This Week in Legal Ethics – New Ethics Ruling

August 1, 2018

By Melanie Hodges Neufeld

The Law Society’s Ethics Committee recently released the following Ethics Ruling as guidance for the profession. For your convenience, I’ve listed the ruling below but it can also be found in our Ethics Rulings Database.

If you have any questions or concerns  regarding this post, please contact the Law Society at (306) 569-8242 or 1-833-733-0133.

 

Date:                           June 26, 2018
Cite as:                       2018 SKLSPC 3
Classification:          Conflicts of Interest – Joint Retainers, Rule 3.4-5
Practice Area:          Real Estate

Facts

This was a request for Ruling by Lawyer X.  Lawyer X requested the assistance of the Ethics Committee regarding the commentary [3] to Rule 3.4-5 of the Code of Professional Conduct which states that “[n]otwithstanding any other provisions of the Code of Professional Conduct, a lawyer shall not act for both the builder or developer and the purchaser in a real estate transaction resulting from the construction of a new home, even if the parties consent.”

Lawyer X’s client, a home builder, wants to provide an incentive to purchasers to buy its homes by providing the legal and ISC costs associated with the purchase at no charge to the purchaser.  This would be facilitated by Lawyer X who would also be acting for the Purchaser.

Lawyer X understands that this provision was put in place to prevent situations where a lawyer acting for a Builder and a Purchaser also acts for the Purchaser’s lender, which could result in possible disputes regarding loan advances and hold backs for deficiencies.

Ruling

The Ethics Committee reviewed Rule 3.4-5 of the Code of Professional Conduct including commentary [3] and found that the commentary was clear and should not give rise to confusion or disagreement in the legal community; a lawyer is not allowed to represent both the builder or developer and the purchaser in a real estate transaction resulting from the construction of a new home.

Lawyer X’s proposal is not allowed under the Code of Professional Conduct.  The Ethics Committee determined it is not in a position to grant exceptions to the Code of Professional Conduct.