Conflicts Between Lawyer & Client - General Prohibition and Certain Exceptions continued

You may obtain a financial interest in a client, in place of receiving a fee, provided you comply with the provisions of the BC Code (See Chapter 3, rule 3.4-30).

If you wish to acquire a financial interest in a client of the firm, you must:

  • do so through the facilities of a stock exchange; or
  • the client must acknowledge in writing:

         a) that you are not representing them in the acquisition;

         b) that they will not rely on your advice regarding the matter; and

  • the client must receive independent representation in all aspects of the acquisition.

(See the BC Code, Chapter 3, rules 3.4-28 to 3.4-30)

The BC Code also prohibits you purchasing anything from, or selling anything to, a client unless the transaction is clearly severable from legal work performed by the firm for the client and:

  • the transaction is of a routine nature to and in the ordinary course of business of the client; or
  • the client is independently represented in all aspects of the transaction.

The concept of a transaction being of a routine nature to and in the ordinary course of business of a client extends also to the general prohibition against you borrowing money or obtaining credit from a client of the firm, or obtaining a benefit from any security or guarantee given by the client (BC Code, Chapter 3, rule 3.4-31). So if your client is a bank or credit union, then obviously you can borrow money or obtain credit from the client; but if your client runs a hot dog stand, you must not borrow money from the client unless the client is separately represented on that borrowing transaction.