review in advance of
discussing it in detail.
When you finally come to review the file, you need to explain the matter and how it fits into the
bigger picture. The person to whom the work is being delegated must have an appreciation of
your views of the file, its priority and the likely result. When the matter is underway, the
delegatee will perform better if the background is understood. He or she needs to understand the
broader context in order to exercise good judgment and be flexible if things prove different than
expected.

2. Define the particulars of the clients expectations

Our client has some real concerns over the loss of revenue because of this dispute. I indicated
that we would examine the relevant agreements and documents early this week, initiate a claim
within two weeks, and push for speedy discovery. If at any point you feel that we wont be in a
position to move things that quickly, please warn me.
By covering client expectations you will give the delegatee a better sense of your responsibilities
to the client; you will also reduce the likelihood of surprises on the file. Clarifying client
expectations provides the delegatee with a guideline and helps keep her on track.

3. Communicate any limitations of time, money or other resources

Im assuming that time spent drafting pleadings wont exceed three thousand dollars, and that
you can make this matter your highest priority over the next two weeks. Unlike most other
matters we are handling in this firm, time is more important than money to this client on this
matter.
Many misunderstandings can occur if the delegatee does not understand the urgency or
seriousness of the matter, or financial constraints. Therefore, you need to tell the delegatee how
much you expect to be spent on the assignment. We all function better with a clear idea of the
boundaries in which we can operate.

4. Ask the delegatee to restate the assignment for understanding

Okay, lets review what you see as the general scope of this matter. Why dont you summarize
what you anticipate doing as a result of this discussion.
The best way to review the delegatees understanding of instructions is to ask the delegatee to
repeat his or her understanding of the task. In asking the delegatee to restate the assignment you
might accept some responsibility for giving clear instructions.
Just to make sure I explained it clearly, tell me your understanding of what we need to have
done.
Clarify it now instead of waiting for potential misunderstandings to emerge. A review of the
basic matter, priorities, and questions the delegatee has will improve the level of enthusiasm and
commitment to the task.

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5. Discuss your associates ideas for completing the matter

Based on your own experience, have you any ideas about this matter that we havent discussed
yet?
By discussing the associates own ideas, you can get a sense of how well the matter is being
grasped, provide suggestions, or explain where the delegatee can get help, and cover important
areas that would otherwise be missed.
If the delegatee suggests an innovative course of action and you approve, you get the double
benefit of better work and increased motivation.

6. Establish monitoring procedures

Lets compare notes after your initial meetings with the client and set a time early next week to
review your draft pleadings. How about Tuesday morning at nine, right here?
Delegating does not mean losing control. Specify what you want the delegate to report and how
often. Explain how and when youll touch base. Even though you want the delegatee to assume a
certain amount of responsibility, the ultimate responsibility to the client rests with you.
Remember youre delegating and not abdicating responsibility.
For best results, you need to delegate with quality. Provide specific instructions in a focused,
calm way. Ensure the delegate understands the context into which tasks fit, and communicate
limitations. Obtain input and feedback from those to whom you delegate, based on the
delegatees understanding of the matter and experience with similar work. Establish timelines
and deadlines, and set up a schedule for supervision and feedback.
Although this process sounds timeconsuming, it takes less time than does ineffective delegation.
If you delegate effectively, people will understand what you need them to do. You end up with a
higher quality work product, and will spend less time correcting mistakes and redoing work that
could and should have been done properly in the first place.

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Managing Your Finances

A. Trust Case Study 1

Jack and Jill are sole practitioners carrying on their separate practices of law as associated
lawyers under the name of "Jack & Jill Lawyers" at 130 Queen Street West, Toronto. Jill's
practice is mainly in the area of real estate and estates. Jack's practice is mainly in the area of
family law and civil litigation. Jack and Jill maintain one trust account and one general account
at the Bank of Toronto in the name "Jack & Jill Lawyers." Both Jack and Jill have signing
authority on the trust account. Jack and Jill alternate the monthly responsibility of transferring
the interest they earn on the funds in trust to their general account.
Question 1 of 3
What professional responsibility issues and practice management issues arise from these
circumstances?

Jack and Jill cannot share a trust account. Subsection 7(1) of By-Law 9 requires lawyers
who share trust accounts to be either partners of each other or in an employer/employee
relationship. As Jack and Jill are sole practitioners, they do not meet either requirement so
they cannot share a trust account.

Jack and Jill can share a general account if they wish as the By-Laws are silent on this
point. (This is a business decision.)

The Law Society encourages sole practitioners practising alone to make arrangements for
another licensee, who is permitted to have a trust account, to have signing authority on
their trust accounts to cover unexpected absences such as illness or accident, or planned
absences such as vacations and trials. One way to do this would be to grant a Power of
Attorney for Property to another licensee.

Section 57.1 of the Law Society Act requires lawyers to remit the interest from any mixed trust
account to the Law Foundation of Ontario. Jack and Jill must provide a written direction to their
financial institution to pay any interest earned on the trust account directly to the Law
Foundation of Ontario.
By-Law 9, s.7(1):
Subject to section 8, every licensee who receives money in trust for a client shall immediately
pay the money into an account at a chartered bank, provincial savings office, credit union or a
league to which the Credit Unions and Caisses Populaires Act, 1994 applies or registered trust
corporation, to be kept in the name of the licensee, or in the name of the firm of licensees of
which the licensee is a partner, through which the licensee practises law or provides legal services
or by which the licensee is employed, and designated as a trust account.

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One of Jill's clients, Anita, is the estate trustee of her grandmother's estate. Jill has asked Anita to
bring in a monetary retainer of $12,000: $10,000 to cover court fees and advertising for creditors
and $2,000 for Jill's legal services. The next day, while Jill and Jack are out for lunch, Anita
arrives at Jack & Jill Lawyers and gives the receptionist $10,000 in cash, a cheque for $2,000 for
Jill's fees, and some of her grandmother's bonds in bearer form that she wants Jill to realise for
the estate. The receptionist gives Anita a receipt for $12,000 and then puts the cash, cheque and
bonds in the petty cash box in a locked drawer in her desk until she has time to go to the bank
later in the week.
Question 2 of 3
Identify the professional responsibility and practice management issues.

Section 4(1) of By-Law 9 prohibits the receipt of more than $7,500 cash unless it is for a
reason described in the By-Law. Subsection 6 of By-Law 9 provides for exceptions when
cash funds are to pay for disbursements. The $10,000 is for the payment of estate fees to
the court, and is therefore, one of the exceptions. It would be prudent to note this on the
receipt.

Section 19 of By-Law 9 requires all cash receipts to be recorded in a duplicate cash

receipts book.

Section 18(1) and (5) of By-Law 9 require the method of receipt be recorded for all trust
and general receipts.

Section 7(1) of By-Law 9 requires trust receipts be deposited immediately.

Section 18(9) of By-Law 9 requires that the bearer bonds be recorded in the firm's
Valuable Property Record.

The petty cash box may not be an appropriate place to store valuable property, even
temporarily.

Section 4(1):
A licensee shall not receive or accept from a person, in respect of any one client file, cash in an
aggregate amount of 7,500 or more Canadian dollars.
Section 7:
(1) Subject to section 8, every licensee who receives money in trust for a client shall immediately
pay the money into an account at a chartered bank, provincial savings office, credit union or a league
to which the Credit Unions and Caisses Populaires Act, 1994 applies or registered trust corporation,
to be kept in the name of the licensee, or in the name of the firm of licensees of which the licensee is
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a partner, through which the licensee practises law or provides legal services or by which the licensee
is employed, and designated as a trust account.

Section 18:
Every licensee shall maintain financial records to record all money and other property received and
disbursed in connection with the licensees professional business, and, as a minimum requirement,
every licensee shall maintain, in accordance with sections 21, 22 and 23, the following records:
1) A book of original entry identifying each date on which money is received in trust for a client, the
method by which money is received, the person from whom money is received, the amount of money
received, the purpose for which money is received and the client for whom money is received in
trust.
5) A book of original entry showing all money received, other than money received in trust for a
client, and identifying each date on which money is received, the method by which money is
received, the amount of money which is received and the person from whom money is received.
9) A record showing all property, other than money, held in trust for clients, and describing each
property and identifying the date on which the licensee took possession of each property, the person
who had possession of each property immediately before the licensee took possession of the property,
the value of each property, the client for whom each property is held in trust, the date on which
possession of each property is given away and the person to whom possession of each property is
given.
Section 19:
(1) Every licensee who receives cash shall maintain financial records in addition to those
required under section 18 and, as a minimum additional requirement, shall maintain, in
accordance with sections 21, 22 and 23, a book of duplicate receipts, with each receipt
identifying the date on which cash is received, the person from whom cash is received, the
amount of cash received, the client for whom cash is received and any file number in respect
of which cash is received and containing the signature of the licensee or the person
authorized by the licensee to receive cash and of the person from whom cash is received.
(2) A licensee does not breach subsection (1) if a receipt does not contain the signature of the
person from whom cash is received provided that the licensee has made reasonable efforts to
obtain the signature of the person from whom cash is received.

Chris works part-time for Jack & Jill Lawyers. He runs his own bookkeeping business, "Legal
Bookkeeping Services," from his home. He keeps all of the firm's accounting records at his home
for his convenience. He takes great pride in his work and likes the books he prepares to look
perfect. Chris prepares the trust and general account records using pencil. In fact, he makes all
his entries in pencil until he reconciles with the bank statements. Because Chris has so many
lawyer clients, he only has time to reconcile Jill's trust and general accounts every two or three
months. Once the bank accounts are reconciled, Chris shreds the deposit slips, cashed cheques
and client trust lists because he is running out of storage room.

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Question 3 of 3
What practice management and professional responsibility issues arise from this scenario?

Section 21(1) of By-Law 9 does not allow the firms accounting records to be maintained
in pencil records must be in ink. If Chris prefers to prepare the monthly trust
reconciliations and comparisons in pencil until he is satisfied they are correct, he can do
so and then photocopy the final version to comply with the By-Law requirements.

Section 22(1) of By-Law 9 requires Jack and Jill to ensure their accounting records are
current at all times. Accounting records should be completed daily.

Section 22(2) of By-Law 9 requires that the monthly trust comparisons be completed by
the 25th day after each month end. The By-Law is silent about the general account
reconciliation, so general account reconciliations are not a requirement of the Law
Society (although it is prudent to prepare them).

Section 23(2) of By-Law 9 requires licensees to keep all trust and general banking records:
cashed cheques, detailed duplicate deposit slips, bank statements, pass books, GICs, term
deposits, etc., for ten (10) full fiscal years.
Rule 2.03 requires Jack to keep all his clients information confidential. He would be prudent to
arrange to have Chris attend at his law office to work on the financial records for his practice and
always have his financial records under his control.
Section 21:
(1) The financial records required to be maintained under sections 18, 19 and 20 may be entered
and posted by hand or by mechanical or electronic means, but if the records are entered and
posted by hand, they shall be entered and posted in ink.
Section 22:
(1) Subject to subsection (2), the financial records required to be maintained under sections 18,
19 and 20 shall be entered and posted so as to be current at all times.
(2) The record required under paragraph 8 of section 18 and the record required under paragraph
3 of section 20 shall be created within twenty-five days after the last day of the month in respect
of which the record is being created.
Section 23:
(1) Subject to subsection (2), a licensee shall keep the financial records required to be maintained
under sections 18 and 19 for at least the six year period immediately preceding the licensees most
recent fiscal year end.

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(2) A licensee shall keep the financial records required to be maintained under paragraphs 1, 2, 3,
8, 9, 10 and 11 of section 18 for at least the ten year period immediately preceding the licensees
most recent fiscal year end.

B. Trust Accounting Case Study 2

Mike, who is buying a house, retains Jill to act for him on the purchase. Prior to the closing on
April 15, Jill calls Mike to set up an appointment to attend at Jack & Jill Lawyers to sign
documents and asks him to bring with him a certified cheque for the balance due on closing and
a cheque to cover Jills fees and disbursements on the file. Mike forgot to budget for the land
transfer tax, so his sister Michelle agrees to lend him $5,000 through her RRSP. To satisfy her
financial institution, the RRSP loan must be secured by a mortgage. Mike discusses the
arrangements with Jill and asks if she will prepare the mortgage for Michelle.
Question 1 of 4
Identify the professional responsibility and practice management issues.
[Answer]:

Jill must consult the Rules of Professional Conduct to determine whether she is permitted
to act for both Mike and Michelle on the mortgage transaction. A loan through an RRSP
is a loan from the plan-holder, not the financial institution that holds the funds as a bare
trustee. Refer to subrule 2.04(11). In this transaction, as the loan does not exceed $50,000
and the borrower and lender are not at arm's length, exceptions (d) and (e) of subrule 2.04
(12) both apply and Jill can act for Mike and Michelle.

Jill must obtain written consent from both Mike and Michelle before accepting a retainer
to act for Michelle. Jill must also ensure she complies with the requirements of subrule
2.04(6), (7) and (8).

If Jill decides not to accept a retainer from Michelle on the mortgage transaction, she
should treat Michelle as an unrepresented party and comply with subrule 2.04(14).

Jill must consult By-Law 9 (see section 24) to determine what documents she must
maintain in Mikes mortgage file.

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Pursuant to section 24(2) of By-Law 9 Jill does not have to complete an investment
authority (Form 9D) nor a Report on the Investment (Form 9E) for this mortgage
transaction because exceptions (b) where the lender and borrower are not at arms length
and (e) where the total amount advanced by the lender does not exceed $6000 apply.

Rule 2.04:
(6) Except as provided in subrule (8.2), where a lawyer accepts employment from more than one
client in a matter or transaction, the lawyer shall advise the clients that
(a) the lawyer has been asked to act for both or all of them,
(b) no information received in connection with the matter from one can be treated as confidential so
far as any of the others are concerned, and
(c) if a conflict develops that cannot be resolved, the lawyer cannot continue to act for both or all of
them and may have to withdraw completely.
(7) Except as provided in subrule (8.2), where a lawyer has a continuing relationship with a client for
whom the lawyer acts regularly, before the lawyer accepts joint employment for that client and
another client in a matter or transaction, the lawyer shall advise the other client of the continuing
relationship and recommend that the client obtain independent legal advice about the joint retainer.
(8) Except as provided in subrule (8.2), where a lawyer has advised the clients as provided under
subrules (6) and (7) and the parties are content that the lawyer act, the lawyer shall obtain their
consent.

(11) Subject to subrule (12), a lawyer or two or more lawyers practising in partnership or association
shall not act for or otherwise represent both lender and borrower in a mortgage or loan transaction.
(12) Provided that there is no violation of this rule, a lawyer may act for or otherwise represent both
lender and borrower in a mortgage or loan transaction if:
(a) the lawyer practises in a remote location where there are no other lawyers that either party
could conveniently retain for the mortgage or loan transaction,
(b) the lender is selling real property to the borrower and the mortgage represents part of the
purchase price,
(c) the lender is a bank, trust company, insurance company, credit union or finance company that
lends money in the ordinary course of its business,
(d) the consideration for the mortgage or loan does not exceed $50,000, or
(e) the lender and borrower are not at arms length as defined in the Income Tax Act (Canada).
(14) When a lawyer is dealing on a clients behalf with an unrepresented person, the lawyer shall :
(a) urge the unrepresented person to obtain independent legal representation,
(b) take care to see that the unrepresented person is not proceeding under the impression that his
or her interests will be protected by the lawyer, and
(c) make clear to the unrepresented person that the lawyer is acting exclusively in the interests of
the client and accordingly his or her comments may be partisan.
By-Law 9:
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24. (1) Every licensee who acts for or receives money from a lender shall, in addition to maintaining
the financial records required under sections 18 and 20, maintain a file for each charge, containing,
(a) a completed investment authority, signed by each lender before the first advance of money
to or on behalf of the borrower;
(b) a copy of a completed report on the investment;
(c) if the charge is not held in the name of all the lenders, an original declaration of trust;
(d) a copy of the registered charge; and
(e) any supporting documents supplied by the lender.
(2) Clauses (1) (a) and (b) do not apply with respect to a lender if,
(a) the lender,
i) is a bank listed in Schedule I or II to the Bank Act (Canada), a licensed insurer, a
registered loan or trust corporation, a subsidiary of any of them, a pension fund, or
any other entity that lends money in the ordinary course of its business,
ii) has entered a loan agreement with the borrower and has signed a written
commitment setting out the terms of the prospective charge, and
iii) has given the licensee a copy of the written commitment before the advance of
money to or on behalf of the borrower;
(b) the lender and borrower are not at arms length;
(c) the borrower is an employee of the lender or of a corporate entity related to the lender;
(d) the lender has executed the Investor/Lender Disclosure Statement for Brokered Transactions,
approved by the Superintendent under subsection 54 (1) of the Mortgage Brokerages,
Lenders and Administrators Act, 2006, and has given the licensee written instructions,
relating to the particular transaction, to accept the executed disclosure statement as proof of
the loan agreement;
(e) the total amount advanced by the lender does not exceed $6,000; or
(f) the lender is selling real property to the borrower and the charge represents part of the
purchase price.

After her meeting with Mike, Jill deposits Mike's certified and uncertified cheques at an
automated banking machine (ABM) on her way home. Jill uses the firm's general account for her
electronic registration bank account (ERBA) to authorize payment of the registration fee and
land transfer tax to Teranet. When Jill arrives at the office on April 15, she instructs the
receptionist to transfer the registration fees and land transfer tax required for Mike's purchase
from the trust account to the general account using Internet banking so the funds will be ready
for the registration that afternoon.
Question 2 of 4
What practice management and professional responsibility issues arise from this scenario?
[Answer]

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Jill should be cautious about depositing certified funds or cash in an ABM since most
bank agreements impose responsibility for these funds on the depositor until during
processing and clearance periods.

Jill should either retain the ABM receipt and attach it to the detailed duplicate deposit slip
in place of the teller stamp, or include the details of the transaction, including the source
of the funds and the client reference on the ABM receipt and keep it with her detailed
duplicate deposit slips.

Jill cannot transfer electronic registration funds to her general ERBA until after she has
completed the registration. Since Jill has opted to use the firms general account for her
ERBA, she cannot reimburse her firm from funds held in trust for Mike for the payment
of registration fees and land transfer tax on his purchase until she has completed the
registration and authorized Teranet to withdraw the funds from the general account.
(Section 9(1)2 of By-Law 9.)

Disbursement of trust funds by internet banking must follow the procedure in section 12
of By Law 9.

By-Law 9:
Section 9:
(1) A licensee may withdraw from a trust account only the following money:
1. Money properly required for payment to a client or to a person on behalf of a client.
2. Money required to reimburse the licensee for money properly expended on behalf of a client
or for expenses properly incurred on behalf of a client.
3. Money properly required for or toward payment of fees for services performed by the
licensee for which a billing has been delivered.
4. Money that is directly transferred into another trust account and held on behalf of a client.
5. Money that under this Part should not have been paid into a trust account but was through
inadvertence paid into a trust account.
(2) A licensee may withdraw from a trust account money other than the money mentioned in
subsection (1) if he or she has been authorized to do so by the Society.
Section 12:
(1) Money withdrawn from a trust account by electronic transfer shall be withdrawn only in
accordance with this section.
(2) Money shall not be withdrawn from a trust account by electronic transfer unless the following
conditions are met:
1. The electronic transfer system used by the licensee must be one that does not permit an
electronic transfer of funds unless,
i) one person, using a password or access code, enters into the system the data
describing the details of the transfer, and
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ii) ii. another person, using another password or access code, enters into the system
the data authorizing the financial institution to carry out the transfer.
2. The electronic transfer system used by the licensee must be one that will produce, not later
than the close of the banking day immediately after the day on which the electronic transfer
of funds is authorized, a confirmation from the financial institution confirming that the data
describing the details of the transfer and authorizing the financial institution to carry out the
transfer were received.
3. The confirmation required by paragraph 2 must contain,
i) the number of the trust account from which money is drawn,
ii) the name, branch name and address of the financial institution where the account
to which money is transferred is kept,
i) iii. the name of the person or entity in whose name the account to which money is
transferred is kept,
ii) the number of the account to which money is transferred,
iii) the time and date that the data describing the details of the transfer and authorizing
the financial institution to carry out the transfer are received by the financial
institution, and
iv) the time and date that the confirmation from the financial institution is sent to the
licensee.
4. Before any data describing the details of the transfer or authorizing the financial institution to
carry out the transfer is entered into the electronic trust transfer system, an electronic trust
transfer requisition must be signed by,
i) a licensee, or
ii) ii. in exceptional circumstances, a person who is not a licensee if the person has
signing authority on the trust account from which the money will be drawn and is
bonded in an amount at least equal to the maximum balance on deposit during the
immediately preceding fiscal year of the licensee in all trust accounts on which
signing authority has been delegated to the person.
5. The data entered into the electronic trust transfer system describing the details of the transfer
and authorizing the financial institution to carry out the transfer must be as specified in the
electronic trust transfer requisition.
Application of para. 1 of subs. (2) to sole practitioner
(3) Paragraph 1 of subsection (2) does not apply to a licensee who practises law or provides legal
services without another licensee as a partner, if the licensee practises law or provides legal services
through a professional corporation, without another licensee practising law or providing legal
services through the professional corporation and without another licensee or person as an employee,
if the licensee himself or herself enters into the electronic trust transfer system both the data
describing the details of the transfer and the data authorizing the financial institution to carry out the
transfer.
Same
(4) In exceptional circumstances, the data referred to in subsection (3) may be entered by a person
other than the licensee, if the person has signing authority on the trust account from which the money
will be drawn and is bonded in an amount at least equal to the maximum balance on deposit during
the immediately preceding fiscal year of the licensee in all trust accounts on which signing authority
has been delegated to the person.

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At the end of April, Jill mails her report and bill to Mike for his purchase and mortgage and then
signs a trust cheque to transfer the fees and disbursements to the firm's general account. At the
beginning of May, Jill reviews the firm's trust bank statement on line and notices that Mike's
cheque for her fees and disbursements was returned "Not Sufficient Funds." Jill calls Mike right
away, but his message says he is away on vacation for two more weeks.
Question 3 of 4
Identify the professional responsibility and practice management issues.
[Answer]

Jill has followed the correct procedure in By-Law 9 by completing the legal services
requested by Mike, sending her report and bill promptly to Mike, then transferring her
fees and disbursements from the trust to the general account. (See By-Law 9, 9(1)2. and
9(1)3.)

By-Law 9 requires firm members to always have enough funds in the trust account to
meet all client obligations. By transferring trust funds that are later returned NSF, Jill has,
in effect, used other clients trust funds for her client Mike's benefit. Since Mike is not
available to correct the shortage immediately, Jill must transfer the fees and
disbursements back to the trust account immediately to make up the shortage.

Whether or not Jack and Jill Lawyers transfers funds by Internet banking, on line viewing
of the firm's trust activity is a useful way of monitoring the trust activity day-by-day and
catching errors and fraudulent transactions quickly.

Section 9:
(1) A licensee may withdraw from a trust account only the following money:
1. Money properly required for payment to a client or to a person on behalf of a client.
2. Money required to reimburse the licensee for money properly expended on behalf of a client
or for expenses properly incurred on behalf of a client.
3. Money properly required for or toward payment of fees for services performed by the
licensee for which a billing has been delivered.
4. Money that is directly transferred into another trust account and held on behalf of a client.
5. Money that under this Part should not have been paid into a trust account but was through
inadvertence paid into a trust account.

Jill does not see the need to have a trust ledger account for each of her clients. For minor matters,
she has instructed Chris to record payments to one miscellaneous trust ledger account. Chris has
also set up a client trust ledger account called "Bank Errors" to record $25 of the firm's money in
the trust account to cover service charges the bank sometimes debits to the trust account. Jill now

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has a trust ledger account in her own name where fees billed are deposited into trust until she
needs to use them.
Question 4 of 4
What professional responsibility issues and practice management issues arise from these
circumstances?
[Answer]:

Section 18(3) of By-Law 9 requires Jill to record all client trust funds in the name of the
client for whom she is holding the money. Her client trust ledger must show the receipts,
disbursements and unexpended balances separately for each client. She is not permitted
to have a miscellaneous client trust ledger account.

Section 8(2)(1) of By-Law 9 prohibits Jill from maintaining a $25 "float" of her own
money in the trust account to cover bank errors or service charges. Jill must ensure that
any service charges for the trust account are withdrawn from the general account, and if
her bank debits service charges to her trust account she must either have her bank correct
them promptly or deposit her own funds in the trust account in the exact amount to
correct them.

subsection 8(2) of By-Law 9 prohibits Jill from depositing her own funds, including
payments for her billed fees and disbursements, into the firm trust account.

Section 18:
18. Every licensee shall maintain financial records to record all money and other property received
and disbursed in connection with the licensees professional business, and, as a minimum
requirement, every licensee shall maintain, in accordance with sections 21, 22 and 23, the following
records:
3. A clients trust ledger showing separately for each client for whom money is received in
trust all money received and disbursed and any unexpended balance.
4. A record showing all transfers of money between clients trust ledger accounts and
explaining the purpose for which each transfer is made.
Section 8:
(1) A licensee is not required to pay into a trust account money which he or she receives in trust for a
client if,
(a) the client requests the licensee in writing not to pay the money into a trust account;
(b) the licensee pays the money into an account to be kept in the name of the client, a person
named by the client or an agent of the client; or
(c) the licensee pays the money immediately upon receiving it to the client or to a person on
behalf of the client in accordance with ordinary business practices.
(2) A licensee shall not pay into a trust account the following money:
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1. Money that belongs entirely to the licensee or to another licensee of the firm of licensees of
which the licensee is a partner, through which the licensee practises law or provides legal
services or by which the licensee is employed, including an amount received as a general
retainer for which the licensee is not required either to account or to provide services.
2. Money that is received by the licensee as payment of fees for services for which a billing has
been delivered, as payment of fees for services already performed for which a billing will be
delivered immediately after the money is received or as reimbursement for disbursements
made or expenses incurred by the licensee on behalf of a client.

C. Trust Accounting Case Study 3

Jack is so busy with his practice that he takes several months to report to his clients. For
litigation files, he encloses a billing that shows only the grand total of the fees, disbursements
and HST with the reporting letter he sends out long after the matter is settled. On the day the
matter is settled, Jack instructs the bookkeeper to transfer the fees and disbursements held in the
trust account to the general account. On matrimonial files, Jack calculates his fee when he opens
the file, and he transfers a portion of his estimated fee to the general account every two months.
He prepares the fee bill when the matrimonial matter is finalized. Jack includes on his fee bills
the statement: "Pursuant to the Solicitors Act, interest is chargeable at the prime rate on unpaid
accounts, commencing 30 days from the date the account is rendered."
What professional responsibility issues and practice management issues arise from these
circumstances?
[Answer]:

Jack is prohibited from taking his fees in advance by section 9(1)(3) of By-Law 9. Jack
must send a fee bill to his client before he can transfer his fees from his trust account to
his general account.

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Subsection 9(1)(2) of By-Law 9, however, allows Jack to reimburse his firm for
disbursements he has paid or incurred on behalf of his clients without first sending a fee
bill.

Subrule 2.08(1) of the Rule requires Jack to charge fair and reasonable fees and
disbursements that have been disclosed to the client.

Subrule 2.08(4) of the Rules requires Jack to provide a statement of account that
separately details his fees and disbursements.

Subrule 2.01(1)(d) of the Rules requires Jack to communicate with his client in a timely
and effective manner at all stages of the clients matter. This includes the end of the
matter and his final reporting letter.

Subsection 33 of the Solicitors Act R.S.O. 1990, c. S.15 permits a solicitor to charge
interest on fee bills commencing one month after the bill is delivered, but the interest rate
cannot be more than the prejudgment interest rate as of the day the fee bill is delivered,
and the interest rate must be shown on the fee bill.

Section 9:
(1) A licensee may withdraw from a trust account only the following money:
1. Money properly required for payment to a client or to a person on behalf of a client.
2. Money required to reimburse the licensee for money properly expended on behalf of
a client or for expenses properly incurred on behalf of a client.
3. Money properly required for or toward payment of fees for services performed by the
licensee for which a billing has been delivered.
4. Money that is directly transferred into another trust account and held on behalf of a
client.
5. Money that under this Part should not have been paid into a trust account but was
through inadvertence paid into a trust account.
Rule 2.01:
competent lawyer means a lawyer who has and applies relevant skills, attributes, and values in a
manner appropriate to each matter undertaken on behalf of a client including:
(d) communicating at all stages of a matter in a timely and effective manner that is
appropriate to the age and abilities of the client
Rule 2.08:
(1) A lawyer shall not charge or accept any amount for a fee or disbursement unless it is fair and
reasonable and has been disclosed in a timely fashion.
(4) In a statement of an account delivered to a client, a lawyer shall clearly and separately detail the
amounts charged as fees and as disbursements.

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Solicitors Act, Section 33:

Interest on unpaid accounts
33. (1) A solicitor may charge interest on unpaid fees, charges or disbursements, calculated
from a date that is one month after the bill is delivered under section 2. R.S.O. 1990, c. S.15,
s. 33 (1).
Interest on overpayment of accounts
(2) Where, on an assessment of a solicitors bill of fees, charges and disbursements, it appears
that the client has overpaid the solicitor, the client is entitled to interest on the overpayment
calculated from the date when the overpayment was made. R.S.O. 1990, c. S.15, s. 33 (2).
Rate to be shown
(3) The rate of interest applicable to a bill shall be shown on the bill delivered. 2009, c. 33,
Sched. 2, s. 70.
Disallowance, variation on assessment
(4) On the assessment of a solicitors bill, if the assessment officer considers it just in the
circumstances, the assessment officer may, in respect of the whole or any part of the amount
allowed on the assessment,
(a) disallow interest; or
(b) vary the applicable rate of interest. 2009, c. 33, Sched. 2, s. 70.
Regulations
(5) The Lieutenant Governor in Council may make regulations establishing a maximum rate of
interest that may be charged under subsection (1) or (2) or that may be fixed under clause (4) (b).
2009, c. 33, Sched. 2, s. 70.

Jack was the lucky winner of an all-inclusive trip to Bermuda for a week. The day before he left,
his assistant Kim reminded Jack that he had to file a Notice of Appeal during the week he would
be away. He decided that Kim was capable of preparing and filing the Notice of Appeal in his
absence. To enable Kim to pay for the transcript and filing costs, Jack gave his bank instructions
to add Kim as a signing authority on all of his bank accounts. In addition, he left Kim with a few
signed blank trust cheques "just in case."

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Question 2 of 3
Identify the professional responsibility and practice management issues.
[Answer]:

Paragraph 4(2)(g) of By-Law 7.1 requires Jack to directly supervise Kim with respect to
filing the Notice of Appeal.

Subsection 11(b) of By-Law 9 prohibits non- licensees from signing trust cheques except
in exceptional circumstances.

Subsection 11(a) of By-Law 9 prohibits Jack from issuing trust cheques payable to cash
or bearer. By extension, blank trust cheques should never be signed. Jack has effectively
given control over his clients' trust funds to Kim, a non-lawyer. He has breached his
fiduciary obligation as a trustee.

Jack should consider making arrangements with another lawyer, licensed to practice and
not bankrupt, to sign the trust account in Jack's absence. Kim could be added as a cosignor.

Jack can have Kim sign on his general account, but he would be prudent to arrange for a
set maximum amount for internal control purposes.

By-law 7.1:
Section4:
(1) A licensee shall assume complete professional responsibility for her or his practice of law or
provision of legal services in relation to the affairs of the licensees clients and shall directly
supervise any non-licensee to whom are assigned particular tasks and functions in connection
with the licensees practice of law or provision of legal services in relation to the affairs of
each client.
(2) Without limiting the generality of subsection (1),
(a) the licensee shall not permit a non-licensee to accept a client on the licensees behalf;
(b) the licensee shall maintain a direct relationship with each client throughout the
licensees retainer;
(c) the licensee shall assign to a non-licensee only tasks and functions that the non-licensee
is competent to perform;
(d) the licensee shall ensure that a non-licensee does not act without the licensees
instruction;
(e) the licensee shall review a non-licensees performance of the tasks and functions
assigned to her or him at frequent intervals;
(f) the licensee shall ensure that the tasks and functions assigned to a non-licensee are
performed properly and in a timely manner;
(g) the licensee shall assume responsibility for all tasks and functions performed by a nonlicensee, including all documents prepared by the non-licensee; and
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(h) the licensee shall ensure that a non-licensee does not, at any time, act finally in respect
of the affairs of the licensees client.
By-law 9:
Section 11:
A cheque drawn on a trust account shall not be,
(a) made payable either to cash or to bearer; or
(b) signed by a person who is not a licensee except in exceptional circumstances and
except when the person has signing authority on the trust account on which a cheque will
be drawn and is bonded in an amount at least equal to the maximum balance on deposit
during the immediately preceding fiscal year of the licensee in all the trust accounts on
which signing authority has been delegated to the person.

When clients come to Jack on minor matters, they bring him a cheque for the flat fee he quoted
them. Jack immediately deposits the cheque into his general account. He keeps his financial
records on his computer and does not print out any reports. Jack gets a call from a Law Society
auditor who asks him to have his financial records ready for a spot audit. Due to a recent
computer software upgrade, Jack is unable to print out all the records requested by the auditor.
Question 3 of 3
Identify the professional responsibility and practice management issues.
[Answers]

Subsections 7(2)(d) and (e) of By-Law 9 define retainers for future fees and
disbursements as trust money.

Subsection 7(1) of By-Law 9 requires Jack to deposit trust money in a trust account.

Subsection 21(1) of By-Law 9 permits Jack to keep his financial records electronically.

Subsection 21(2) of By-Law 9 requires Jack to be able to produce paper copies of his
financial records promptly at the Law Society's request.

Subsection 22(2) of By-Law 9 requires Jack to keep certain financial records for 10 full
fiscal years.

Subsection 22(1) of By-Law 9 requires Jack to keep the financial records not listed in
subsection 22(2) for 6 full fiscal years.

Section 7:
Money received in trust for client
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7. (1) Subject to section 8, every licensee who receives money in trust for a client shall immediately
pay the money into an account at a chartered bank, provincial savings office, credit union or a league
to which the Credit Unions and Caisses Populaires Act, 1994 applies or registered trust corporation,
to be kept in the name of the licensee, or in the name of the firm of licensees of which the licensee is
a partner, through which the licensee practises law or provides legal services or by which the licensee
is employed, and designated as a trust account.
(2) For the purposes of subsection (1), a licensee receives money in trust for a client if the licensee
receives from a person,
(a) money that belongs in whole or in part to a client;
(b) money that is to be held on behalf of a client;
(c) money that is to be held on a client=s direction or order;
(d) money that is advanced to the licensee on account of fees for services not yet
rendered; or
(e) money that is advanced to the licensee on account of disbursements not yet made.
Section 21:
Financial records to be permanent
21. (1) The financial records required to be maintained under sections 18, 19 and 20 may be entered
and posted by hand or by mechanical or electronic means, but if the records are entered and posted
by hand, they shall be entered and posted in ink.
Exceptions
(2) The record required under paragraph 8 of section 18 and the record required under paragraph 3 of
section 20 shall be created within twenty-five days after the last day of the month in respect of which
the record is being created.
Section 22:
Financial records to be current
22. (1) Subject to subsection (2), the financial records required to be maintained under sections 18,
19 and 20 shall be entered and posted so as to be current at all times.
Exceptions
(2) The record required under paragraph 8 of section 18 and the record required under paragraph 3 of
section 20 shall be created within twenty-five days after the last day of the month in respect of which
the record is being created.

D. Recording Keeping Requirements

According to section 23(2) of By-Law 9, certain financial records must be kept for at least ten
full fiscal years. Section 23(1) of By-Law 9 lists the financial records that must be maintained
for six full fiscal years.
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Review the following list of records and identify which records must be kept for ten full fiscal
years and which records must be kept for six full fiscal years.
Trust Receipts Journal
General Receipts Journal
Trust Disbursements Journal
General Disbursements Journal
Client Trust Ledger
Valuable Property Record
Duplicate Deposit Slips
Fees Journal
Bank Statements
Monthly Trust Comparisons
Electronic Trust Transfer Requisitions

23. (1) Subject to subsection (2), a licensee shall keep the financial records required to be maintained
under sections 18 and 19 for at least the six year period immediately preceding the licensees most
recent fiscal year end.
Same
(2) A licensee shall keep the financial records required to be maintained under paragraphs 1, 2, 3, 8,
9, 10 and 11 of section 18 for at least the ten year period immediately preceding the licensees most
recent fiscal year end.

[Answer]:
According to section 23(2) of By-Law 9, the following records must be kept for at least ten full
fiscal years:

Trust Receipts Journal - section 18(1),

Trust Disbursements Journal - section 18(2),

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Client Trust Ledger - section 18(3),

Monthly Trust Comparisons, including supporting trust bank reconciliations and client
trust lists - section 18(8),

Valuable Property Record - section 18(9),

Bank statements or pass books, cashed cheques, and detailed duplicate deposit slips for
all trust and general accounts - section 18(10),

Signed electronic trust transfer requisitions and signed printed confirmations of electronic
transfers of trust funds - section 18(11).

Section 23(1) of By-Law 9 requires that the remaining records be maintained for six full fiscal
years. These records would include your :

General Receipts Journal - section 18(5),

General Disbursements Journal - section 18(6),

Fees Journal or chronological file of copies of billings - section 18(7).

Members should also consider the relevant sections of the Income Tax Act, which may impose
further requirements.

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Marketing Your Services

A. Marketing Your Practice

Marketing Your Practice

Marketing is a means to publicize your law practice to attract and obtain the clients you want
so that you may provide them the services you offer. You will also need to complete market
research to assess the viability of your business in the market you have chosen to serve. This
information is especially important if you will be applying for financing from the bank. You will
also need to devise a budget to implement your marketing plan.
To develop an effective marketing plan you should first identify your target client, and the
services you wish to offer. Your marketing plan should be tailored to your practice and should
allow you to gain exposure to your target market at the start and throughout the evolution of your
business. You should monitor your activities with respect to meeting the goals and budget of the
marketing plan to determine what methods have worked well, and those that need to be changed
or replaced.

Checklist

Consider obtaining business cards as a first step, which can be used while you devise your
marketing plan.

Consider the available means to market your practice to your target client:

enrollment in a lawyer or legal services referral service

advertising in a directory, on the internet, in print or other media

direct marketing via pamphlets, leaflets, mail, fax or e-mail

networking by participation in civic or community events, local business or trade fairs, or

speaking engagements (Networking is discussed further in that section of the Guide)

Evaluate the goals you would like to achieve with your marketing strategy both at the start of
your practice and as it evolves (e.g. an initial goal may be to build your client base to a certain
level, with subsequent goals to increase that client base or narrow it).

Of the services you offer, determine which you would like to market or advertise.

164

Consider the suitability of marketing methods available to your practice and services and whether
they will reach and attract your target market (e.g. advertising in print, by television or radio,
website, e-mail, etc.).

Consider your comfort level when evaluating what marketing methods will work best for you and
your practice (e.g. including a personal photograph in ones advertising may not be for everyone).

Consider outsourcing parts or all of your marketing efforts if you do not have the skill or
knowledge to implement these yourself (e.g. designing a web page may be beyond your own
capabilities).

Prepare a budget for the cost of using various marketing methods.

Determine what benchmarks you will use to measure whether your marketing plan is succeeding
(e.g. number of clients, income generated, referrals generated, recognition of your practice, etc.).

Include a timeframe to measure progress against those benchmarks.

Ensure that the methods chosen comply with the Rules of Professional Conduct [Rule 3.01
Making Legal Services Available, Rule 3.02 Marketing, Rule 3.03 Advertising Nature of
Practice].

Prepare a marketing plan that includes a description of

the type of client who will likely use your services

the potential size of the target market in your geographical area

your direct and indirect competition, if any

the major trends presently affecting your marketplace

what makes your services unique (i.e., reasons why clients would choose your services
over those of your competition)

your pricing strategy (e.g. type of fees you will charge, methods of payment you will
accept, discounts you may offer for volume or certain clients, value billings, accepting
Legal Aid clients)

how you will offer your services

how you will communicate and promote your services to your target market (e.g.
brochures, websites, advertising, etc.)

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Using Law Office Technology

A. 10 Essential Technology Skills and Practices
10 Essential Technology Skills and Practices
Technology has become an essential part of practising law and workign in a law office. This
column summarizes 10 essential technology skills and practices with which every lawyer and
law office staff person should be familiar.

1. Learn keyboard shortcuts

Odds are your hands are on the keyboard most of the time. Taking them off to reach for the
mouse just breaks your rhythm and slows you down. With keyboard shortcuts you can do almost
everything you can do with a mouse - the key is learning the shortcuts for the various programs
you use.
Basic Windows and document editing shortcuts are described below. Take time to learn the
shortcuts for the most common tasks you complete in the programs you most frequently use. You
will be able to complete things much faster.

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To learn and use keyboard shortcuts you should be familiar with the syntax for describing them.
Simply remember that a plus sign (+) between two or more keys means that you press those
keys, in the order they are listed, almost simultaneously, moving from left to right. For example,
a capital B would be described as Shift+B. You release them in the opposite order.

2. Alt+Tab for switching between programs

Switching between programs is one of the most frequent things we all do as we work on our
computers. For this task most of us use a mouse to select a button on the task bar. There is a
much faster way.
Pressing Alt+Tab will open a rectangular grey pop-up window in the centre of your screen. It
will have an icon for each program that is running on your computer. Hold down the Alt key, and
repeatedly press Tab to jump from one icon to the next. To help you find the window you want,
the text from the title bar of each window appears in a box at the bottom of the pop-ups. Simply
release both keys when you get to the window you want.
In this pop-up window, the icons are presented from left to right, in order you last looked at their
respective windows. This means that the window you were in previous to the current one is just
one Alt+Tab away. This lets you jump back and forth between two programs in the blink of an
eye.

3. Switching between documents

On occasion you will want to jump from one document to another within a single program. For
example switching between two or more letters within Word. Use Ctrl+F6 to do this. Hold down
the Ctrl key, and repeatedly hit F6. Again, release both keys when you get to the document you
want. This shortcut works on many, but not all, Windows programs.

4. Jumping text shortcuts

Even the most experienced computer users often take the long road when it comes to editing text
and moving around a document. They're either clicking away like crazy with the mouse, or using
the arrow keys to move the cursor around a document, one character or line at a time. With a few
simple shortcuts you can move around a document much more quickly.
When editing a document, the following shortcuts help you jump a whole word or even a whole
paragraph, with a single press of an arrow key.

Ctrl+Right Arrow will jump the cursor forward a whold word at a time;

Ctrl+Left Arrow will jump the cursor backwards a whole word at a time;

Ctrl+Down Arrow will jump you down a whole paragraph at a time;

Ctrl+Up Arrow will jump you up a whole paragraph at a time.

If you want to select or block a larger portion of text, add the shift key to the above
combinations:
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Ctrl+Shift+Right Arrow will jump the cursor forward a whole word and select the text at the
same time;

Ctrl+Shift+Left Arrow will jump the cursor backwards a whole word and select the text at the
same time;

Ctrl+Shift+Down Arrow will jump you down a whole paragraph and select the text at the same
time;

Ctrl+Shift+ Up Arrow will jump you up a whole paragraph and select the text at the same time.

After blocking the words, sentences or paragraphs you wanted to select, you can copy, move, or
reformat as you wish.

5. Cut, copy and past

Why retype things when you don't have to? The ability to transfer text or other data from one
program to another via cut, copy and paste is one of the most powerful features of Windows.
To move or copy text or other data (eg. a picture) you must first select or highlight it.
Next, To move the text, press Ctrl+X or Cut on the Standard toolbar (the button with the
scissors). To copy the text, press Ctrl+C or click the Copy button (two white sheets of paper).
The text you are moving or copying is now in the Windows Clipboard, a temporary holding area.
Now move your cursor and click where you want to place the text you are moving or copying.
This can be somewhere else in the source document, another document in the same application,
or even a completely different program.
To add or "paste" the text in the new location, press Ctrl+V or click the Paste button (a clipboard
with a sheet of paper). The text will appear in the new location.
If you want to clean up the format of pasted text, use Paste Special

6. Paste Special
Want to add text from a website or other source to an e-mail or Word or WordPerfect document
and not deal with formatting issues (i.e. just get the basic text with no formatting)? You can use
the Paste Special function to do this.
Highlight and "copy" the text you want to copy and paste. Next, place the cursor at the point you
want to add it to your document. But instead of clicking the "Paste" icon, click on "Edit", then
"Paste Special", and then select the "Unformatted" option. The text will adopt the format of the
receiving document and any formatting from the source document will be lost.

7. Text formatting shortcuts

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Few things are more finicky than typing case citations. With these three keyboard shortcuts case
typing citations will be a breeze:

Press Ctrl+B to turn Bold on/off

Press Ctrl+I to turn Italics on/off

Press Ctrl+U to turn underline on/off

Two things to note, you can use these shortcuts together, and they are all toggles, that is, pressing
the noted key combinations cycles between on and off.
If you want to type a case name in the middle of a sentence with bold and underline do the
following: When you get to the point the case name starts, simply press Ctrl+B, then Ctrl+I, then
type the case name. To turn bold and underlind off, press Ctrl+B and then Ctrl+I again, and
continue with the sentence.

8. Use A "right click" for format and configuration settings

There are many formatting and configuration settings buried away in various menus and dialog
boxes. They can be very hard to find. The "right click" button on your mouse comes to the rescue
and makes many of these settings available with a simple right mouse click.
These options and features are "context sensitive" - in other words, you will be presented with a
list of choices that are relevant to the item, field or text you are right clicking on. For example, in
Outlook, right clicking on an e-mail in your Inbox presents you with Open, Print, Reply, Reply
all, Forward etc. Right clicking on text in a Word document gives you access to font, text and
paragraph formatting settings
You can right click on almost everything on your desktop - try it!

9. Eliminate your biggest daily interruption: Banish the new e-mail pop-up
Many people are presented with a beep and the "new message" pop-up window every single time
a new e-mail message arrives in their Inbox. This is a huge interruption. Your train of thought
gets interrupted and you get bounced out of whatever you were working on.
To get more done, turn off that notification window! Go with just the beep if you have to. And, if
you don't need to know the instant when something arrives in your inbox (and most of the time
you don't), consider turning off the beep too. You're going to check your inbox reasonably
regularly anyway.

10. Poor docketing habits let time and money slip through your fingers
To make sure you capture all the time spent by lawyer and staff time keepers in your office,
everyone should do the following:
Directly enter their own dockets on their computer. This saves time and transcription errors by
eliminating the double-entry by another staff person.
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Docket work throughout the day. Trying to create dockets for work done earlier in the day (much
less in the more distant pass) is very time-consuming, and not likely to be very accurate or
complete. Some studies have indicated comtemporaneously recording time dockets capture 20
per cent more time.
Most time and billing programs have a timer feature to help track how much time you have spent
on any given task. It works just like a stopwatch. Most lawyers grossly underestimate the time
they spend on individual tasks. Try timing your own tasks; you will be shocked by how much
time you are missing. If you get interrupted while working on one task, pause or close the docket
for it, and create a new docket for the new task. Re-open the original docket when you return to
the task. At the end of the day, you should still review your dockets. Look for missed time, and
make any necessary corrections or additions while things are still fresh in your mind.
Created detailed dockets. For example, "telephone conference with client re details of weekend
access problems." Detailed dockets serve as a record of the work you did on a file, and for
communicating to the client what was done. Docket every minute spent on a file. Wait until you
final or interim bill the file, at which time you can properly judge all the factors that determine
what should be billed on the matter.
Make sure all the lawyers and staff in your office know, understand and use the above tips and
practices. They will help improve firm profitability by letting all technology users be more
efficient.

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