Mr Justice Thomas McEwen found that Cassels was acting for both General Motors dealers and the Canadian government at a time when the dealership was restructuring under the Companies' Creditors Arrangement Act. The firm had agreed to act for the government on proceedings under the Act, said the judge.
Two trains on the same track
David Sterns, a partner in Sotos in Toronto, said: 'When you look at what went on in May 2009 and the need these dealers had to be represented, then layer on to it the conflict of interest, it was going to be two trains coming down the same track and that’s why there was a significant damages award made.'
Knew about conflict
The judge said: 'Cassels knew about this conflict from the outset; yet, rather than declining to act for the GMCL dealers and referring to an unconflicted law firm, or even telling the dealers about the retainer with the Federal Government, continued to act for both the Federal Government and the dealers.'
Acted properly
John Birch, counsel for Cassels, said: 'Of course, we are disappointed. But we remain confident that we conducted ourselves properly and in accordance with our professional responsibilities.' Source: Canadian Lawyer
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