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Rule 6 – Withdrawal of services when surrendering a licence

The following analysis applies where a licensee is surrendering their licence because they are unable to continue their practice or are retiring from practice. Surrendering a license in such circumstances would trigger some of the obligations a licensee has with respect to withdrawal of services under the CPATA Code of Professional Conduct (the “Code”).

The Scenario

The Code of Professional Conduct sets out rules with respect to when a licensee can withdraw from a matter. A licensee who is planning to retire or can no longer practice must ensure their practice is closed in a way that protects the interests of their clients. The Code is instructive with respect to the obligations that are triggered when a licensee withdraws their services.

The Rule

The Code states that “an agent must not withdraw from the representation of a client except for good cause and on reasonable notice to the client” (Principle of Rule 6). The two criteria here are: good cause and with reasonable notice.

The Code then provides at Rule 6-2 that “an agent may withdraw when withdrawal is justified by the circumstances” and states that “circumstances that may justify…withdrawal include…(f) the agent is unable to continue with their practice or retires from practice.” In other words, being unable to continue practicing or retiring from practice may constitute good cause.

The Code also sets out a number of obligations a licensee has in order to meet the reasonable notice requirement. Those obligations are set out below.

CPATA’s Advice

In circumstances where withdrawal is justified (or for “good cause”), agents must then look to how the withdrawal must be executed in order to preserve their clients’ interests. As the Code sets out, the clients’ interests are paramount, and for any ongoing matter, an agent must do whatever they can to minimize any prejudice to their clients (see Rule 6-4).

One way to minimize the risk of prejudice to clients is for the licensee to ensure that they provide reasonable notice to their clients, as is required by the principle of Rule 6. The Commentary to Rule 6 states that

no hard and fast rules can be laid down as to what constitutes reasonable notice before withdrawal and how quickly an agent may cease acting after notification will depend on all  relevant circumstances.

While the above commentary sets out that what constitutes reasonable notice is contextual, the Commentary goes on to state that on withdrawal an agent must
  1. Notify the client in writing, stating
    1. That the agent has withdrawn,
    2. The reasons for the withdrawal, and
    3. In the case of a hearing, that the client should expect that the hearing or trial will proceed on the date scheduled and that the client should retain a new agent promptly;
  2. Deliver to the client all papers and property to which the client is entitled;
  3. Subject to any applicable trust conditions and undertakings — or, in Quebec, subject to any applicable conditions for the preservation in trust of any monies or other property entrusted to the agent by a client and to any applicable undertakings — give the client all relevant information in connection with the matter;
  4. account for all funds of the client held at that time or previously dealt with, including the refunding of any remuneration not earned during the representation;
  5. promptly render an account for outstanding fees and disbursements;
  6. cooperate with the successor agent in the transfer of the file in a manner that minimizes expense and avoids prejudice to the client; and
  7. comply with the applicable rules of the CIPO office or offices involved.

Typically, a notice to clients should advise that it is the client’s right to choose representation. If a licensee has arranged for another agent to take over their files, it should be made clear to the client that it is their option to choose whether to have their file transferred to the new agent, change their representation to an agent of their choosing or choose to self-represent.

With respect to former clients for whom the licensee may be the agent on record at CIPO, best efforts should be made to reach the former clients with the notice as set out above.

The Code provides that when an agent withdraws from representation, “the relevant CIPO office, opposing parties, foreign agents and any other directly affected by the withdrawal must also be notified of the withdrawal” (see Commentary to Rule 6). Notifying CIPO should occur as the last step, after the licensee has provided notice to current and former clients as set out above. If, after the licensee notifies CIPO, they receive “an official communication on the matter to which a response must be filed in order to avoid abandonment of the matter”, the licensee should “endeavour to report the official communication in a timely manner to the former client in order to avoid prejudice to that client” (see Rule 6-5).

Ultimately each licensee has to decide what the correct course of action is that will protect client interests and adhere to their professional obligations. Every circumstance is unique and it is up to the licensee to exercise their own professional judgement. But through the Ethics Inquiry process, CPATA’s professional conduct experts are available to help interpret the Code as part of the process of risk-assessment and ethical analysis.

We look forward to receiving more inquiries and providing more guidance to licensees. It helps us identify areas where further information or analysis might be instructive and it will help to inform our consultation on the Code, which will be rolling out in early 2023.

If you are a licensee with a question regarding professional conduct and your responsibilities under the Code, fill in our Ethics Inquiry Form.