Professional Responsibility & Ethical Issues for Tax Lawyers

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The Ontario Bar Association hosted the event “Professional Responsibility & Ethical Issues for Tax Lawyers” on Monday. Professor Colin Campbell kicked-off the program by discussing the core ethical and professional considerations in giving tax opinions.

Legal opinions may be oral, implied, or written. An opinion refers to a statement as to what the court will decide, based on an informed judgment.

A client may sue a lawyer for three types of behaviour:

1) breach of a contract (the standard of care is implied);

2) breach of a fiduciary duty (like conflict of interest); and

3) tort (intentional and/or negligence).

The duty of care owed by a lawyer to his client could be defined by the retainer, and is generally limited to the material issues to the engagement. However, any privative clauses will be construed strictly against the person claiming the disclaimer.

The standard of care owed by a lawyer to his client is that of a competent lawyer. A competent tax lawyer understands the relevant legislation, case law, and the views of the Canada Revenue Agency. Lawyers have a duty to refer their clients to a specialist when they do not have the necessary competence to complete a task.

A third party may also sue a lawyer in tort. For negligence to be established, the third party must show  proximity between the lawyer and the third party.  A duty of care to third parties could arise when third parties rely on the mere existence of a lawyer’s opinion.

In providing legal opinions, lawyers must clearly outline where factual assumptions were made. It is best practice to obtain written confirmation from the client regarding the relevant factual assumptions. Some factual assumptions may be mixed fact and law, like residence.

Professor Campbell ended his presentation by reminding us that lawyers have a duty to be candid to their clients by providing honest, independent, and objective advice.

 

 

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