Solicitor

Question 1

Karoline is an articling student at Thomson Lawyers. Larry, her articling principal, is behind schedule and has to attend several meetings before he can go to his friend’s wedding reception in the evening. He has asked Karoline to take responsibility for a number of morning tasks at the office to assist him with completing his work. What may Karoline do?

a) Give an undertaking on Larry’s behalf
b) Provide advice to Larry’s client on drafting his will
c) Accept a new client retainer on Larry’s behalf
d) Draft and execute a will without Larry’s supervision

Answer 1

Give an undertaking on Larry’s behalf

Karoline is an articling student and therefore a non-licensee. Since Karoline received express instruction and authorization, Karoline may give or accept an undertaking on Larry’s behalf. Other tasks Karoline is permitted to do include taking instructions from a client and acting before an adjudicative body on Larry’s behalf in a routine, administrative capacity. In contrast, Karoline is not permitted to do any of the tasks listed in options B-D. Source: Rules of Professional Conduct, R. 6.1-1.

Chapter 13: Practice Management, 7.3 Delegation and Supervision

Question 2

Jack is the lawyer representing Derek in a complex civil matter. In conversation, Derek mentioned he has a cousin who is mentally incapable of handling his finances. Derek states that his cousin has an existing power of attorney for property in which Derek’s sister, Alex, is appointed as attorney. Derek is upset with this appointment and tells Jack to draft a new power of attorney, without consent from Derek’s cousin, in which Derek will be appointed as attorney. Derek advises that he will forge his cousin’s signature on the power of attorney that Jack drafts and hands Jack a cheque in a large amount. What must Jack do?

a) Refer Derek to another lawyer
b) Take the money as you need the money retainer prior to beginning work on the civil matter
c) Withdraw from acting for Derek after giving notice
d) Report the intended forgery and fraud to the police

Answer 2

Withdraw from acting for Derek after giving notice

Pursuant to R. 3.7-7 of the Rules of Professional Conduct a lawyer must mandatorily withdraw from a matter if the client’s instructions require the lawyer to act contrary to the Rules of Professional Conduct or by-laws made under the Law Society Act.

Chapter 7: Duty to the client, 2.2 Dishonesty, fraud, etc., by client or others and commentaries

Question 3

Christopher has been a lawyer for the past 10 years. For the very first time, he failed to complete his CPD hours in 2019 because he felt he had no time to complete his hours. Unfortunately, Christopher only reported the completion of one professionalism CPD hour to the Law Society and was unable to meet his mandatory obligations. As a result, Christopher’s license to practice law has been administratively suspended by the Law Society of Ontario. What must Christopher do?

a) Continue to represent clients he had before being suspended as he owes them a duty of representation
b) Provide legal services such as notarization and commissioner duties, but not attend court
c) Disclose his suspended status to his existing clients
d) Represent clients with a fast-approaching deadline of the limitation period

Answer 3

Disclose his suspended status to his existing clients

When under suspension for any reason lawyers are prohibited from practicing law and are required to disclose their suspended status to prospective, existing and former clients and engage another lawyer to complete tasks related to existing client files. Source: Law Society of Ontario, “Guidelines for Suspended Lawyers and Paralegals” online: https://lso.ca/about-lso/legislation-rules/guidelines-for-suspended-lawyers-and-paralegals.

Chapter 1: Regulating the Legal Professionals, 2.5 Suspensions — disciplinary and administrative

Question 4

Max and Elle are the vendor and purchaser, respectively, in an Agreement of Purchase and Sale of a farm property. In separate previous transactions, Max and Elle have used KHG Law for their own real estate matters. KHG Law has accepted money retainers from both Max and Elle and has agreed to handle their respective files. Is KHG Law in breach of their professional conduct?

a) No, one lawyer from KHG Law can represent both Max and Elle
b) Yes, there is a conflict of interest
c) No, as long as two different lawyers with KHG Law represent each client
d) Yes, KHG Law should have picked one of the two clients due to their previous relationship with the firm.

Answer 4

No, as long as two different lawyers with KHG Law represent each client

A law firm with two or more lawyers may represent both a purchaser and a seller in a transaction as long as both parties are represented by different lawyers at the firm. Source: Rules of Professional Conduct, R. 3.4-16.7 to 16.9

Chapter 6: Conflicts of Interest, 8. Joint retainers in estate and real estate matters, 8.3 Acting for transferor and transferee

Question 5

During a joint retainer between Kyle and Gary with respect to their joint venture agreement, they get into an argument about what percentage each of them should contribute. Kyle is adamant that they both should contribute 50% equally and Gary is adamant that he contribute 30% and Kyle should contribute 70% since Kyle earns more at his full-time job. Kyle and Gary cannot move forward in discussing other aspects of the agreement because of this argument. Kyle and Gary arrive at their lawyer’s office, Susan, who has been assisting them in drafting the joint venture agreement. Susan, knowing that legal advice is required, should:

a) Withdraw from representation
b) Advise both Kyle and Gary that the have the option to settle the contentious issue by direct negotiation in which Susan will not participate
c) Refer Kyle and Gary to other lawyers for independent legal representation
d) Refer Kyle and Gary to other lawyers for independent legal advice

Answer 5

Refer Kyle and Gary to other lawyers for independent legal advice

Whenever a contentious issue arises among joint clients a lawyer has to try to have the contentious issue resolved in one of three ways: (1) send the clients out to get independent legal advice [which is option D]; (2) advise the clients that they can settle the issue by direct negotiation in which the lawyer does not participate if the clients are sophisticated and no legal advice is required; or (3) the lawyer may advise one of the clients but must send the other out to get independent legal advice. If one these methods does not resolve the contentious issue then the lawyer must withdraw. In this instance, option D is correct. Source: Rules of Professional Conduct, R. 3.4-5 to 3.4-9

Chapter 6: Conflicts of Interest, 7. Joint retainers, 7.2 Contentious issues, withdrawal

Question 6

Pranevan, an instructing agent for ABC Corp and Chair of the Board of Directors, has met with Jill, a corporate lawyer, for a consultation. Pranevan conveys that ABC Corp. is looking to merge with XYZ Corp. Pranevan retains Jill after the consultation. By the time Jill is retained, she must have recorded the following information:

a) ABC Corp’s full corporate name, business address, and financial information and Pranevan’s full name, phone number and residency information
b) ABC Corp and XYZ Corp’s business name, address and financial information
c) ABC Corp’s full corporate name, business address and phone number and Pranevan’s full name, position and contact information
d) ABC Corp’s and XYZ Corp’s full corporate name, business address and phone number and Pranevan’s full name, position and contact number

Answer 6

ABC Corp’s full corporate name, business address and phone number and Pranevan’s full name, position and contact information

Pursuant to By-Law 7.1, s 20, 23(1)-(2.3) and (12.1) - (12.2), when a lawyer has been retained by an organizational client, the lawyer is required to identify and verify the client. For an organization, this information includes collecting specified (1) identifying information from the instructing agent; and (2) identifying information for the organization.

Chapter 3: Who is the client, 3. Client identification and verification requirements, 3.2.2 Verifying identity when the client or third party is an organization

Question 7

Jordan, a seasoned real estate lawyer, has been approached by longtime client, Avery, who is seeking to secure a mortgage of $100 000 for a new home purchase. The lender, CityBank, has also requested Jordan to represent them in the transaction, citing Jordan’s extensive experience and reputation in real estate law as the reason for their confidence. Can Jordan act for both parties?

a) Yes, if Avery provides written consent to the joint retainer and CityBank provides written instructions to Jordan
b) Yes, only if Jordan explains the joint retainer rules and obtains written consent from both the borrower and the lender.
c) No, since Jordan may not represent both a borrower and lender in this matter
d) No, since this would violate the Rules of Professional Conduct

Answer 7

Yes, if Avery provides written consent to the joint retainer and CityBank provides written instructions to Jordan

Since CityBank is a bank, they are categorized as a “lending client” pursuant to R. 3.4-12 to 3.4-16 of the Rules of Professional Conduct. A lawyer is permitted to represent both an individual borrower and a lending client in a transaction since this is a permitted exception provided for in the Rules.

Chapter 6: Conflict of Interest, 8. Joint retainers in estate and real estate matters, 8.2 Acting for the borrower and lender

Question 8

Alex, a partner at a reputable law firm, recently encountered a situation where a potential new client, Morgan, sought representation in a legal matter directly opposing a former client, Jamie, whom Alex had represented two years ago. Alex has relevant confidential information obtained from Jamie’s matter that he could use to Morgan’s benefit. Can Alex’s law firm represent Morgan?

a) Yes if the firm proves to a court that the new matter is not substantially related to the matter handled for the former client
b) Yes if Alex’s firm demonstrates that it has implemented adequate measures on a timely basis to ensure no disclosure of Jamie’s confidential information.
c) Yes if the Alex’s firm destroys all documents related to Jamie’s completed matter.
d) No, the Rules of Professional Conduct do not permit this

Answer 8

Yes if Alex’s firm demonstrates that it has implemented adequate measures on a timely basis to ensure no disclosure of Jamie’s confidential information.

Pursuant to R. 3.4-10 to 3.4-11 of the Rules of Professional Conduct (RPC) a lawyer who has relevant confidential information related to a former client’s matter may act against the former client in a new matter if: (1) the former client consents to the lawyer acting against them; (2) the former client consents to the lawyer’s partner or associate acting against them; or (3) the lawyer’s firm takes adequate measures on a timely basis to ensure there will be no risk of disclosure of the former client’s confidential information. As a result, Option B is correct.

Chapter 6: Conflicts of Interest, 6. Acting against former clients and commentaries, 6.2 New matters

Question 9

Jordan and Taylor, a married couple, approached a well-regarded estate planning lawyer, Sam, to draft mirror wills. The wills were meticulously prepared to align with both Jordan’s and Taylor’s wishes. Several weeks after the completion and execution of these mirror wills, Jordan discreetly contacts Sam with a request to amend their will in a manner that significantly diverges from the previously agreed-upon terms with Taylor. Is Sam permitted to follow Jordan’s new instructions?

a) Yes, if Sam believes the change is in Jordan’s best interest and can be justified as a reasonable interpretation of the initial joint instructions.
b) No, because this creates a conflict of interest.
c) Yes, because the lawyer’s duty of confidentiality to Jordan allows for the execution of Jordan’s revised wishes without Taylor’s consent.
d) No, because Jordan’s new instructions are not in Jordan’s best interests

Answer 9

No, because this creates a conflict of interest.

Pursuant to RPC 3.4-5, if a lawyer drafts joint wills for spouses and one of those spouses later communicates unilateral and secret instructions unbeknownst to the other spouse, this creates a conflict of interest. The lawyer may deal with this conflict by treating the new instructions as a request for a new retainer, is obliged to hold those new instructions in strict confidence and has a duty to reject the new retainer.

Chapter 6: Conflict of Interest, 8. Joint retainers in estate and real estate matters, 8.1 Joint wills for spouses or partners

Question 10

Alex, an in-house corporate lawyer for InnovateTech Inc., a prominent Ontario-based technology company, discovers evidence suggesting that certain operations within the company might constitute fraudulent activity. This discovery places Alex in a challenging ethical and professional position. As part of the legal team, Alex’s role includes advising on legal risks, ensuring compliance with laws and regulations, and protecting the company’s legal interests. Who should Alex, the in-house corporate lawyer, advise first regarding this matter?

a) The board of directors.
b) The board of trustees.
c) External legal counsel.
d) The instructing agent and the Chief Legal Officer (CLO) and Chief Executive Officer (CEO).

Answer 10

The instructing agent and the Chief Legal Officer (CLO) and Chief Executive Officer (CEO).

Pursuant to RPC 3.2-7 to 3.2-8, when an organization is engaged in fraudulent or dishonest activity, the lawyer working at this company must advise the instructing agent and the CEO/CLO. If the conduct persists, then the lawyer should advise the board of directors or board of trustees. If the conduct further persists, then the lawyer must withdraw.

Chapter 7: Duty to the client, 2.2 Dishonesty, fraud, etc., by client or others

Question 11

Jordan, a newly established sole practitioner specializing in estates law, unexpectedly receives a request from a prospective client, Taylor, to handle a complex corporate merger. Despite Jordan’s efforts to research and understand the intricacies of corporate law related to mergers and acquisitions, it quickly becomes apparent that the task demands a level of expertise and experience in corporate law that Jordan does not possess. Should Jordan take on the matter?

a) No
b) Yes, if Jordan can become competent without undue delay
c) Yes, if Jordan can consult and collaborate with a competent lawyer
d) Yes, if Jordan can charge an additional fee to become competent

Answer 11

No

Pursuant to RPC 3.1-2 to 3.1-2 and 3.7-7, a lawyer who is not competent should either decline to act for a client or not take on the matter. Client consent is required for options B and C to be correct.

Chapter 4: Competence, 1. Required standard of competence

Question 12

Alex, a seasoned real estate lawyer, finds himself in a precarious situation when a former client, Morgan, initiates a civil lawsuit against him alleging professional negligence related to the handling of a property transaction. The crux of Morgan’s claim is that Alex failed to advise on certain zoning restrictions that significantly impacted the property’s value. May Alex disclose confidential information obtained during the representation to defend against the lawsuit?

a) Yes, but only disclose confidential information that is directly relevant and necessary to the lawyer’s defence.
b) No, under no circumstances can a lawyer disclose confidential information of a former client.
c) Yes, disclose all confidential information related to the former client as part of the defence strategy.
d) No, but the lawyer can hint at confidential information to persuade the former client to withdraw the lawsuit.

Answer 12

Yes, but only disclose confidential information that is directly relevant and necessary to the lawyer’s defence.

Pursuant to RPC 3.3-4, when faced with a lawsuit alleging professional negligence, a lawyer is permitted to disclose confidential information of the former client but only to the extent necessary to defend against the lawsuit. This exception to the general rule of client confidentiality is recognized in the Rules of Professional Conduct acknowledging the lawyer’s right to a defence while maintaining the principle of confidentiality as much as possible.

Chapter 5: Confidentiality, 4. Disclosure, justified or permitted without client authority, 4.3 Permitted disclosure, to defend against allegations

Question 13

Jordan, a respected lawyer with expertise in environmental law, serves on the Board of Directors for GreenFuture, a non-profit organization dedicated to promoting sustainable practices in urban development across Ontario. In this capacity, Jordan often gives presentations to community stakeholders, local governments, and potential donors about the importance of environmental sustainability. What should Jordan be mindful of as a lawyer?

a) The importance of clearly stating financial needs to support the non-profit’s mission.
b) The potential perception of creating a lawyer-client relationship through the provision of legal information.
c) The necessity to promote the non-profit’s activities and recruit volunteers.
d) The requirement to disclose any personal or financial interests in the projects discussed.

Answer 13

The potential perception of creating a lawyer-client relationship through the provision of legal information.

Pursuant to RPC 2.1-2, if a lawyer is engaged in community activities, the lawyer should be mindful of the possible perception of providing legal advice and creating, inadvertently, a lawyer-client relationship.

Chapter 3: Who is the client, 1.2. The lawyer-client relationship

Question 14

John is a lawyer practicing in Ontario. He has been representing Sarah, a client, in a personal injury case for the past year. During a recent meeting, Sarah mentioned that she had come into a considerable inheritance and was looking for investment opportunities. John sees this as an opportunity to expand his own investments. What is the first thing John must do if he wants to borrow money from Sarah?

a) Demonstrate that the transaction is fair and reasonable to the client.
b) Obtain approval from the Law Society of Ontario before proceeding.
c) Finalize the loan agreement without further action.
d) Obtain Sarah’s written consent to the transaction

Answer 14

Demonstrate that the transaction is fair and reasonable to the client.

According to the Rules of Professional Conduct (RPC) 3.4-29, lawyers must first ensure that any financial dealings with clients that are permitted by the LSO are fair and reasonable. Thereafter a lawyer must: (1) disclose the nature of the conflicting interest or how it may develop later; (2) recommend either independent legal advice or independent legal representation; and (3) obtain the client’s consent to the transaction.

However, borrowing from clients is prohibited except where the client is a regulated lender or a related person.

Chapter 6: Conflicts of Interest, 11. Transactions with clients

Question 15

Emma is a lawyer at XYZ Law Firm in Ontario. She has been representing a pro bono client, Michael, in a civil rights case for the past few months. During a recent meeting, Michael mentioned that he is planning to file a lawsuit against one of the firm’s paying clients, Corporation A, for alleged discrimination. What must Emma do if Michael intends to sue a client of her firm?

a) Advise Michael to proceed with the lawsuit and ensure confidentiality.
b) Continue representing Michael while informing her firm about the potential conflict of interest.
c) Cease to act for Michael and withdraw from representing him in the case.
d) Seek permission from the Law Society of Ontario before taking any further action.

Answer 15

Cease to act for Michael and withdraw from representing him in the case.

According to the Rules of Professional Conduct (RPC) rr. 3.4-16.2–3.4-16.6, when a lawyer providing pro bono legal services becomes aware that their client is acting adversely to a client of the lawyer’s firm, the lawyer must cease to act for the pro bono client and withdraw from representing them. This is to avoid conflicts of interest and to maintain the integrity of the lawyer-client relationship.

Chapter 6: Conflicts of Interest, 9. Pro Bono and other short-term legal services

Question 16

Sarah, a lawyer practicing in Ontario, has been retained by a client who is visually impaired. The client, Alex, is seeking legal advice regarding a property dispute. What can Sarah do to accommodate Alex’s visual impairment and communicate effectively with him?

a) Provide all documentation to Alex in standard font size as usual.
b) Email the documentation to Alex so he can use screen reader software to access it.
c) Print all documentation for Alex in a large font size.
d) Arrange for an interpreter to communicate verbally with Alex during meeting

Answer 16

Print all documentation for Alex in a large font size.

To accommodate Alex’s visual impairment and ensure effective communication, Sarah should print all documentation in a large font size. This accommodation allows Alex to read the documents more easily and ensures accessibility. Providing documents in a format that Alex can easily access and read aligns with ethical considerations regarding Source: Law Society of Ontario, “Client Service and Communication” online: https://lso.ca/lawyers/practice-supports-and-resources/practice-management-guidelines/client-service-and-communication.

But question IMO. No where does it say this exact answer and visually impaired may mean completely blind - in which case B would be the best answer - but still a crap answer.

Question 17

Emily is a lawyer practicing in Ontario, and her best friend, Samantha, recently approached her for legal representation. Samantha claims that she was wrongfully dismissed from her job and wants to take aggressive legal action against her former employer. Emily is deeply upset on behalf of Samantha and is considering representing her in the case. Can Emily act for Samantha in her wrongful dismissal case?

a) Yes, as long as Emily discloses her personal relationship with Samantha to the employer.
b) Yes, but Emily must ensure that her emotions do not affect her legal judgment in the case.
c) No, because Emily cannot provide objective and disinterested advice to Samantha in this matter.
d) No, unless Emily obtains permission from the Law Society of Ontario due to the personal relationship involved.

Answer 17

No, because Emily cannot provide objective and disinterested advice to Samantha in this matter.

According to Rule 3.4-1 of the Rules of Professional Conduct (RPC), a lawyer must not act or continue to act if there is a conflict of interest that would affect the lawyer’s ability to represent the client effectively. In this scenario, Emily’s close personal relationship with Samantha and her emotional involvement in the case would prevent her from providing objective and disinterested advice. Therefore, Emily cannot ethically act for Samantha in her wrongful dismissal case.

Chapter 6: Conflicts of Interest, 12. Other conflicts of interest, 12.1 Personal relationships - comentary

Question 18

John, a lawyer in Ontario, is representing TD Bank as the mortgagee in a real estate transaction. The transaction involves the registration of a mortgage on a property owned by the borrower. John also serves as a Board Member for the local Humane Society, where he volunteers his time to support animal welfare initiatives. Furthermore, John has recently borrowed money from another current client, Tom, to finance a personal investment. Within 60 days of the registration of the mortgage, what is John required to provide to TD Bank?

a) A copy of the property title deed.
b) A draft mortgage agreement for review.
c) A duplicate registered mortgage and a final report on the transaction.
d) A certificate of title insurance.

Answer 18

A duplicate registered mortgage and a final report on the transaction.

According to Rules of Professional Conduct (RPC) rr. 3.2-9.8–3.2-9.9, a lawyer representing a mortgagee in a real estate transaction must provide a duplicate registered mortgage and a final report on the transaction to the lender within 60 days of the registration of the mortgage. Despite John’s involvement in extracurricular activities and personal financial dealings, his primary duty as a lawyer is to fulfill his professional obligations to his clients, such as TD Bank, in a timely and compliant manner.

Chapter 7: Duty to the Client, 2.9 Reporting on Mortgage Transactions

Question 19

Sarah, a lawyer in Ontario, has been approached by a First Nations community to represent them in a lawsuit against the government. The lawsuit concerns an alleged infringement of the community’s on-reserve rights of possession. Sarah recognizes the importance of providing culturally competent legal representation and is aware of the unique considerations involved in advising Indigenous communities. If Sarah is providing legal advice to a First Nations community, what should Sarah do?

a) Focus solely on the legal aspects of the case and avoid engaging with cultural or community-specific matters.
b) Advise the community to adopt Western legal norms and procedures for the lawsuit.
c) Familiarize herself with the community’s leadership selection method and cultural protocols.
d) Decline to represent the community due to potential conflicts of interest.

Answer 19

Familiarize herself with the community’s leadership selection method and cultural protocols.

When providing legal advice to a First Nations community, it is essential for the lawyer to familiarize themselves with the community’s leadership selection method and cultural protocols. This helps ensure effective communication, understanding of community dynamics, and respect for Indigenous governance structures. Additionally, it facilitates building trust and collaboration between the lawyer and the community, enhancing the quality of legal representation. Source: Government of Canada, “Leadership selection in First Nations” online: https://www.sac-isc.gc.ca/eng/1323195944486/1565366893158.

Chapter 15: Indigenous Peoples of Canada, 4.3 Taking into account Indigenous perspectives

Question 20

Jessica, a newly licensed lawyer in Ontario, has just opened her own law firm and is diligently working to ensure that she complies with all the legal and professional requirements set forth by the Law Society of Ontario. Jessica knows that keeping accurate financial records is crucial for both compliance and the trust her clients place in her firm. Which book must a lawyer keep for 10 years with respect to bookkeeping requirements?

a) General ledger
b) Fee book
c) Trust receipts journal
d) Client ledger

Answer 20

Trust receipts journal

The Rules of Professional Conduct and By-Laws in Ontario stipulate that lawyers must maintain certain financial records related to the handling of client funds to ensure accountability and transparency. Among these records, the trust receipts journal is specifically required to be kept for a minimum of 10 years. This journal records all transactions involving client funds that are received into and paid out of a lawyer’s trust account. Source: By-Law 9

Chapter 14: Accounting, bank accounts, and bookkeeping, 6.3 Trust account, 6.3.1 Trust receipts journal (10 years)

Question 21

Alex, an ambitious lawyer based in Toronto, is keen on expanding his client base and enhancing his firm’s market presence. He specializes in commercial litigation and has a reputation for being a strong advocate for his clients. Alex is aware that effective marketing can play a significant role in attracting new clients. Alex is considering several strategies to promote his practice. Among his ideas is a marketing campaign that highlights his litigation success and includes a claim that he is the “most aggressive lawyer in Toronto” to attract clients looking for robust representation. Which marketing practice breaches the Rules of Professional Conduct?

a) Highlighting the number of cases won in the past year
b) Offering a free initial consultation to new clients
c) Claiming to be the most aggressive lawyer in Toronto
d) Publishing client testimonials with their consent

Answer 21

Claiming to be the most aggressive lawyer in Toronto

The correct answer is C) Claiming to be the most aggressive lawyer in Toronto. According to the Rules of Professional Conduct, specifically rules 4.2-1 and 4.2-1.2, lawyers in Ontario are required to market their services in a manner that is both truthful and does not bring the profession into disrepute. Specifically, marketing that suggests superiority in terms of aggression could be considered misleading and potentially harmful to the public’s perception of the legal profession.

Chapter 13: Practice Management, 2.1 Marketing legal services, 2.1.1 Marketing prohibitions`

Question 22

Samantha, a diligent lawyer practicing in Ontario, recently concluded a successful negotiation for a client who is purchasing a new business. The client has agreed to provide Samantha with a significant sum of money as a deposit for the purchase, which Samantha is required to hold in trust until the transaction is completed. What is the deadline for Samantha to deposit money into the trust account?

a) Immediately upon receipt of the funds
b) By the end of the next banking day
c) Within three business days of receipt
d) Within five business days of receipt

Answer 22

By the end of the next banking day

The correct answer is B) By the end of the next banking day. The Rules of Professional Conduct in Ontario specify that lawyers must deposit money received in trust from a client or on a client’s behalf into a trust account promptly. Specifically, the requirement is to deposit such funds by the end of the next banking day following the receipt of the funds. This rule is designed to safeguard client funds by ensuring they are properly and securely held in a designated trust account, separate from the lawyer’s own funds or general business accounts. Source: Law Society of Ontario, “Trust Account” online: https://lso.ca/lawyers/practice-supports-and-resources/topics/managing-money/trust-accounts.

Chapter 14: Accounting, bank accounts, and bookkeeping, 4.2 Depsotiing to the trust account (trust receipts) 4.2.2 When to deposit to trust

Question 23

David, a real estate lawyer based in Ontario, specializes in handling complex property disputes and transactions. During a routine day at his law office, he receives a consultation request from Elizabeth, a potential new client. Elizabeth is seeking legal representation for a lawsuit against a property development company over a failed real estate deal. As David listens to Elizabeth describe her case during the consultation, he realizes that the defendant in this potential lawsuit is a former client of his. Should David take on Elizabeth’s matter?

a) Yes, if the lawyer obtains consent from Elizabeth.
b) No, because this would create a conflict of interest.
c) Yes, there is no issue with being retained by Elizabeth.
d) No, because Elizabeth can’t afford the same legal services that David did.

Answer 23

No, because this would create a conflict of interest.

According to the principles established by the Canadian legal system, specifically the bright-line rule as highlighted in the Canadian National Railway Co. v. McKercher LLP case, lawyers are prohibited from representing clients in matters that are directly adverse to the interests of their current or former clients without proper consent, and even then, there are strict limitations.

Chapter 6: Conflicts of Interest, 5. Current client conflicts, 5.2 Acting directly adverse to the immediate legal interests of a current client

Question 24

Morgan, an experienced estates lawyer in Ontario, is assisting a sophisticated couple, Linda and Frank, with drafting their mirror wills. Both Linda and Frank have a clear vision of how they wish to distribute their assets. However, a contentious issue arises during a client meeting when the discussion turns to a valuable boat they own. Linda expresses her wish for the boat to be passed down to her daughter, while Frank prefers to give the boat to his favourite nephew. The disagreement escalates into an argument in Morgan’s office. Legal advice is not required to resolve the dispute. How should the lawyer aim to resolve the contentious issue?

a) By providing legal advice favouring one party over the other.
b) Through direct negotiation in which the lawyer does not participate.
c) By making a decision on behalf of the clients based on legal principles.
d) By suggesting a compromise that splits the value of the boat between the two beneficiaries.

Answer 24

Through direct negotiation in which the lawyer does not participate.

Whenever a contentious issue arises among joint clients a lawyer has to try to have the contentious issue resolved in one of three ways: (1) send the clients out to get independent legal advice; (2) advise the clients that they can settle the issue by direct negotiation in which the lawyer does not participate if the clients are sophisticated and no legal advice is required [option B]; or (3) the lawyer may advise one of the clients but must send the other out to get independent legal advice. If one these methods does not resolve the contentious issue then the lawyer must withdraw. In this instance, option D is correct. Source: Rules of Professional Conduct, R. 3.4-5 to 3.4-9

Chapter 6: Conflicts of Interest, 7.2 Contentious issues, withdrawal

Question 25

Jordan, a seasoned estates lawyer in Ontario, is approached by two prospective clients, Charles and Emma, who are interested in having mirror wills drafted. Charles is a sophisticated individual; his first language is English, he owns multiple businesses, and he holds a degree from Oxford University. Emma, on the other hand, is in a significantly different position. She is completely financially dependent on Charles, does not work, and dropped out of high school. What should Jordan do prior to agreeing to be retained?

a) Proceed with drafting the wills as requested without additional precautions.
b) Advise the more sophisticated client on how to explain the situation to the other client.
c) Send them both out to get independent legal advice.
d) Only represent the more sophisticated client and refer the other client to a different lawyer.

Answer 25

Send them both out to get independent legal advice.

According to the Rules of Professional Conduct (RPC), specifically rules rr. 3.4-5 to 3.4-9, a lawyer must take steps to ensure that all clients, especially those in joint retainer situations with potential conflicts of interest or imbalances in power and sophistication, are fully informed and that their interests are protected. In the scenario with Charles and Emma, the significant disparity in their circumstances may create a risk of undue influence or unfair pressure. By sending both clients to seek independent legal advice, Jordan ensures that each client has the opportunity to discuss their situation and the implications of the mirror wills with an independent lawyer.

Chapter 6: Conflicts of Interest, 7.1 Advice to join clients, informed consent and commentaries

Question 26

Harper, a diligent real estate lawyer in Ontario, has recently completed a purchase of a new home for her client, Alex. Following the completion of the case, Harper prepared a detailed statement of account outlining the legal fees and disbursements incurred during the representation and delivered this statement to Alex. What must Harper ensure before she pays herself for outstanding legal fees on the file?

a) That the client has given express written consent for the payment.
b) That a court order has been obtained to withdraw the funds.
c) That there are sufficient trust funds for that client for the payment of legal fees.
d) That at least 30 days have passed since the delivery of the statement of account to the client.

Answer 26

That there are sufficient trust funds for that client for the payment of legal fees.

According to Rule 3.6-10 of the Rules of Professional Conduct and By-Law 9, lawyers are obligated to ensure that there are adequate funds in their trust accounts allocated specifically for each client before disbursing any payments for legal fees. This requirement is designed to protect client funds and ensure that lawyers only withdraw fees that are properly earned and accounted for.

Chapter 14: Accounting, bank accounts and bookkeeping, 4.3 Withdrawing from trust (trust disbursements)

Question 27

Sophia, a partner at a mid-sized law firm in Ontario, has decided to leave the firm to pursue a new opportunity. During her tenure, Sophia handled a significant portfolio of corporate and commercial litigation cases, developing strong relationships with her clients. What must Sophia, a lawyer leaving the firm, and the remaining lawyers do with respect to communicating with the affected clients?

a) Immediately transfer all client files to another lawyer within the firm without notifying the clients.
b) Ensure the affected clients are given reasonable notice that the lawyer is leaving the firm.
c) Wait until the lawyer has officially left the firm before informing any clients.
d) Only inform clients who explicitly ask about the departing lawyer’s status.

Answer 27

Ensure the affected clients are given reasonable notice that the lawyer is leaving the firm.

According to RPC r. 3.7-7A and r. 3.7-7B, it is essential that both the departing lawyer and the remaining members of the firm act in the best interests of their clients during such transitions. This includes providing clients with reasonable notice about the departure of their lawyer. The notice should inform clients of the departing lawyer’s upcoming move, how their cases will be managed moving forward, and their options for legal representation, including the possibility of continuing their legal matters with the departing lawyer at their new location, staying with the firm under the care of another lawyer, or seeking representation elsewhere.

Chapter 10: Withdrawal from representation, 5. Leaving a law firm

Question 28

Elena, a real estate lawyer in Ontario with a specialization in property financing, frequently assists her clients in arranging mortgages to facilitate their real estate transactions in compliance with the Rules of Professional Conduct. She is well-versed in the complexities of mortgage law and understands the critical importance of ensuring her clients are fully informed about the terms and implications of their mortgage arrangements. What must Elena disclose in writing to each client when arranging mortgages?

a) Only the legal fees associated with the mortgage transaction.
b) The priority of the mortgage and all information relevant to the transaction.
c) The lawyer’s personal opinion on the fairness of the mortgage terms
d) Confidential information about other clients’ mortgage arrangements for comparison.

Answer 28

The priority of the mortgage and all information relevant to the transaction.

According to the Rules of Professional Conduct, specifically rules 3.4-27, 3.4-33.1, and rr. 3.4-33.2–3.4-33.3, a lawyer involved in arranging mortgages for clients must ensure that their clients are fully informed about the transaction. This includes providing written disclosure about the priority of the mortgage (e.g., whether it is a first, second, or subsequent mortgage) and any and all information relevant to the transaction. Relevant information could encompass the terms of the mortgage, interest rates, repayment obligations, potential risks, and any other material conditions or charges associated with the mortgage.

Chapter 6: Conflicts of Interest, 11. Transactions with clients, 11.4 Lawyers in mortgage or loan transactions

Question 29

Jordan is a corporate lawyer in Ontario with a strong reputation for advising startups and established businesses on a range of legal issues, from incorporation to complex mergers and acquisitions. During a consultation with a prospective client, Alex, who is the owner of an emerging tech startup, an unusual proposition is made. Alex suggests compensating Jordan for his legal services with shares in his startup instead of traditional payment methods. Before accepting the retainer what must Jordan do?

a) Immediately accept the offer if the business appears to be valuable.
b) Conduct a thorough valuation of the business to determine the fairness of the offer.
c) Recommend the prospective client receive independent legal advice.
d) Ensure that the transaction is fully documented in the lawyer’s personal financial records.

Answer 29

Recommend the prospective client receive independent legal advice.

According to Rule 3.4-29 of the Rules of Professional Conduct, when entering into business transactions with a client or acquiring a pecuniary interest in the subject matter of the client’s case (other than by way of legal fees), a lawyer must ensure that the transaction is fair and reasonable to the client. One key aspect of ensuring fairness and protecting the client’s interests is to recommend that the client seek independent legal advice regarding the transaction. This step is crucial to ensure that the client fully understands the implications, benefits, and potential risks of compensating the lawyer with shares in their business instead of money. It also helps to safeguard against any potential conflicts of interest and ensures that the client’s decision is informed by unbiased advice.

Chapter 6: Conflicts of Interest, 11.6 Payment for legal services

Question 30

Kevin, an estates lawyer in Ontario, has recently been approached by a colleague, Lisa, who specializes in employment law. Lisa has a client, Tom, who needs a will drafted. Since Lisa’s expertise does not extend to estates law, she considers referring Tom to Kevin, believing that Kevin’s experience and track record make him well-suited to handle Tom’s matter. Kevin and Lisa discuss the potential referral, and Lisa mentions that she would expect a referral fee from Kevin for directing Tom to his practice. What is one of the requirements for a lawyer accepting a referral fee from another lawyer?

a) The referral fee must be disclosed to and approved by the Law Society of Ontario.
b) The referral fee can only be accepted if it is part of a formal partnership agreement.
c) The referral fee is fair and reasonable and does not increase the total amount of the fee payable by the client.
d) The referral fee must be a fixed percentage of the lawyer’s earnings from the referred case, regardless of the outcome.

Answer 30

The referral fee is fair and reasonable and does not increase the total amount of the fee payable by the client.

According to Rule 3.6-6.1 of the Rules of Professional Conduct, when a lawyer accepts a referral fee from another lawyer, several conditions must be met to ensure the arrangement complies with ethical standards. Importantly, the referral fee must be fair and reasonable under the circumstances, and it must not result in an increase in the total fee charged to the client as a result of the referral. This requirement is designed to protect the interests of the client, ensuring that the referral does not lead to unnecessary or inflated legal costs.

Chapter 8: Fees and Disbursements, 4.1 Referral fee requirements

Question 31

Michael, a real estate lawyer in Ontario, has recently expanded his practice and taken on several articling students to help manage the increasing workload, particularly in processing real estate transactions. Aware of the efficiencies offered by electronic registration and document signing, Michael uses an e-reg personalized security package, which allows for the electronic submission and signing of documents related to real estate transactions. Given the volume of work, can Michael delegate to his articling students the use of his e-reg personalized security package to electronically sign documents?

a) Yes, as long as the articling students are directly supervised by Michael.
b) No, because the personalized security package is non-transferable and for the lawyer’s use only.
c) Yes, if the articling students have their personalized security packages.
d) No, unless the Law Society of Ontario grants a special exemption.

Answer 31

No, because the personalized security package is non-transferable and for the lawyer’s use only.

According to the Rules of Professional Conduct and By-Law 7.1, the use of electronic registration and document signing systems, such as an e-reg personalized security package, is strictly regulated. These rules ensure that the integrity and security of electronic legal transactions are maintained. The personalized security package is issued to a specific lawyer and is intended for that lawyer’s use alone, reflecting their personal responsibility for any document signed electronically. Allowing articling students or any other individuals to use a lawyer’s personalized security package to electronically sign documents would compromise the security and integrity of the legal documents and the electronic registration system.

Chapter 13: Practice Management, 7.4 Supervision in real estate matters

Question 32

Amanda, a seasoned corporate lawyer in Ontario, recently welcomed an articling student, Ben, to her practice. Amanda’s caseload has been increasing, and she sees Ben’s arrival as an opportunity to manage her workload more efficiently while providing Ben with practical, hands-on legal experience. Amanda is keen on involving Ben in various aspects of her practice to enhance his learning, including client interactions, which she believes are crucial for his development as a lawyer. What task can be delegated to an articling student with direct supervision from a lawyer?

a) Independently representing a client at a trial in court.
b) Taking instructions from the client.
c) Signing law statements on behalf of the lawyer.
d) Making final decisions on legal strategies.

Answer 32

Taking instructions from the client.

According to Rule 6.1-1 of the Rules of Professional Conduct, lawyers may delegate tasks to articling students, provided that the tasks are supervised appropriately and the delegating lawyer remains ultimately responsible for the conduct of the articling student. Taking instructions from a client under the direct supervision of a lawyer is a task that can be delegated to an articling student. This arrangement allows the student to gain practical experience in client interactions and understanding client needs while ensuring that the supervising lawyer oversees the process to verify the accuracy and appropriateness of the instructions taken.

Chapter 13: Practice Management, 7.3 Delegation and Supervision

Question 33

James, the managing partner at a reputable law firm in Ontario, is in the process of hiring a new secretary who will have responsibilities that include handling client funds and managing financial transactions for the firm. Given the sensitivity and trust involved in managing clients’ money, James understands the importance of ensuring that any new hire is thoroughly vetted to uphold the firm’s integrity and maintain the trust of their clients. What may James request when hiring a new secretary who will be assisting with handling money at the firm?

a) Only references from previous employers.
b) Criminal record check and credit report.
c) A written pledge of good conduct.
d) Proof of legal education and qualifications.

Answer 33

Criminal record check and credit report.

When hiring staff who will be involved in handling money or managing financial transactions within a law firm, it is prudent and often required to conduct thorough background checks. This includes requesting a criminal record check and a credit report for the prospective employee. These checks help assess the trustworthiness and reliability of individuals who will have access to or responsibility for managing clients’ funds. Source: By-Law 4 and By-Law 7.1, Part I

Chapter 13: Practice Management, 7.1 Hiring support staff

Question 34

Samantha, an experienced real estate lawyer in Ontario, has been working diligently on a complex property transaction involving multiple parties and significant financial stakes. In the course of preparing the final documents for closing, Samantha realizes she has made a significant error in the legal description of the property, which could potentially derail the transaction and have financial repercussions for her client, Mr. Johnson. Upon discovering the mistake, Samantha is immediately concerned about the implications of her error. Since the mistake cannot be readily corrected, who is the first party that Samantha must inform about the mistake?

a) The Law Society of Ontario
b) Mr. Johnson
c) LAWPRO
d) A senior partner or managing lawyer within the firm

Answer 34

Mr. Johnson

Informing the client about the mistake allows for an open discussion about the potential implications, possible corrective measures, and the next steps to mitigate any adverse effects. This duty reflects the lawyer’s ethical obligations to maintain client trust, uphold the standards of the legal profession, and ensure that clients are fully informed about matters affecting their interests. Source: Law Society Act, s. 7.8

Chapter 7: Duty to the client, 2.10 Errors and omissions

Question 35

David, a litigation lawyer in Ontario, is currently representing a client in a contentious business dispute. One day, while shopping at the local grocery store, he unexpectedly runs into Mr. Green, who is represented by opposing counsel in the ongoing dispute. What can David talk about directly with Mr. Green in this unexpected moment?

a) The details of the case they are involved in.
b) Settlement offers or negotiation terms.
c) The weather
d) Advice on legal strategy.

Answer 35

The weather.

According to the Rules of Professional Conduct, specifically rr. 7.2-6 to 7.2-7, a lawyer is prohibited from communicating on the subject of the representation with a person who the lawyer knows is represented by another lawyer in the matter, unless the other lawyer consents or is authorized by law to do so. This rule is designed to respect the lawyer-client relationship and to prevent circumventing the proper legal channels for communication.

Chapter 11: Duty to others, 3. Duty to lawyers and others, 3.3 Communications with represented persons, second opinions and commentaries

Question 36

Alex, a corporate lawyer, has uncovered evidence of fraudulent documents presented at Pepsi’s recent shareholder meeting. Alex’s client is a significant shareholder in Pepsi and is deeply concerned about the implications of this fraud on their investment and the company’s overall integrity. In pursuing this matter further, Alex believes it is crucial to communicate with John, the CEO of Pepsi, who is not only represented by Pepsi’s legal team but also has his own independent legal representation due to the complexities of the situation and potential conflicts of interest. If Alex wants to ask John directly about the fraudulent documents at the Pepsi shareholder meeting, who does he need consent from?

a) Only John, the CEO of Pepsi.
b) Only John’s independent lawyer.
c) Pepsi’s lawyers.
d) Both Pepsi’s lawyers and John’s independent lawyer.

Answer 36

Pepsi’s lawyers.

According to the Rules of Professional Conduct, specifically rr. 7.2-8 to 7.2-8.2, when a lawyer wishes to communicate with a person about a matter and that person is represented by another lawyer in the matter, the consent must be obtained from the lawyer representing that person in the specific matter at hand. In this scenario, because Alex wants to discuss issues related to Pepsi’s shareholder meeting, which directly involves Pepsi as an entity, consent should be obtained from Pepsi’s legal team, who represents the company in this matter. While John, the CEO, is also represented independently, the primary concern here is the subject matter’s direct relevance to Pepsi as a corporate entity and the need to respect the formal representation in place for the company.

Chapter 11: Duty to others, 3. Duty to lawyers and others, 3.3.1 Communications with persons associated with a represented organization and commentaries

Question 37

Jacob, a new lawyer who has recently started his own real estate practice in Ontario, is in the process of finalizing a property transaction for one of his clients. As part of this transaction, Jacob needs to provide an undertaking to another lawyer involved in the deal, promising to perform specific actions related to the client file. What should John ensure when providing an undertaking with respect to a client file for his real estate practice?

a) That the undertaking is verbally agreed upon during a meeting.
b) That the undertaking is confirmed in writing.
c) That the undertaking is posted on the firm’s website for transparency.
d) That the undertaking is only shared with the client for approval.

Answer 37

That the undertaking is confirmed in writing.

According to the Rules of Professional Conduct, specifically rr. 5.1-6 and 7.2-11, when a lawyer provides an undertaking, it must be confirmed in writing. This requirement ensures that there is a clear, unambiguous record of the commitment being made, which can be referred to by all parties involved. Confirming undertakings in writing is a critical practice in the legal profession, as it helps prevent misunderstandings and disputes regarding what has been promised.

Chapter 11: Duty to Others, 3.4 Undertakings and trust conditions and commentaries

Question 38

Thomas, a commercial law attorney in Ontario, receives an unexpected phone call from a prospective client, Jill, who is seeking legal advice regarding a complex contractual dispute involving her business. During the initial phone conversation Jill reveals significant confidential information related to her case. A few days later, Jill attends Thomas’s office for a detailed consultation, following which she agrees to retain Thomas as her lawyer. When should the lawyer open up a file for Jill?

a) After the initial phone call when Jill revealed confidential information.
b) Only after the formal consultation in the office.
c) Once Jill agrees to retain the lawyer during the office visit.
d) After the first legal document is prepared or filed.

Answer 38

After the initial phone call when Jill revealed confidential information.

According to the professional and ethical guidelines that govern legal practice, a lawyer’s duty to maintain client confidentiality and manage client information responsibly begins from the moment a prospective client reveals confidential information, even if a formal retainer agreement has not yet been established. This duty arises because the disclosure of confidential information creates a professional obligation for the lawyer to protect that information, regardless of whether the individual ultimately becomes a client. Therefore, Thomas should recognize the disclosure of confidential information during the initial phone call as the trigger for opening a file for Jill. This early establishment of a file is crucial for properly managing and safeguarding the confidential information disclosed, demonstrating commitment to professional responsibilities, and ensuring compliance with the Rules of Professional Conduct set by the Law Society of Ontario. Source: Law Society of Ontario, “File Management” online: https://lso.ca/lawyers/practice-supports-and-resources/practice-management-guidelines/file-management.

Chapter 13: Practice Management, 3.2 Opening files, file organization and storage

Question 39

Derek, a seasoned real estate lawyer practicing in Ontario, recently encountered a challenging situation with one of his clients, Mr. Anderson, regarding the handling of a property transaction. Despite Derek’s efforts to resolve Mr. Anderson’s concerns through direct communication, Mr. Anderson remains dissatisfied with the outcome and decides to file a complaint against Derek to the Law Society of Ontario, alleging professional misconduct. Which department of the Law Society is responsible for first reviewing the complaints against lawyers?

a) The Professional Regulation Department
b) The Complaints and Compliance Department
c) The Discipline Department
d) The Client Service Centre

Answer 39

The Complaints and Compliance Department

When a complaint is filed against a lawyer, the initial review is conducted by the Complaints and Compliance Department of the Law Society of Ontario. This department is responsible for assessing complaints to determine their validity and the appropriate course of action. The process may involve gathering further information, mediating between the parties to resolve the issue, or determining whether the complaint warrants a formal investigation or disciplinary action. Source: Law Society of Ontario, “The Complaints Process”, online: https://lso.ca/protecting-the-public/complaints/complaints-process.

This is incorrect. The correct answer should be the Intake and Resolution Department.

Question 40

Sophia, a lawyer at a well-respected law firm in Ontario, has recently joined the team and is eager to integrate herself into the firm’s culture and participate in social events. Sophia practices a religion that requires her to abstain from consuming alcohol. Aware of this, she has communicated her abstention to her colleagues to avoid any potential awkward situations at firm gatherings. Despite her clear communication, during a firm social event, several partners at the firm repeatedly pressure Sophia to drink alcohol, making light of her religious beliefs and suggesting that a little drink wouldn’t hurt. What is this an example of?

a) A professional misunderstanding
b) Microaggression
c) A harmless joke
d) Standard social pressure

Answer 40

Microaggression

This situation exemplifies a microaggression, which is a term used to describe subtle, often unintentional, forms of prejudice or discrimination. Microaggressions can manifest in various ways, including comments or actions that undermine or invalidate an individual’s cultural, religious, or personal beliefs. In Sophia’s case, the partners’ pressure to consume alcohol, despite her clear abstention for religious reasons, and making light of her beliefs, constitutes a microaggression. Source: Law Society of Ontario, “Building blocks: Towards cultural competency in the justice sector” online: https://lso.ca/theactiongroup/access-to-justice-week/programming/a2j-week-2021-building-blocks-cultural-competency.

Question 41

Mark, a corporate lawyer in Ontario, represents a well-established technology firm that has recently been involved in a contentious merger negotiation. Amidst these negotiations, Mark receives a formal demand from the CRA for detailed information about his client’s financial dealings and strategic plans related to the merger. What should Mark do first upon receiving a demand for information about his corporate client from the CRA?

a) Immediately comply with the demand to avoid potential legal penalties.
b) Confirm if a legal obligation to disclose the information exists.
c) Advise the client to negotiate directly with the requesting party.
d) Destroy any sensitive documents that could be detrimental if disclosed.

Answer 41

Confirm if a legal obligation to disclose the information exists.

According to the Rules of Professional Conduct, specifically rr. 3.3-1 to 3.3-1.1, a lawyer’s primary duty is to protect client confidentiality and ensure that information is not disclosed without the client’s consent unless there is a legal obligation to do so. Upon receiving a demand for information about a corporate client, the lawyer must first assess whether a legitimate legal obligation requires the disclosure of the requested information. This assessment involves reviewing relevant laws, court orders, or regulatory requirements that might mandate the disclosure. Only if such a legal obligation is confirmed should the lawyer consider disclosing the information, always acting in a manner that protects the client’s interests to the fullest extent possible under the law. This approach ensures compliance with both the lawyer’s ethical obligations to the client and any applicable legal requirements. Source: RPC 3.3-1–3.3-1.1

Chapter 5: Confidentiality, 4. Disclosure, justified or permitted without client authority, 4.1 Justified disclosure, legally required

Question 42

Emily, an experienced estates lawyer based in Ontario, is approached by Mr. Williams, who says he has recently been appointed as the estate trustee of his late aunt’s estate through a will. Mr. Williams is seeking legal advice on how to properly administer the estate, which includes various assets, such as real estate, investments, and personal belongings, as well as several bequests to family members and charities. During their initial meeting at Emily’s office, Mr. Williams expresses his concern about fulfilling his duties as the estate trustee and ensuring that the estate is administered according to the will and Ontario law.

Question 1: A third party attends Emily’s office with Mr. Williams and starts interrupting Emily and demanding disclosure of Mr. Williams’ confidential information. What should Emily?

a) Engage with the third party to keep the atmosphere amicable.
b) Ask the third party to leave and speak with the client privately to obtain instructions on how to deal with the third party.
c) Disclose some information to appease the third party.
d) Ignore the third party and continue the conversation.

Answer 42

Ask the third party to leave and speak with the client privately to obtain instructions on how to deal with the third party.

It is crucial for the lawyer to maintain client confidentiality and ensure that any discussions about the client’s matters are held in a secure and private setting. By asking the third party to leave, the lawyer can protect the client’s confidential information and then discuss with the client how they wish to handle the third party’s demands or presence. This approach respects the client’s autonomy while adhering to the lawyer’s ethical obligations. Source: RPC 3.3-1

Chapter 3: Who is the client, 1.2 The lawyer ­client relationship

Question 43

Emily, an experienced estates lawyer based in Ontario, is approached by Mr. Williams, who has recently been appointed as the estate trustee of his late aunt’s estate. Mr. Williams is seeking legal advice on how to properly administer the estate, which includes various assets, such as real estate, investments, and personal belongings, as well as several bequests to family members and charities. During their initial meeting at Emily’s office, Mr. Williams expresses his concern about fulfilling his duties as the estate trustee and ensuring that the estate is administered according to the will and Ontario law.

Question 2: On a separate day, Suzy, a new prospective client, attends Emily’s office for a consultation. In the consultation, Emily realizes that Suzy is the beneficiary related to Mr. Williams’ matter. Suzy wants to sue Mr. Williams. What should Emily do?

a) Agree to represent Suzy in the lawsuit.
b) Suggest that Suzy and Mr. Williams engage in mediation.
c) Decline to act and confirm to Suzy there is a conflict of interest.
d) Offer to represent both Suzy and Mr. Williams in reaching an amicable solution.

Answer 43

Decline to act and confirm to Suzy there is a conflict of interest.

When a lawyer realizes that representing a new client would involve suing an existing client, a clear conflict of interest exists. The lawyer must decline to act for the new client to avoid compromising their duty of loyalty to the existing client and to uphold their ethical obligations under the law. This is an example of the “bright-line rule” outlined in Canadian National Railway Co. v. McKercher LLP.

Chapter 6: Conflicts of Interest, 5.2 Acting directly adverse to the immediate legal interests of a current client

Question 44

Emily, an experienced estates lawyer based in Ontario, is approached by Mr. Williams, who has recently been appointed as the estate trustee of his late aunt’s estate. Mr. Williams is seeking legal advice on how to properly administer the estate, which includes various assets, such as real estate, investments, and personal belongings, as well as several bequests to family members and charities. During their initial meeting at Emily’s office, Mr. Williams expresses his concern about fulfilling his duties as the estate trustee and ensuring that the estate is administered according to the will and Ontario law.

Question 3: Mr. Williams has now retained Emily for legal services. Mr. Williams gives Emily a money retainer - how long does Emily have to deposit the money into her trust account?

a) Emily must deposit the funds immediately
b) Within 5 business days.
c) By the end of the next banking day.
d) Within 2 weeks.

Answer 44

By the end of the next banking day.

According to the financial rules governing lawyers’ conduct, any funds received from clients, including retainers, must be deposited into the lawyer’s trust account promptly, which is defined as by the end of the next banking day. This ensures the funds are properly managed and safeguarded in accordance with regulatory requirements. Source: Law Society of Ontario, “Frequently Asked Questions About Trust Account Operation” online: https://lso.ca/lawyers/practice-supports-and-resources/topics/managing-money/trust-accounts/trust-account-operation#:~:text=If%20the%20client%20is%20providing,funds%20into%20their%20trust%20account..

Chapter 14: Accounting, bank accounts and bookkeeping, 4.2.2 When to deposit to trust

Question 45

Emily, an experienced estates lawyer based in Ontario, is approached by Mr. Williams, who has recently been appointed as the estate trustee of his late aunt’s estate. Mr. Williams is seeking legal advice on how to properly administer the estate, which includes various assets, such as real estate, investments, and personal belongings, as well as several bequests to family members and charities. During their initial meeting at Emily’s office, Mr. Williams expresses his concern about fulfilling his duties as the estate trustee and ensuring that the estate is administered according to the will and Ontario law.

Question 4: Emily reviews the will and sees that someone else was named the estate trustee, and Mr. Williams has lied - what is Emily permitted to do?

a) Continue representing the client as if nothing happened.
b) Report the client to the authorities for fraud.
c) Withdraw with notice due to a serious loss of confidence.
d) Persuade the client to step down voluntarily.

Answer 45

Withdraw with notice due to a serious loss of confidence.

Discovering that a client has lied about a fundamental aspect of their case, such as their appointment as estate trustee, undermines the trust necessary for the lawyer-client relationship. The lawyer is permitted, and indeed obligated, to withdraw from representing the client, provided they give reasonable notice to the client about the decision to withdraw. Source: RPC 3.7-2

Chapter 7: Duty to the client, 2.2 Dishonesty, fraud, etc. by client or others and commentaries & Chapter 10: Withdrawal from Representation, 2.1 Serious loss of confidence

Question 46

Daniel, a corporate lawyer specializing in bankruptcy and insolvency, is approached by Ms. Harper, the CEO of TechInnovate Inc., a public corporation governed by the Ontario Business Corporations Act (OBCA), which is facing financial difficulties and considering filing for bankruptcy. Ms. Harper seeks Daniel’s expertise to represent TechInnovate Inc. throughout the bankruptcy and insolvency process to ensure that the interests of the corporation and its stakeholders are protected.

Question 1: What identifying information is Daniel required to collect about TechInnovate Inc.?

a) Only the corporation’s full name and business address.
b) The organization’s full name, business address and phone number and the name and contact information of each individual authorized to give instructions
c) The CEO’s personal information only.
d) The corporation’s financial statements for the last fiscal year.

Answer 46

The organization’s full name, business address and phone number and the name and contact information of each individual authorized to give instructions

This requirement ensures that the lawyer has all necessary information to accurately identify the client organization and the individuals who are authorized to instruct the lawyer on behalf of the corporation. Collecting this information is a crucial step in fulfilling the legal obligations related to client identification and anti-money laundering regulations. Source: By-Law 7.1, ss. 20, 23(1)–(2.3), and (12.1)–(12.2)

Chapter 3: Who is the client, 3. Client identification and verification requirements, 3.2.2 Verifying identity when the client or third party is an organization

Question 47

Daniel, a corporate lawyer specializing in bankruptcy and insolvency, is approached by Ms. Harper, the CEO of TechInnovate Inc., a public corporation governed by the Ontario Business Corporations Act (OBCA), which is facing financial difficulties and considering filing for bankruptcy. Ms. Harper seeks Daniel’s expertise to represent TechInnovate Inc. throughout the bankruptcy and insolvency process to ensure that the interests of the corporation and its stakeholders are protected.

Question 2: By when does Daniel have to verify the identity of TechInnovate Inc.?

a) Within 15 days of the initial consultation.
b) Immediately upon retention.
c) 30 days after the lawyer first participates in a financial transaction involving the client.
d) when the lawyer first participates in a financial transaction involving the client.

Answer 47

30 days after the lawyer first participates in a financial transaction involving the client.

This timeframe allows the lawyer to conduct necessary due diligence and comply with legal requirements related to client verification, especially in the context of financial transactions. It is part of the anti-money laundering and counter-terrorist financing measures that legal professionals are required to adhere to. Source: By-Law 7.1, ss. 22(1)(b), 23(4), and (6)–(7)

Chapter 3: Who is the client, 3. Client identification and verification requirements, 3.2.2 Verifying identity when the client or third party is an organization

Question 48

Daniel, a corporate lawyer specializing in bankruptcy and insolvency, is approached by Ms. Harper, the CEO of TechInnovate Inc., a public corporation governed by the Ontario Business Corporations Act (OBCA), which is facing financial difficulties and considering filing for bankruptcy. Ms. Harper seeks Daniel’s expertise to represent TechInnovate Inc. throughout the bankruptcy and insolvency process to ensure that the interests of the corporation and its stakeholders are protected.

Question 3: When inquiring about the source of funds provided by TechInnovate Inc. for the money retainer, what is Daniel required to do?

a) Guess the source based on the corporation’s industry.
b) Record all information obtained
c) Only ask the CEO for a verbal confirmation.
d) Ignore the source as long as the funds are from a reputable corporation.

Answer 48

Record all information obtained

This practice is crucial for complying with anti-money laundering regulations and ensuring transparency and accountability in financial transactions. Lawyers are obligated to keep detailed records of the source of funds for retainers and other financial transactions to help prevent and detect money laundering and terrorist financing. Source: By-Law 7.1, ss. 23(2) and (12.1)

Chapter 3: Who is the client, 3. Client identification and verification requirements, 3.5 Source-of-funds information required when engaged in a financial transaction

Question 49

Daniel, a corporate lawyer specializing in bankruptcy and insolvency, is approached by Ms. Harper, the CEO of TechInnovate Inc., a public corporation governed by the Ontario Business Corporations Act (OBCA), which is facing financial difficulties and considering filing for bankruptcy. Ms. Harper seeks Daniel’s expertise to represent TechInnovate Inc. throughout the bankruptcy and insolvency process to ensure that the interests of the corporation and its stakeholders are protected.

Question 4: While at Daniel’s daughter’s basketball game, Daniel realizes he’s sitting next to one of the secured creditors involved in TechInnovate Inc.’s matter who is represented by another lawyer, Frank. What is Daniel able to discuss with the secured creditor directly?

a) The specific and ongoing insolvency process in the matter and potential outcomes.
b) The financial status of TechInnovate Inc.
c) The basketball game.
d) Strategies for maximizing the creditor’s recovery in the matter.

Answer 49

The basketball game.

In such a casual and unrelated setting, Daniel must avoid discussing any confidential or sensitive information about TechInnovate Inc.’s legal matter especially since the creditor is represented by their own lawyer. Daniel may engage in general conversation topics, such as the basketball game, but must remain vigilant about maintaining client confidentiality and avoiding conflicts of interest or breaches of professional conduct. Source: RPC 7.2-6– 7.2-7

Chapter 11: Duty to others, 3. Duty to lawyers and others, 3.3.1 Communications with persons associated with a represented organization and commentaries

Question 50

Daniel, a corporate lawyer specializing in bankruptcy and insolvency, is approached by Ms. Harper, the CEO of TechInnovate Inc., a public corporation governed by the Ontario Business Corporations Act (OBCA), which is facing financial difficulties and considering filing for bankruptcy. Ms. Harper seeks Daniel’s expertise to represent TechInnovate Inc. throughout the bankruptcy and insolvency process to ensure that the interests of the corporation and its stakeholders are protected.

Question 5: How long does Daniel have to maintain records related to client identification and verification for this matter?

a) 2 years.
b) 6 years.
c) 10 years.
d) Indefinitely.

Answer 50

6 years.

A lawyer is required to keep identification and verification records for a period of 6 years following the completion of the work for which the lawyer was retained. Source: By-Law 7.1, ss. 23(12.1)– (15).

Chapter 11: Duty to others, 3. Duty to lawyers and others, 3.7 Records