INST Committee Report
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CHAPTER 3
DISCLOSURE AND TRANSPARENCY
Most witnesses expressed the view that the current disclosure requirements of the Act are sufficient and represent a good balancing of the fundamental principles. A significant number, however, did suggest that the system could benefit from increased disclosure. However, there was little consensus as to exactly what that disclosure should include.
Interestingly, all three types of lobbyists seemed to feel that their own disclosure rules were sufficient, but should be broadened for other groups. In-house (Organization) lobbyists, represented primarily by Democracy Watch, suggested that transparency would be improved with greater disclosure from Consultant and In-House (Corporate) lobbyists. Consultant and In-House (Corporate) lobbyists, for their part, suggested that what was required was greater disclosure from In-House (Organization) lobbyists:
These people should be registered. You should know where their money comes from. You should know whether they are funded by government and in any way and by how much. The fact that some of them don't register on the pretext that there's no formal salary structure and they don't get a salary, that they're volunteers, I think is very dangerous. It's a loophole which would permit those of independent means to avoid obligations imposed on taxpayers who work for fees or a regular paycheque. [Peter Clark 15:10:00]
The Committee is mindful of the principle that only that information which is material to the objective of the Act, that is to say, information required to maintain effective transparency with respect to activities of paid lobbyists, should be disclosed. Requiring more information because it "might" tell us something runs the risk of overburdening the system by imposing onerous disclosure requirements for information having little real relevance or value in assessing the scope or nature of lobbyists' activities. The Committee is also mindful of the need to protect the confidentiality of commercially sensitive or personal information that is not material to the issue of transparency.
The Ethics Counsellor expressed his view that the information currently required is sufficient:
…We've struck a pretty good balance in terms of the information. We get very few complaints that the information on the registry is not sufficient to determine who has been hired and what is the purpose of their representations. I find as a practical matter that there's often an attitude that if some information is useful, then more information is better. I do believe the Committee should be very conscious of any proposition that comes to the table about vastly expanding the amount of
information required, and use the test of the preamble. A case may be made for more information, but my view is that in 1995 the committee did a very good job of restructuring this Act dramatically. That's not to say there's not a case to be made for honing the act, but I don't think we're at the point where we need to contemplate major restructuring. [Howard Wilson 5:16:55]
…An enormous burden on our public service, which is already anorexic. [Sean Moore 14:16:05]
…In terms of logs, I sift through information all the time, and too much is just the same problem as too little. [John Chenier 14:16:00]
A proposal that received considerable debate was the possibility of creating a dual reporting system that would require, in addition to the existing registration requirement, that persons inside government report their contacts with lobbyists. The idea is not a new one:
This was debated the last time and it had two aspects to it. One was whether or not public-office holders should be required to say to a lobbyist, are you a lobbyist, have you registered? It was felt that… it was an obligation on the part of the lobbyist to do this rather than having public-office holders act as a point of enforcement. [Howard Wilson 5:17:10]
As an alternative, several witnesses supported the concept of a limited dual-disclosure system, one that would require that only certain more senior civil servants be required to report lobbying contacts:
The disclosure…should be tied to decision-making power of the civil servant. So you have to draw a line somewhere and we believe that it's possible to draw a line and you don't have to go down right to the frontline person because that frontline person will be reporting to someone who has decision-making powers. [Duff Conacher 8:16:25]
This approach presents practical difficulties, the most obvious being where do we draw the line? In reality, decisions are more often made institutionally than individually:
If you do target officials who are approached in an effort to influence policies, those in question are rarely senior officials. You need to realize how government works. There are people, often professionals, who put information together and assess the status of the situation. [Pierre Morin 15:09:55]
As well, many witnesses expressed the view that the effect of such a system would be significantly higher compliance costs without necessarily creating any corresponding improvement in transparency:
We think a requirement such as this would again impose a pretty onerous burden on government officials. It would also be highly impractical, given the nature of Canada's parliamentary system. If the intent of this is to strengthen compliance with the Act, then we believe a requirement on the part of the public servants to ensure that lobbyists are registered in order for a meeting, or any other form of communication, to take place, would be more effective than establishing a dual disclosure system. [Jayson Myers 7:09:15]
While arguments were made both in favour of and against the proposition, the Committee is of the view that creation of a double disclosure system would not be justified. The system would certainly be considerably more costly than at present. Currently, a lobbyist is required to indicate what department he is speaking with and the subject matter of the discussion. Critics assert that this is not enough information, that it does not permit the public to form a true impression of precisely what is going on, of what information is being exchanged, of the policy positions that are being advanced. But this ignores the many other sources from which information is available, including for example Internet Web sites or access to information requests. Hillwatch.com used the example of the GMO food debate to illustrate how the Internet can potentially open the public policy debate:
The theory behind this is that if you really want to know who's saying what on the issues you're debating, and what issues are being debated inside governments and so on, you really can go to the Internet to find out. If you put them together in an organized fashion and in a meaningful fashion, think of what it gives the public. Think of what it gives you in terms of making your job more meaningful. If you wanted to find out what's going on with GMO foods, you could find all the representations that have been made on GMO foods over the last years, and all the converging and the diverging points of view. [Michael Teeter 15:10:10]
Scott Proudfoot explained how the Internet has forced many organizations to make their policy views public:
The anti-GMO food activists use the Internet to attack the mainstream corporations. The mainstream corporations, which didn't know what hit them, frankly, all of a sudden found they had to really respond in public and defend their position. If you go to their corporate sites now, or if you go to their association sites, there's a lot of good, reliable information, there's a lot of self-interested information, there's a lot of scientific evidence, and there's a lot of fear-mongering. There's a whole potpourri of information that you can find on the issue. Four or five years ago, you wouldn't have seen any of this information. Now it's all largely publicly accessible. Basically, beyond the Lobbyists Registration Act, we think the Internet is really pushing the whole industry to be a heck of a lot more public and transparent where people can find it. [Scott Proudfoot 15:10:15]
As well, considerable information can often be had from government departments for the asking:
If I were going to be making a presentation for the Department of Finance, then everyone is aware of that. The media can pick up the phone and contact the department and say, "Mr. Scott is contacting you on a particular issue. May we have some more details?" There are access to information criteria that then kick in, in terms of what should or should not be disclosed depending on what the issue is. The same with Members of Parliament, the same with committees. If…someone from the Department of Finance was appearing here, you could say…: "I understand Mr. Scott contacted your department and can you enlighten us more in terms of what the issues are?" [John Scott 12:09:35]
Another potential source of information, which was alluded to but not explored in detail, is the Access to Information Act. For example, a request might be made for all correspondence directed to a department on a particular bill or contract, a list of meetings that were held and with whom, etc. A great deal of information about meetings involving departmental officials might be available by access to information requests, although these requests are generally determined on a case-by-case basis.
The best argument in favour of a dual-registering system is that, theoretically, comparing the information between the two sources would reveal unregistered lobbying contacts. The Committee heard evidence both for and against such a system. The main argument against is that it would increase enormously the amount of information in the registry. This might be justified were it to lead to greater transparency. But determining this question depends on what such a system would reveal: certainly, it would reveal any discrepancies between reports coming from inside and outside the bureaucracy. Some portion of those discrepancies might be deliberate, done with the intent of avoiding detection; however, such discrepancies might just as easily ? and perhaps more commonly ? result from innocent misinterpretation of the rules.
On balance, the Committee is of the view that the creation of a dual disclosure system would be unlikely to result in real benefit to the public or the industry in terms of increased transparency; at the same time, requiring disclosure of the name of each person (or even only of persons with "decision-making power") contacted would certainly greatly increase the compliance burden and the strain on the registry resources. Moreover, who can say with any certainty where "decision-making power" resides in government? Small procurement contracts, for example, may be awarded without being reviewed "up the ladder" by a senior decision-maker. Determining the "cut-off" would be difficult, perhaps impossible in the complex web of modern government where a single decision may involve many officials or committees working at different levels of the bureaucracy. For all these reasons:
Recommendation 15:
The Committee is of the view that the creation of a dual-disclosure i.e. a system that would require public office holders to report having been contacted by a lobbyist, would result in significantly increased compliance cost with little, if any, improvement in transparency; for that reason, the Committee does not recommend that the Act be amended to create a dual-disclosure system.
2. Identifying Individual Contacts
Another proposal that was discussed would require lobbyists to indicate not only the department, but also the names of the individuals with whom they spoke. The Ethics Counsellor responded:
This is a proposal that, in all fairness, troubles me…. I'm a strong believer that public servants in this country should be as open as possible to Canadians who want to go and talk to them about their responsibility. Some of these will be lobbyists, who are then required to register, and others will be just average citizens. I think it very important that public servants, in carrying out their responsibilities, be open to consultation, and so on. I think if all senior public servants were required to register just exactly who they were talking to, it would have an unintended consequence, which is that there would be fewer conversations than I think are probably desirable. That's a fear, and I think the committee will want to debate that. [Howard Wilson 5:17:00]
The possible perverse effect of "naming names" was echoed by Linda Gervais:
I believe that if we had to reveal the names of the people receiving our calls, they might not be so open and might hesitate to call us back because they would have certain concerns. We want an open process. I think the results of such a thing would be the opposite of what we are looking for. I think it would be an incentive for some people to not call us back, to not provide us with information and to not be open…It is human nature. [Linda Gervais 15:09:25]
GRIC made the point that focussing the attention on individuals within the bureaucracy misses the point of what the Act aims at:
…Let’s deal with what the lobbyists are all about, let's not focus on what the individual public servants are doing in terms of various levels of activity on the file. …The issue isn't one of cost but the issue is one of let's deal with the situation and the project and the file that is engaging our clients [Tony Stikeman 12:09:35]
These sentiments were supported by John Scott:
…Getting into filing every single name of every single person that we might meet with in government, administratively is a problem and I think it is adequately covered under the current situation. [John Scott 12:09:35]
There appears to exist among the public an impression that the goal of lobbying is to aim high and, ultimately, to get that elusive "meeting with the Minister." But this appears to be too simple a picture. What is perhaps more important to a lobbyist is to get the attention of the people who advise the Minister, even down to the individual policy analyst who prepares internal memoranda for purposes of policy discussion. But this raises the concern of what would happen if a trusted policy advisor should be misled by a convincing lobbyist? The Minister (or any other policy or law-maker) might not get all the information needed to make good decisions. But this view certainly fails to give due credit to the judgment and intelligence of departmental policy advisors. The Ethics Counsellor responded to this concern by drawing on his own experience as a public servant:
I've spent all of my career in the public service. I spent most of it in the foreign service and in trade policy. I was certainly lobbied continuously. I felt that was actually part of my responsibilities. I found it very dangerous to take merely one point of view in terms of trying to put advice forward to my Minister. I tried to keep things as open as possible so that I could speak to as many people as possible in order that the advice I gave to Ministers, which ultimately was the decision, was the best possible advice. So I found it essential to keep those lines open. [Howard Wilson 5:17:00]
Witnesses were mixed in their views. Brian Grainger expressed the debate succinctly:
I honestly don't know if it's in the public interest to know that sort of thing… Whether or not you need to know the name of some frontline supervisor in…who got lobbied — I don't see the need, personally….What may be at issue here…is do we need the information? The lobbyist is already required, company, corporate, In-House, whatever, to give you some information about what he or she is doing. I think there's enough public policy information there around this issue. …[Brian Grainger 8:16:25]
The Committee is of the view that requiring the disclosure in the lobbyists registry of individual names would not provide any significant improvement in transparency, and could, in fact, impede free communications between public office holders and lobbyists; at the same time, it would considerably increase compliance and enforcement costs. Accordingly:
Recommendation 16:
The Committee does not recommend that the Act be amended in order to create a requirement that the names of individuals who have been lobbied be disclosed in the lobbyists registry.
As indicated above, a number of witnesses expressed the view that the accountability of In-House (Organization) lobbyists would be enhanced by the disclosure of more information pertaining to their governance structure and sources of funding. The Canadian Manufacturers and Exporters (CME), for example, recommended that organizations be required to disclose the legal status of the organization, its ownership and or governance structure, the purpose of any federal funding, and the source and purpose of any foreign funding, and that they be required to ensure that the names of all employees engaged in lobbying activities be registered under the Act, and that the lobbyists registration database allow for a search of organizations based on the names of employees.
For the same reasons that the Committee is satisfied that that current disclosure requirements are sufficient to ensure the purpose of the Act is achieved, it is also of the view that greater disclosure on the part of In-House (Organization) lobbyists is not warranted. As such,
Recommendation 17:
The Committee is satisfied that the current disclosure requirements for In-House (Organization) lobbyists is sufficient and, for that reason, does not recommend any changes to the current disclosure requirements in this respect.
It is a widely-held misconception that lobbyists achieve results simply by spending money; and the more they spend, the better their results. For that reason, some witnesses suggested that lobbyists should be required to disclose how much they and their clients are spending on a particular lobbying campaign.
However, most witnesses agreed that the characterization of lobbyists "spreading money around the Hill" is far too simple a characterization of what lobbyists really do. One need only recall the thwarted merger plans of the major banks to understand that spending a lot of money on lobbying activities is no guarantee of achieving results. At the same time, it is quite possible to mount a successful lobbying campaign on a shoestring budget, particularly in the age of the Internet.
Several questions must be addressed when discussing spending disclosure: First, would it genuinely increase transparency in the system? And second, what would it cost to comply? What would it cost to administer? And how would it impact on business confidentiality?
All witnesses agreed that lobbyists spend money in different ways depending on the nature of the assignment:
…In Canada the services of lawyers, lobbyists and consultants vary from firm to firm and from individual to individual. Some chiefly provide representational services; others place emphasis on providing their clients with information only. Still others offer a full-service continuum, in terms of monitoring, analysis and a number of other things that ranges from a complete continuum of activity, only a small portion of which is lobbying: actually making contact with public officials. [John Scott 12:09:20]
Representatives of Democracy Watch explained how organizations such as Democracy Watch spend their funds:
… It would include the staff time, preparing materials, research reports, things like that. [Duff Conacher 8:16:35]
While most witnesses did not support the concept of spending disclosure, the Committee is of the view that a mere "show of hands" should not determine its response to this important issue. More fundamentally, the Committee foresees difficulty with the concept of disclosing spending for the simple reason that the very act of attempting to quantify lobbying expenditures is a process fraught with uncertainty, as likely to mislead as to inform. How would that figure be arrived at? Would it include, for example, a pro rata portion of the administrative costs of the firm, such as secretarial assistance or even photocopying? Sean Moore discussed the U.S. experience with spending disclosure:
…It got very silly very quickly because you had industry associations that had to calculate what percentage of their light and heat and parking was attributable to lobbying activity. The numbers very quickly became meaningless. [Sean Moore 14:17:00]
Simply disclosing a monetary figure without providing any details of how that figure was arrived at would be unlikely to provide meaningful disclosure. Moreover, the costs of administering and complying with the system would certainly increase.
Still, this is not to say that the proposal is without some merit. For example, guidelines could be developed to indicate what lobbying expenses must be disclosed. As such:
Recommendation 18:
Although the evidence presented to the Committee was mixed, it is possible that requiring lobbyists to disclose the amounts that they spend on lobbying campaigns could lead to greater transparency. For that reason, the Committee recommends that the proposal be made the subject of further study by the Department in consultation with stakeholders.
In addition to disclosing the money spent on lobbying campaigns, some witnesses suggested that lobbyists should be required to disclose their fees. Consultant and In-House (Corporate) lobbyists expressed concern about this proposal:
GPC sees no public benefit associated with the disclosure of fees and is strongly opposed to any suggestions that consultants and lobbyists should be obliged to disclose fees. Those who would promote the merits of this suggestion sometimes refer to disclosure requirements in the United States as a meaningful precedent. However, based on discussions with our American colleagues and a review of how disclosure works in practice in the United States, we believe that fee disclosure does not add transparency to their system. [John Scott 12:09:20]
Some members of the Committee felt that it might be useful to have fee disclosure. What was lacking in the debate, however, was a definitive statement of how, exactly, that information would be useful. The Committee is of the view that, before making such a major departure from the Act as originally passed by Parliament, the case for fee disclosure would have to be made more convincingly than was the case in these hearings.
Moreover, requiring fee disclosure could have rather serious implications for the billing practices of some lobby firms. Sean Moore explains:
My own experience — and I know I'm ridiculed by my colleagues in the government relations business when I say — that the main objection to fee disclosure in the government relations business is that a lot of them don't want to know how little they charge certain clients. That to get clients in the door they may only charge $2,000 or $3,000 a month, but they're charging someone else $9,000 a month for essentially the same thing. That's a powerful incentive not to have a financial disclosure, but for the exact opposite reasons than you'd think. [Sean Moore 14:17:00]
The Committee is aware that the public policy and government relations consulting industry operates in a very competitive market, much like any other service industry in Canada today. Lobbying remains a legitimate activity and is an important instrument to ensure the efficient flow of information in the process of public decision making. The
Committee is of the view that fee disclosure is not a desirable option for a number of reasons:
- Fee disclosure targeted at only one industry would constitute discrimination. Such discrimination might be justifiable were it to promote the attainment of an important policy objective. However, the evidence is by no means clear that greater transparency would result;
- Increased compliance and administrative costs;
- Requiring fee disclosure may be contrary to s. 20 of the Access to Information Act, a provision that prohibits government from disclosing information that could reasonably be expected to result in a material financial loss to, or gain to, or prejudice to, the competitive position of, or interference with, the contractual or other negotiations of a third party. Accordingly;
Recommendation 19:
The Committee is satisfied that the current disclosure requirements are satisfactory and, for that reason, does not recommend that the Act be amended in order to require that lobbyists disclose their fees.
Currently, contingency fee arrangements are not prohibited under the LRA. Lobbyists are permitted to operate on the basis of contingency fees except where the matter relates to procurement or grant of funds from the Government of Canada i.e. where a client will derive some benefit from the government with respect to procurement, or a grant of funds. Section 5(2)(g) of the LRA requires that lobbyists declare at the time of filing whether they are receiving contingency fees.
For similar reasons expressed above with respect to fee disclosure:
Recommendation 20:
The Committee is of the view that the current disclosure requirements are appropriate and adequate and, for that reason, does not recommend that the Act be amended with respect to contingency fees.
7. Tax Deductibility of Lobbying Fees
The issue of tax deductibility of lobbying fees was also discussed. The Committee is of the view that taxation policy is an issue properly within the purview of the Minister of Finance. Some witnesses proposed that the deduction for lobbying expenses be eliminated since, looked at one way, it is "a public subsidy for wealthy special interests to influence the democratic process" [Democracy Watch 8:15:45]. Consultant Lobbyists disagreed:
…This is an indirect way to suggest that lobbying fees are not a legitimate business expense like legal, accounting or management consulting services. If we all truly endorsed the four guiding principles of the Act, especially the principle that lobbying public office holders is a legitimate activity, then this initiative is patently not an appropriate suggestion.…And in addition, if deductibility were removed, it would make the costs of having professional public policy counsel involved giving reasoned representation to government on the many complex issues...it would all be compromised and that, I suggest, would not be in the best interests of Parliamentarians or of the public service and it would be an undeniable step backward in a process that has evolved positively in the last 15 years. [John Scott 12:09:30]
The Committee is of the view that federal taxation policy with respect to business expenses is a question that is dealt with in the Income Tax Act, and is properly within the mandate of the Minister of Finance. While the issue will certainly have an impact on lobbying, it is clear that the Committee’s review of the Lobbyists Registration Act does not extend to the Income Tax Act. For these reasons:
Recommendation 21:
The Committee does not view the issue of the tax deductibility of lobbying expenses to be within its current mandate and, for that reason, makes no recommendation on the issue.
8. Solicitor-Client Confidentiality
The last witness appearing before the Committee was the Canadian Bar Association. The CBA recommended certain measures be taken to avoid any potential conflict between the disclosure requirements under the Act and a lawyer’s duty of confidentiality to clients. The CBA emphasized that it was not seeking an exemption for lawyers from the duty to disclose, except in the case where disclosure would compromise the professional obligation of confidentiality. The CBA recommended that section 4(2) of the Act be amended to read as follows:
4.(2) The Act does not apply in respect of…
(c) any oral or written submission made to a public office holder by an individual on behalf of any person or organization where confidentiality is required by law.
The CBA suggested that "there can be no serious objection to the proposed amendment. Any objection could easily be overcome by a requirement that lawyers not disclosing information on ethical grounds would instead indicate their non-disclosure on those grounds in their filing with the Registrar."
Mr. Simon Potter (Second Vice-President, Canadian Bar Association) acknowledged that the conflict was unlikely to arise often:
I expect this conflict to arise very infrequently but it is rapidly imaginable and plausible that there are situations in which the dilemma occurs to lawyers and when it does, lawyers, I think, must know from the statute that their paramount obligation is to protect the privilege which is their oath to protect. [Simon V. Potter 21:15:40]
To understand how conflict might arise, it is first important to understand the nature of solicitor-client privilege:
…It is not all communication with the client, but it is all communication meant to lead to, or obtain legal advice from, a lawyer or legal representation by the lawyer… What I learn from my client, I must disclose only as my client instructs. Even if a law tells me to disclose it, I must not disclose it. [Simon V. Potter 21:15:50]
This is an important point: only the client can instruct the lawyer to disclose the privileged information. If the client instructs the lawyer not to disclose, the lawyer must respect the client’s instructions and keep the information confidential. So how does conflict arise between the duty to disclose a client’s identity for the purpose of the registry and the duty not to disclose confidential information? Mr. Potter gives an example:
I can imagine that I might be in court arguing that a particular statute — let's say a taxing statute — means x rather than y and that is the debate in court. And I'm representing someone who has a very large liability at stake, depending on whether it is x or y that that statute means, and the statute is ambiguous. And at the same time I am lobbying in order to get legislative clarification to that statute. It might be very harmful to my client in that litigation for it to come out that that client is actually looking for the legislative change on an ongoing basis… It may be interpreted as an admission that the law really does mean y rather than x. I can imagine that really hurting my client. [Simon V. Potter 21:16:00]
Mr. Potter provided a second illustration:
…you can imagine a family law situation in which there's a fight, for example, over custody. Someone might want to lobby for a legislative change, or a policy change, or a change to a regulation in how elementary pension is calculated, and that person is actually in court at the same time. It deprives that person from the right to go and lobby if it is going to expose that person to the information coming out that he really does think that the law is ambiguous enough that it does not favour him in his ongoing position in court. [Simon V. Potter 21:16:00]
The Committee does not share the CBA’s views for several reasons: first, the lobbyists registry does not require that the lobbyist disclose in the registry the substance of the client’s submissions; as such, there is no danger that those submissions will be used as evidence in court against the client. Moreover, even if the substance of the client’s position were to be available, the Committee is of the view that the Canadian judiciary is sufficiently intelligent to recognize that a party may rely on different arguments in different venues. In fact, parties to a lawsuit frequently ? in fact, usually ? advance "alternative" arguments in their pleadings. Alternative arguments are clearly identified by the phrase "in the alternative, it is submitted that…." Courts deal with these arguments in exactly the manner they are offered ? as alternatives ? not as mutually exclusive or contradictory positions.
Secondly, although the CBA did not bring it to our attention, the Committee is mindful that the rules governing confidentiality are not absolute. Certain exceptions are set out, for example, in the Ontario Rules of Professional Conduct:
The lawyer at all times shall hold in strict confidence all information concerning the business and affairs of the client acquired in the course of the professional relationship, and should not divulge any such information unless expressly or impliedly authorized by the client or required by law to do so.
When disclosure is required by law or by order of a court of competent jurisdiction, the lawyer should always be careful not to divulge more information than is required.
As is clear from these rules, a lawyer is permitted to disclose information when required by law to do so. There are other examples in federal law where lawyers are required to disclose information, for example, in the recently enacted amendments to the Proceeds of Crime (Money Laundering) Act. In cases like this, a lawyer facing disciplinary action for disclosing confidential information would be able to rely for his defence on the fact that the law required the disclosure.
The CBA proposed that, instead of registering the client, the lawyer/lobbyist might merely register their non-disclosure on the grounds of confidentiality in their filing with the Registrar. The Committee does not view this as a satisfactory solution. Permitting lawyers to merely state that "I object to disclosing my client’s identity for reasons of privilege" instead of actually registering would have at least two detrimental effects. Most obvious is the fact that it would thwart the purpose of the registry, which aims at identifying clients to the public; the second point is the potential for abuse of the privilege. Privilege belongs to the client; the lawyer may assert the privilege on behalf of the client, either of the lawyer’s own initiative, or if the client instructs the lawyer to do so. The lawyer is required to do so in either case. If the lawyer cannot in good conscience follow those instructions, the lawyer must no longer represent the client and refer the file elsewhere.
There is no doubt that if the client does not give you the lawyer the right to disclose the name, then the lawyer under the current statute should not be doing the lobbying….[Simon V. Potter 21:16:10]
The Committee is concerned that, in the amendment proposed by the CBA, there is nothing to prevent any client, or indeed every client, from shielding his identity merely by advancing a claim of privilege.
The Committee is mindful of the concern expressed by the CBA that the duty to disclose a client’s identify may place the lawyer in a conflict of interest and that in rare instances this may result in the client being required to engage different counsel:
When it would be harmful for the client to have the client's identity disclosed or other piece of information…and the client cannot bring himself or herself to waive that obligation of privilege…. Should it be that the lawyer must absolutely refuse to represent that client? ….a lawyer has an ethical obligation not to just drop a client. [Simon V. Potter 21:16:05]
The conflict situation described by Mr. Potter is a very rare occurrence. He noted that he himself has never encountered the issue in representing over 10,000 clients throughout his career. The Committee’s response to the recommendation must balance the urgency of the problem against the risks posed by the solution. On balance, the Committee is of the view that the disclosure required by the LRA is unlikely to materially prejudice litigants in court proceedings. At the same time, the amendment proposed could be used in an improper fashion to defeat the purpose of the registry. In some rare cases, then, litigant/clients might be put to the additional expense of retaining separate counsel to represent their interests in one of the two proceedings. Accordingly:
Recommendation 22:
The Committee is of the view that, while the requirement to disclose a client’s identity could, in rare cases, cause can see some hardship to a litigant in a court proceeding, maintaining the integrity of the lobbyists registry is a more pressing policy objective and, on that basis, the Committee does not propose to amend the Act to create an exception based on solicitor-client privilege to the general registration requirements.
In conclusion, with respect to current disclosure requirements, the Committee is satisfied that the current disclosure regime represents the correct balance in view of the fundamental principles set out in the Act and, for that reason does not recommend any changes to the current disclosure requirements for lobbyists.