Instructions Specific to This Exam

1. This examination contains five questions of unequal value, worth a total of 100 marks.

2. Suggested time allocations are provided for guidance only. Candidates remain responsible for managing their examination time.

3. You will be assessed primarily on your knowledge and application of the Federation of Law Societies of Canada’s Model Code of Professional Conduct, the relevant assigned cases and the other required course materials.

4. Merely identifying a Model Code provision or reproducing its wording will not attract significant credit. You must explain:

   • why the rule is engaged;

   • whose interests it protects;

   • how it applies to the particular facts;

   • what competing duties or considerations arise; and

   • what the lawyer should actually do.

5. No marks are awarded for merely summarizing the facts. Use the material facts as part of your legal analysis.

6. Each question is independent. Do not import facts from another question.

7. In dealing with confidentiality, distinguish the lawyer’s broad ethical duty of confidentiality from solicitor-client privilege. Do not assume that information is freely disclosable merely because it may not be privileged.

8. Where a lawyer acts for an organization, identify the organization itself as the client and distinguish its interests from those of its directors, officers, employees and shareholders.

9. Where organizational wrongdoing is involved, consider separately:

   • the prohibition against assisting dishonesty, fraud, crime or illegal conduct;

   • the lawyer’s obligations within the organization;

   • escalation to persons with greater authority;

   • confidentiality; and

   • withdrawal.

10. Where advocacy is involved, balance resolute representation of the client with the lawyer’s obligations of candour, fairness and integrity toward the tribunal and the administration of justice.

11. A lawyer may test the opposing party’s case and advance every lawful argument available to the client. This does not authorize:

• • presenting evidence the lawyer knows to be false;

  • misleading a tribunal;

  • assisting client dishonesty;

  • improperly influencing witnesses; or

  • abusing legal process.

12. In negotiation and dispute-resolution problems, distinguish:

• • legitimate bargaining;

  • confidentiality;

  • conflicts;

  • misleading statements;

  • impermissible threats;

  • and the distinct role of a lawyer acting as mediator rather than advocate.

13. In criminal practice questions, distinguish the lawyer’s obligation to defend the client resolutely from any suggestion that defence counsel may knowingly facilitate false evidence or improperly interfere with the criminal process.

14. Where competence, fees or access to justice is raised, consider the interests of the client and the public together with the lawyer’s professional independence and responsibility.

15. Full citations are unnecessary. Where relevant, identify the Model Code rule, case or assigned authority with sufficient precision.

16. Answers must be written in clear, organized, complete sentences.

QUESTION ONE

25 marks — suggested time: 45 minutes

FACTS

Northmere Respiratory Technologies Inc. (“Northmere”) manufactures portable respiratory devices used in hospitals and long-term care facilities.

Sabine Elward has been Northmere’s in-house lawyer for six years.

Her title is:

Vice-President, Legal and Corporate Affairs.

Northmere’s chief executive officer, Bastian Crowell, is not a lawyer.

Northmere has recently launched a new portable oxygen concentrator known as the AeroVive 4.

Three months after launch, Northmere’s engineering department discovered that a particular battery defect could cause the device to shut down unexpectedly.

The problem occurs only in unusual operating conditions.

No death has been reported.

Northmere has, however, received reports of:

• seven unexpected shutdowns;

• two patients requiring emergency transfer to another oxygen source; and

• one patient suffering temporary loss of consciousness.

Federal legislation requires manufacturers to report certain serious device incidents to the regulator within prescribed periods.

Northmere’s head of regulatory affairs, Darian Moss, sends Sabine an email stating:

“I think these incidents meet the statutory reporting threshold. Bastian wants a legal opinion before we report anything.”

Sabine reviews the statute and internal reports.

She concludes that at least several incidents are legally reportable.

At a meeting with Bastian and Darian, Sabine says:

“We have a reporting obligation. We can explain that causation remains under investigation, but I do not think we can lawfully sit on this.”

Bastian responds:

“Reporting now will destroy the launch. Engineering expects a software fix in six weeks. There is no reason to trigger a regulatory panic before we know whether the battery actually caused every incident.”

He instructs Darian to categorize future incidents internally as:

“user-environment anomalies”

unless a patient dies.

Sabine objects.

Bastian says:

“You have given your legal advice. I have heard it. I run the company.”

The following week, Sabine discovers that Darian has drafted a regulatory filing concerning an unrelated AeroVive issue.

The filing states:

“Northmere is not presently aware of any recurring power-loss pattern affecting the AeroVive 4.”

Darian tells Sabine:

“Bastian approved the wording. Technically, we have not proven that the incidents have the same cause.”

Sabine tells Darian that the statement is misleading and should not be filed.

Darian replies:

“Then take it up with Bastian. I am not losing my job over this.”

Around the same time, Ilan Mercer, Northmere’s senior battery engineer, asks to speak privately with Sabine.

Ilan says:

“I need legal advice. I think they are going to blame this on engineering.”

Sabine responds:

“I am Northmere’s lawyer, but we are all trying to deal with the same problem. Tell me what happened.”

Ilan tells her that:

• he warned Bastian two months before launch that battery testing was incomplete;

• Bastian ordered the launch to continue;

• Ilan deleted an early draft engineering memorandum after Bastian told him it was “unhelpful speculation”; and

• a backup copy still exists on Ilan’s personal computer.

Ilan then asks:

“You are my lawyer too, right? This is confidential?”

Sabine replies:

“I will keep this as confidential as I professionally can.”

She does not expressly tell him to obtain independent counsel.

Sabine later tells Bastian that Northmere must correct its course and make the required regulatory disclosures.

She does not reveal Ilan’s personal-computer disclosure.

Bastian responds:

“This discussion is finished. If you go to the board, you are undermining management. If you contact the regulator without authorization, you are fired.”

Northmere’s board has an audit and compliance committee.

Sabine has direct access to its chair.

Bastian nevertheless instructs her to continue preparing commercial agreements concerning the AeroVive 4 launch.

He also asks her to revise the regulatory filing so that:

“it says nothing false but does not invite questions about batteries.”

Sabine believes Northmere is continuing to violate its reporting obligations.

She is considering:

1. following Bastian’s instructions;

2. going directly to the audit committee;

3. disclosing the matter herself to the regulator; or

4. resigning.

QUESTION

Advise Sabine concerning her professional obligations to Northmere and Ilan, including the identity of her client, the proposed regulatory filing, the continuing corporate conduct, confidentiality, internal escalation and withdrawal.

25 MARKS

QUESTION TWO

25 marks — suggested time: 45 minutes

FACTS

Vela Hart is litigation counsel for Dovetail Foods Ltd. (“Dovetail”) in a civil action arising from a warehouse fire.

The plaintiff alleges that Dovetail ignored repeated warnings that its industrial refrigeration system was unsafe.

Dovetail denies receiving any warning before the fire.

The action is scheduled for trial in three weeks.

During discovery, Dovetail produced thousands of emails.

One important email from six months before the fire appears to show that Dovetail’s operations director received a contractor’s warning that:

“continued operation without replacement of the pressure valve creates a substantial fire risk.”

The copy produced by Dovetail contains a later response from the operations director:

“Replace it immediately.”

Dovetail relies heavily on that response.

Three weeks before trial, Vela is preparing Dovetail’s operations director, Kellen Firth, to testify.

Kellen says:

“There is something I should probably tell you.”

He explains that the response:

“Replace it immediately”

was actually written after the fire.

Kellen says that, during the investigation, he opened an archived copy of the old email and typed the response because:

“I wanted the file to show what I would have done if I had actually seen the contractor’s warning.”

He then forwarded the altered chain to Dovetail’s document-management team.

Vela asks whether anyone else knows.

Kellen says:

“Probably not. The plaintiff already has the document. We are too close to trial to blow the case up over metadata.”

Vela immediately checks the original server backup.

It confirms Kellen’s account.

The next morning, Vela tells Dovetail’s CEO that the document must be corrected.

The CEO replies:

“Kellen made a foolish edit, but the plaintiff has its own experts. We hired you to win the case, not prosecute our employees.”

He instructs Vela not to disclose the alteration.

Vela says she cannot knowingly rely on the document.

The CEO responds:

“Then do not mention it. Nobody is asking you to put Kellen on the stand about when he typed the response.”

Kellen is nevertheless Dovetail’s principal trial witness.

While preparing him, Vela asks:

“What will you say if opposing counsel asks whether the response was written before the fire?”

Kellen replies:

“I will say I do not remember exactly. That is technically true—I do not remember the exact date I typed it.”

Vela tells him:

“Answer the question you are asked. Do not volunteer more than necessary.”

She later becomes uncomfortable with that advice.

A second problem arises.

Another employee, Paloma Crewe, tells Vela:

“I did not personally hear Kellen order the valve replaced, but if it helps, I can say I heard him telling maintenance to deal with it. Everyone knows he would have.”

Vela tells Paloma:

“We need witnesses who are certain. Think carefully about whether you might actually remember the conversation.”

Paloma later emails:

“I’ve thought about it. I’m comfortable saying I heard him.”

Vela does not believe Paloma actually remembers such a conversation.

A third issue arises five days later.

Opposing counsel accidentally emails Vela a document titled:

PLAINTIFF TRIAL STRATEGY — PRIVILEGED

The first page states that the plaintiff’s lawyers plan to abandon one significant damages theory because their expert is vulnerable on cross-examination.

Vela notices the title immediately but continues reading all six pages.

She forwards the document to Dovetail’s CEO with the message:

“Do not circulate. This materially improves our trial position.”

Finally, one week before trial, the judge’s assistant emails both counsel asking for a short joint update on trial readiness.

Opposing counsel is away.

Vela replies only to the judge’s assistant:

“Dovetail is fully ready. The plaintiff has serious unresolved expert-evidence problems that may shorten the trial.”

She does not copy opposing counsel.

The assistant responds:

“Thank you. I will advise the judge.”

Vela is now concerned that several professional issues have arisen.

QUESTION

Advise Vela concerning her professional obligations in relation to the altered document, Kellen and Paloma’s proposed evidence, the mistakenly transmitted strategy memorandum and her communication with the judge’s assistant.

25 MARKS

QUESTION THREE

20 marks — suggested time: 36 minutes

FACTS

Aster Blythe, a lawyer with 17 years of commercial experience, has recently begun offering mediation services.

Two shareholders, Corwin Rusk and Marlowe Stenn, retain Aster to mediate a dispute concerning their software company.

At the beginning of the first session, Aster says:

“I am neutral. My role is to help you reach an agreement.”

She provides a standard mediation agreement stating that:

• she does not act as counsel for either party;

• each party may obtain independent legal advice; and

• mediation communications are confidential subject to applicable law.

During private caucus, Corwin tells Aster:

“The company may run out of cash in 30 days. Marlowe does not know. If she knew, she would never accept the buyout price I am proposing.”

Aster asks whether Corwin authorizes her to disclose the information.

Corwin says:

“Absolutely not.”

During a later joint session, Marlowe asks Aster:

“Is there anything you know that makes this offer much worse for me than it looks?”

Aster responds:

“I cannot disclose what either party tells me privately.”

Marlowe then asks:

“As a lawyer, do you think the share-purchase clause Corwin drafted actually protects me?”

Aster replies:

“I think the clause is probably enforceable, and commercially I would be comfortable signing it.”

Marlowe signs a tentative term sheet.

The mediation then collapses over another issue.

Two days later, Corwin asks Aster to represent him in litigation against Marlowe arising from the shareholder dispute.

He says:

“You already understand the file better than anyone, and Marlowe signed an agreement acknowledging that you were not her lawyer.”

Aster is tempted to accept.

She knows from mediation that Marlowe:

• has serious personal financial difficulties;

• told Aster privately that she cannot fund prolonged litigation; and

• would probably accept substantially less than her stated minimum settlement position.

A separate lawyer, Tobias Kern, takes over negotiations for Corwin.

Tobias sends Marlowe’s counsel the following letter:

“Unless your client accepts $425,000 by Friday, we will report her conduct to the securities regulator and ask that a formal investigation be commenced.”

Corwin has a plausible regulatory complaint.

However, Tobias privately tells Corwin:

“The regulator is leverage. Once she signs the release, there is no reason for us to bother.”

During settlement discussions, Tobias also says:

“Corwin will not pay a cent above $425,000.”

In fact, Corwin authorized settlement up to $550,000.

Marlowe ultimately accepts $430,000.

QUESTION

Advise Aster and Tobias concerning the professional-responsibility issues arising from the mediation and subsequent settlement negotiations.

20 MARKS

QUESTION FOUR

15 marks — suggested time: 27 minutes

FACTS

Jude Corbett, a criminal defence lawyer, represents Silas Marr on a charge of armed robbery.

Silas initially tells Jude:

“I did not do it.”

Two weeks before trial, Silas changes his account.

He tells Jude:

“Fine. I was there and I took the money. But the Crown cannot prove it. Their witness barely saw my face.”

Silas says he still intends to plead not guilty.

He asks:

“You can still argue I was not the robber, right?”

Jude responds:

“The Crown has the burden. You do not have to plead guilty because you confessed to me.”

Silas then says that his cousin Nico is prepared to testify that Silas was with him in another city at the time of the robbery.

Jude asks whether that is true.

Silas laughs and says:

“No. But Nico owes me.”

Jude says he cannot call false evidence.

Silas replies:

“Then do not ask him directly. Put him on the stand and let him say what he wants.”

A further complication arises.

The complainant suffered a relatively minor physical injury during the robbery.

Silas tells Jude that his family can pay the complainant $20,000.

He asks Jude to tell the complainant:

“Take the money and ask the Crown to drop the charges.”

Silas says:

“That is not a threat. Everybody wins.”

Jude has not discussed such a proposal with the Crown.

Finally, Silas owes Jude $18,000 in legal fees.

Trial begins in nine days.

Jude tells Silas:

“If the outstanding account is not paid by Friday, I am withdrawing.”

The court has already refused one earlier adjournment and has indicated that the trial will proceed as scheduled.

QUESTION

Advise Jude concerning how he may continue to defend Silas, the proposed alibi evidence, the payment proposal to the complainant and Jude’s ability to withdraw for non-payment of fees.

15 MARKS