Following the launch of lawsuits against more than 150 lawyers by one of Canada’s largest law firms, many are suggesting that firms may have to reconsider the fashion in which they give independent legal advice.
Last month, Cassels Brock and Blackwell – a Toronto and Vancouver-based firm which boasts more than 200 lawyers – served 164 lawyers with notice of a lawsuit in the latest development of a complex class action case which revolves around legal negotiations that all of the lawyers were involved in to restructure General Motors’ Canadian operations in 2009, reports Canadian magazine Maclean’s.
According to the report, this type of legal in-fighting is virtually unheard of in Canada and it has caused several top lawyers to suggest that the way that law firms give independent legal advice in the country may be changed permanently.

Unusual move

Dimitri Lascaris, a partner in the class actions department at Ontario-based Siskinds (which is not involved in Cassels’ action), told Maclean’s: ‘It’s a highly unusual move. I’ve never heard of that before and I’ve been involved in many class actions and read hundreds of class action decisions.’
The GM case eventually saw Cassels – which had been instructed by GM in the event of bankruptcy proceedings – sued by dealerships that had been advised to close down, alleging a conflict of interest since the law firm never told the dealers it was also representing the Canadian government in its bailout negotiations with motor manufacturer.
The $750 million claim is one of the largest class actions ever filed against a Canadian law firm. However, Cassels contends that it never had a solicitor-client relationship with the dealers, claiming it had only been retained to represent them in case of a GM bankruptcy – which did not occur.
Cassel’s then launched a huge counterclaim against the dealers’ lawyers, stating that if it’s found liable for any damages through either a settlement or court judgment, the dealers’ lawyers should share the liability.

'Hasty retreat'

David Sterns, whose law firm, Sotos, represents the GM dealers in the class action suit said: ‘Cassels ...beat a hasty retreat and then told these [dealers] at the 11th hour they would have to go speak to their local lawyer and some of them had 24 hours to look at these agreements… If anyone was to go after these [lawyers], you’d think it would be their own clients. That’s pretty important because we know what happened and we know the situation those lawyers were placed in and the finger of blame in this case is pointing squarely at GM and Cassels.’
‘It’s very controversial,’ said an unnamed lawyer from a major Toronto firm that is being sued by Cassels. ‘It’s definitely going to have an impact on whether lawyers are prepared to give independent legal advice in situations like this claim, because obviously the lawyers who gave independent legal advice never imagined in a million years they’d get dragged into this action.’