The following analysis applies when a licensee is considering what is involved in meeting their obligation to maintain client confidentiality in accordance with the Code of Professional Conduct (the “Code”). The rules with respect to confidentiality extend from a licensee’s duty of loyalty to their client and are foundational to client trust.
Confidentiality is different from the statutory rule of privilege. Confidentiality is the ethical duty many professionals have to not disclose information related to their representation of a client. Confidentiality may be waived by the client or, in some instances, there may be a court order compelling the production of certain information and/or documents. Privilege, however, is a legal duty not to disclose information and/or documents. The disclosure of privileged information cannot be compelled. While privileged information is always confidential, confidential information may not always be privileged.
The statutory rule of privilege was recently considered by the court in Janssen Inc. and Mitsubishi Tanabe Pharma Corporation v. Sandoz Canada Inc., 2021 FC 1265. Note that the interpretation of this decision may vary among those who read it. Licensees should be mindful of the requirement under Rule 1-5 of the Code that they stay current on both developments in case law relating to their practice, and the law as it relates to patent agent privilege and trademark agent privilege specifically. For more information on Rule 1-5, please see our previous ethics analysis piece.
Confidentiality has a broader application than privilege. As mentioned above, information that is privileged is also confidential, but not all confidential information is privileged. The Court in Janssen sets out what information and/or documents will be subject to privilege in an agent-client relationship. Interpretations of what the Court stated with respect to when privilege applies has been the subject of some discussion among the profession and may vary.
When it comes to the ethical rules relating to the duty of confidentiality, licensees should be aware that confidentiality applies as soon as a licensee is asked for advice or assistance on a matter invoking their professional knowledge, even if the licensee does not ultimately agree to represent the person. There are limited circumstances in the rules where there is implied consent for the licensee to share the confidences of their client, such as with others in their firm.
The following example is based on an inquiry the College received from a member of the public.
An inventor (client) contacts the College, concerned because their agent at Firm X has shared confidential information of the client with one of the other licensees working at Firm X. The client wants to know whether the rules with respect to confidentiality extend to others in their agent’s firm.
The Principle of Part 2 of the Code states that “[a]n agent has a duty to preserve the confidences and secrets of their clients.”
The rule with respect to confidentiality in the Code provides:
An agent must hold in strict confidence all information concerning the business and affairs of the client acquired in the course of the professional relationship and must not disclose such information unless the disclosure is expressly or impliedly authorized by the client, required by law or by order of a court or otherwise permitted or required by this Code (Rule 2-1).
The commentary to the rule states that an agent has an implied authority, “unless the client directs otherwise, [to] disclose the client’s affairs to partners, associates, administrative staff and other individuals in the agent’s firm.”
The Commentary goes on to state that
this implied authority to disclose [a client’s affairs to partners, associates, etc. at the agent’s firm] places the agent under a duty to impress upon such individuals the importance of such non-disclosure (both during their employment and afterwards) and requires the agent to take reasonable care to prevent their disclosing or using any information that the agent is bound to keep in confidence (see Commentary to Rule 2-2).
The Code of Conduct also provides at Rule 7-7 that a licensee “has complete professional responsibility for all business entrusted to them and must directly supervise staff and assistants to whom they delegate particular tasks and functions.”
The College advised the inventor client who had made the inquiry that the licensee has a professional obligation to ensure the client’s secrets are kept confidential. While a licensee may share their client’s confidential information amongst those with whom they practice (unless the client has expressly said they do not consent to the licensee doing so), the licensee bears the responsibility for ensuring that they impress upon their colleagues that the information is confidential.
For their part, licensees should be aware of their obligations to safeguard their clients’ secrets, as this obligation is an extension of the duty of loyalty owed by licensees to their clients.
In addition to the licensee’s duty to impress upon any colleagues with whom the licensee shares information that they themselves must not disclose the confidential information, licensees have an explicit requirement under the Code to supervise their staff. The Code states that the licensee has complete professional responsibility for their business. This means that the licensee should take care through appropriate supervision to ensure their clients’ confidentiality is preserved through a licensee’s practice.
Ultimately each Licensee must determine what means and safeguards they will employ in order to adhere to their professional obligations. It is up to the licensee to exercise their own professional judgement in any given circumstance. Through the Ethics Inquiry process, we are happy 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.