THE CODE OF ETHICS
REVIEW AND REVISION COMMITTEE

REPORT TO BENCHERS:
GUIDELINES FOR ETHICS AND THE NEW TECHNOLOGY

    
REPORT AND RECOMMENDATIONS

In response to a request from Benchers, the Code of Ethics Review and Revision Committee has considered the Guidelines for Ethics and the New Technology originally developed by the Law Society of Alberta and endorsed by the Federation of Law Societies of Canada at its Annual Meeting in August 1999.

The Committee is of the view that the Guidelines are not intended to change the ethical principles and rules governing the legal profession in Newfoundland and Labrador. Rather, the Guidelines seek to ensure that practitioners are aware that already existing principles and rules are applicable to the new technology. The Committee is satisfied that the Guidelines provide useful guidance for practitioners and, in recommending the Guidelines for adoption, subject to some minor changes incorporated in the appended text, the Committee has added, as preliminary material to each Guideline, reference to ethical principles which the Committee considers to have particular relevance. The choice of preliminary material is not intended to be exhaustive and practitioners who use the new technology are encouraged to do so in a manner which is sensitive to all professional and ethical obligations.

The Committee is also proposing two substantive amendments to the Society's Code of Professional Conduct to ensure that the Code adequately addresses issues which have been raised by its consideration of the Guidelines.

Therefore, the Code of Ethics Review and Revision Committee unanimously recommends to Benchers that Benchers adopt the Guidelines for Ethics and the New Technology in the form appended to this Report as Schedule A and that the following consequential amendments be made to the Society's Code of Professional Conduct:

So that Benchers may have a record of the discussions leading up to these Recommendations, the Committee appends the Minutes of its meetings to this Report.

SCHEDULE A

Guidelines for Ethics
and the New Technology

TABLE OF CONTENTS

Part 1      Technology and the Duty of Competence

Part 2       Practicing Law on the Internet

Part 3      Confidentiality and the Internet

Part 4      Software Piracy

Part 5      Advertising

Part 6      General

Appendix I      Software Piracy

Part 1:    Technology and the Duty of Competence

The Rule in Chapter II of the Code of Professional Conduct provides that

(a)  The lawyer owes the client a duty to be competent to perform any legal services undertaken on the client's behalf.

(b)  The lawyer should serve the client in a conscientious, diligent and efficient manner so as to provide a quality of service at least equal to that which lawyers generally would expect of a competent lawyer in a like situation.

Therefore, a lawyer must maintain a state of competence on a continuing basis in all areas in which the lawyer practices. This includes maintenance and improvement of knowledge and skills.

With the ever-increasing impact of technology on the practice of law, a lawyer using technology must either have reasonable understanding of the technology used in the lawyer's practice, or access to someone who has such understanding. As well, certain endeavors in the practice of law may require a lawyer to be technologically proficient. For example, it might be imprudent to handle a complex child/spousal support case without recourse to support calculation software; similarly, it might be imprudent to handle a complex litigation matter involving a large number of documents without litigation support software.

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Part 2:    Practising Law on the Internet

1. Upholding the law of other jurisdictions.

The Rule in Chapter XVII, Practice by Unauthorized Persons, requires a lawyer to assist in preventing the unauthorized practice of law. Commentary 1 of Chapter XVII provides:

1.     Statutory provisions against the practice of law by unauthorized persons are for the protection of the public. Unauthorized persons may have technical or personal ability, but they are immune from control, regulation and, in the case of misconduct, from discipline by any governing body. Their competence and integrity have not been vouched for by an independent body representative of the legal profession. Moreover, the client of a lawyer who is authorized to practise has the protection and benefit of the lawyer-client privilege, the lawyer's duty of secrecy, the professional standards of care that the law requires of lawyers, as well as the authority that the courts exercise over them. Other safeguards include group professional liability insurance, rights with respect to the taxation of bills, rules respecting trust monies, and requirements for the maintenance of compensation funds.

Therefore, a lawyer authorized to practise in this Province who practises law in another jurisdiction by providing legal services through the Internet must respect and uphold the law of the other jurisdiction, and must not engage in unauthorized practice in that jurisdiction.

2. Privileged communications

The Rule in Chapter XVI, Responsibility to Lawyers Individually, requires that a lawyer's conduct toward other lawyers should be characterized by courtesy and good faith. The Rule in Chapter IV, Confidential Information, requires a lawyer to hold client information in strict confidence and not to divulge it without the client's consent or as required by law or required or permitted by the Code of Professional Conduct.

Therefore, a lawyer who comes into possession of a privileged written communication of an opposing party must not use the communication nor the information contained therein in any respect and must immediately return the communication to opposing counsel, or if received electronically, delete the communication from the system. This includes communications received through e-mail.

3. Conflict of Interest

Chapters V, Va, and VI deal with Conflict of Interest. To ensure that there is no breach of the obligations to avoid conflict of interest when delivering legal services using the Internet or e-mail, a lawyer must determine the actual identity of parties with whom the lawyer is dealing.

4. Capacity in which Lawyer is Acting

Commentary 6 to Chapter VI, Conflict of Interest Between Lawyer and Client, provides that a person who is not otherwise a client of a lawyer may be deemed to be a client for the purpose of the Rule against lawyer-client conflict of interest if such person might reasonably feel entitled to look to the lawyer for guidance and advice in respect of a transaction. In those circumstances, the lawyer must consider the person to be a client and will be bound by the fiduciary obligations between solicitor and client. The onus is on the lawyer to establish that the person was not looking to the lawyer for guidance and advice. Also, Commentary 8 to Chapter XIX, Avoiding Questionable Conduct, imposes an obligation on a lawyer not to undertake to advise an unrepresented person and to urge the person to obtain independent legal advice. If the person does not do so, the lawyer must take care to see that the person is not proceeding under the impression that the lawyer is protecting the person's interests.

Therefore, where there may be confusion as to the capacity in which a lawyer is acting, the lawyer must ensure that such capacity is made as clear as possible to anyone with whom the lawyer deals.

A lawyer who communicates with others in chat rooms, discussion groups or otherwise through electronic media such as the Internet must advise others participating in the communication when the lawyer does not intend to provide legal services.

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Part 3:      Confidentiality and the Internet

The Rule in Chapter IV, Confidential Information, provides:

The lawyer has a duty to 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 such information unless disclosure is expressly or impliedly authorized by the client, required by law or otherwise permitted or required by this Code.

Commentary 6 on Privilege in Chapter VIII, Preservation of Clients' Property, provides:

The lawyer should be alert to claim on behalf of clients any lawful privilege respecting information about their affairs, including their files and property if seized or attempted to be seized by a third party. In this regard the lawyer should be familiar with the nature of clients' privilege, and with relevant statutory provisions such as those in the Income Tax Act, the Criminal Code, the Canadian Charter of Rights and Freedoms, and other statutes.

A lawyer using electronic means of communication must ensure that communications with or about a client reflect the same care and concern for matters of privilege and confidentiality normally expected of a lawyer using any other form of communication. This would include e-mail, whether via the Internet, internal e-mail or otherwise, or the use of cellular telephones or fax machines to transmit confidential client information.

First, both the lawyer and the client can choose to use an electronic means of communication, including the Internet, cellular telephones and fax machines, as a means of communication in the solicitor-client relationship. The use on the part of the client or the lawyer may be said to be an implied invitation to use or respond via the same electronic means.

Second, while initially there seems to have been much debate on this topic, the better view today is that there is no basis to conclude that Internet communications are any less private than those using traditional land-line telephones. There does not seem to be a ready and apparent danger that e-mail is less confidential than fax machines or cellular telephones, so anyone using the Internet to communicate has a reasonable and justified expectation of privacy, and it cannot be said as a simple rule that a lawyer must encrypt anything that the lawyer believes the client would not want to read in the local newspaper.

Third, lawyers communicating on the Internet without encrypting their transmissions do not violate the principle of confidentiality. While encryption makes theft or interception more difficult, even strong encryption can be technically defeated. The vulnerability to theft and interception therefore remains. However, in ordinary circumstances, a lawyer is not expected to anticipate the criminal activity of theft of solicitor-client communications on the Internet any more than mail theft.

The use of e-mail and other electronic media presents opportunities for inadvertent discovery or disclosure of messages, given the manner in which information:

1.     is transmitted within the network systems of an Internet;

2.     is kept as a permanent record if conscious efforts are not made to delete those messages and thereby destroy the prospect of discovery or inadvertent disclosure.

A lawyer using such technologies must develop and maintain a reasonable awareness of the risks of interception or inadvertent disclosure of confidential messages and how they can be minimized.

Encryption software is available and must be used, if electronic means of communication are used, for those confidences that may be so valuable or sensitive that it is in the client's interest to take the extraordinary step of encrypting to protect them. The challenge, as in so many ethical areas, is to recognize those extraordinary situations and exercise sound judgment in relation to them.

When using electronic means to communicate in confidence with clients or to transmit confidential messages regarding a client, a lawyer must:

1.     develop and maintain an awareness of how technically best to minimize the risks of such communications being disclosed, discovered or intercepted;

2.     use reasonably appropriate technical means to minimize such risks;

3.     when the information is of extraordinary sensitivity, advise clients to use encryption software to communicate with their lawyer, and use such software; and

4.     develop and maintain such law office management practices as offer reasonable protection against inadvertent discovery or disclosure of electronically transmitted confidential messages.

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Part 4: Software Piracy

Software piracy is illegal and therefore unethical. The Code of Professional Conduct contains several relevant provisions. As software piracy is a form of theft, it engages the principle of integrity discussed in Chapter I, Integrity. It also engages the lawyer's professional duties to meet financial obligations and to observe a proper standard of conduct as contained in Chapter XIX, Avoiding Questionable Conduct, Commentaries 7 and 10.

Lawyers must maintain a standard of competence in their practice and ensure that those they employ or train act in a competent fashion. They must therefore ensure that support staff and students-at-law are aware of applicable licensing provisions. The management and organization of and compliance with licence agreements for all software used by a firm must not be left entirely in the hands of an office manager or support staff.

A lawyer can guard against accidental software piracy by carefully reviewing the provisions of the software licensing agreements for software used in the office. Where strict compliance with the licensing agreement may work a hardship, exemption must be sought from the licensor.

The Software Publishers Association suggests the following steps to staying "legal":

1.     Appoint a software manager.

2.     Create and implement a software policy and code of ethics.

3.     Establish software policies and procedures.

4.     Conduct internal controls analysis.

5.     Conduct periodic software audits.

6.     Establish and maintain a software log of licences and registration materials.

7.     Teach software compliance.

8.     Enjoy the benefits of software licensing compliance.

9.     Thank employees and students for participating.

 

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Part 5: Advertising

1. Applicability of the Society's Rules and Code of Professional Conduct to Electronic Media

Advertising by lawyers either directly or through a medium or agent should be interpreted to include electronic media, including web sites, network bulletin boards, and direct e-mail. Advertising is governed by Part VIII, Professional Practice Rules, of the Rules of the Law Society and by Chapter XIV, Advertising, Solicitation and Making Legal Services Available. The reader is also directed to Part 2 of these Guidelines.

General -- An advertisement is a form of provision of information contemplated by Part VIII.

Part VIII and Chapter XIV contain restrictions on advertising content which are directly applicable to electronic advertising and govern advertising initiated through new technology. For example, there is a requirement that advertising be factual, accurate, verifiable, in good taste, not misleading, and compatible with the respected profile of the Society and the legal profession (Rule 8.03). While a lawyer may advertise a preferred area or areas of practice, there is a restriction against claiming status as a specialist, expert, or leader, or that the lawyer is an established or experienced practitioner in any field of practice or generally (Rule 8.10). A lawyer must retain a copy of every advertisement or brochure published or broadcast for one year and provide a copy or recording of same to the Society upon request along with a written record of when and where the publication or broadcast was made (Rule 8.13).

2. Identification of Lawyer in Internet Communications

Electronic media are different from more traditional methods of communication because distribution of the advertisement is not limited geographically, nor is access to it always restricted or focused to a particular group of users. In these circumstances, there is an enhanced potential that a viewer of a network bulletin or web site might view an advertisement and be confused as to a lawyer's identity, location, or qualifications.

A lawyer making representations in generally accessible electronic media must include the name, law firm, mailing address, licensed jurisdiction of practice, and e-mail address of at least one lawyer responsible for the communication's content in the communication.

3. Multi-jurisdictional Advertising

Where a lawyer is entitled to practice in more than one jurisdiction, and these jurisdictions are identified in representations on electronic media, that lawyer must ensure that the advertisement complies with the advertising rules governing legal advertising in each of those jurisdictions.

4. Restrictions on Indiscriminate Distribution

Some forms of direct solicitation via electronic media can produce widespread and unwanted communication. Part VIII permits direct solicitation of potential clients, with detailed restrictions (Rule 8.05(1)) and prohibitions against persistent or harassing advertising or advertising directed at a potential client where the lawyer knows or ought reasonably to know that the emotional or mental state of the person is such that the person could not make a reasoned decision in relation to the provision of legal services (Rule 8.05(2) and (3)).

The Committee considers that the following provisions are examples of interactions with the public which are not compatible with the best interests of the profession, the administration of justice and society generally:

1.     Advertisement of professional services using electronic media where the advertisement is directly and indiscriminately distributed to a substantial number of newsgroups or electronic mail addresses.

2.     Posting of electronic messages to newsgroups, listservs or bulletin boards whose topic scope does not include the proposed advertisement.

3.     Advertisement of professional services using electronic media where the advertisement substantially interferes with another's use of the media or invades the privacy of other users.

A lawyer's advertising activity is further governed by the provisions of these guidelines which directs that a lawyer in conducting the business aspects of the practice of law must adhere to the professional and business standards of the community. Where indiscriminate electronic distribution of advertising information is unacceptable in the general business community that makes use of technology, the largely unwritten business practices governing conduct will apply to the advertising lawyer.

Part 6: General

When interpreting these guidelines, the lawyer should have reference to the Rules of the Law Society and the Code of Professional Conduct. Like the Rules and the Code, these guidelines should be understood and followed in their spirit as well as in the letter.

The details of the fact situations in which the Rules, the Code, and these guidelines apply will change as technology changes, but the principles of ethical professional conduct will not.

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Appendix I:      Software Piracy

What is software piracy?

Software piracy is the unauthorized copying, reproduction, use or manufacture of software products. Microsoft defines "copying" as: (1) downloading software (reproducing it) on your computer's temporary memory by running the programs from a floppy disk, hard disk, CD ROM, or other storage material; (2) downloading software onto another media such as a hard disk (e.g. a diskette) or your computers hard disk (your computer's main information storage area); or (3) using software which has been placed on your office's network server.¹

Software piracy is not contingent upon the value of the software copied. The unauthorized copying of a $10 computer game and the unauthorized copying of a $1,000 office management suite are both acts of software piracy.

Piracy does not include the sale of software in accordance with the terms of transfer characteristically contained in a license agreement.

How does software piracy occur?

There are several ways in which software can be pirated. Counterfeiting occurs whenever software is duplicated and sold by a person and in a manner not authorized by the owner as if it were the genuine article. Softlifting occurs whenever a single copy of the genuine article is purchased but it is then copied onto several computers, contrary to the terms of the license agreement. Hard-disk loading occurs when you purchase a computer which already has software copied onto its hard disk, contrary to the terms of the manufacturer's licensing agreement. A "certificate of authenticity" is not a license agreement.

Bulletin-board piracy occurs when software is placed on a BBS (Bulletin Board Service -- on the Internet) and it is downloaded onto a hard disk, contrary to the terms of the manufacturer's licensing agreement.² Software rental occurs when software is rented or borrowed (like a videotape) for temporary use, contrary to the terms of the licensing agreement.³

Pirating can occur whenever copying occurs. A person who receives e-mail containing contraband software is now in possession of pirated software.

1      Microsoft Licensing Policies: Answers to Frequently Asked Questions, p. 1.

2     Note that some public domain software, "freeware" (software offered by the manufacturer for free use by anyone) and some forms of "shareware" are available via the Internet without licensing restrictions.

3     A recent amendment to the Copyright Act permits rental software only where the owner expressly authorizes it.

Are software licensing policies standardized?

The short answer is, NO! There are at least 4 general types of licences (also referred to as "end user licence agreements" or "EULA's") used in the software industry:

Node-locking -- a form of licence that restricts use of software to a particular computer only. While many may use the software, it can only be used on that computer;

User-based licensing -- a form of licence that restricts use to a particular user only, commonly through some form of password. While anyone with the password may use the product, only that person can access the software at that time;

Site licensing -- a form of licence that restricts use to a particular site or geographical area, such as an office;

Network licensing -- a form of licence that restricts (or the cost of licensing is calculated on) a particular number of users of the software. When usage exceeds a particular number of users, another licence must be paid for. This form of licence is generally used by larger corporations using many different forms of software.

Each of these licence forms may also make use of an expiration date, which can further limit its use. Each agreement must be scrutinized in order to ensure compliance with its individual terms.⁴ While there is some controversy over the "shrinkwrap licence", it is certainly far from clear that this form of licensing agreement is always unenforceable.⁵

4      QL Systems Limited's licensing agreement, for instance, places restrictions on the user's ability to store information downloaded from its databases. A QL Contract Addendum provides that:

The Customer may save temporarily in machine-readable form within local storage medium forming part of the Customer's terminal equipment retrieved documents for non-consecutive periods of no longer duration than one-half hour for the purpose of printing single copies of those retrieved documents on a printer attached to the Customer's local terminal equipment. The Customer shall not save or permit any third party to save any database or any part thereof for use with any information retrieval or storage program operated on equipment forming part of the Customer's local terminal equipment or on any computer facility other than QL's computer facility. The Customer shall not retain nor permit any third party to retain for any period longer than one-half hour on magnetic or optical disks, diskettes, tapes, cassettes or other storage media any copy of any database or of any part thereof.

5      Many "shrinkwrap licence" transactions are actually sales, as opposed to licences. Since the licence agreement has not been introduced until after the purchase (or the contract) has been consummated, it may not be enforceable. This notion is problematic, however, and will depend on a variety of circumstances, including the nature of licensed use, price, the computing platform and competitors' actions.

Is software piracy illegal?

Yes. The Copyright Act, R.S.C. 1985, c. C-42, protects a developer or owner's intellectual property rights in all software created by her/him. The owner has the exclusive right to produce, reproduce or publish the work or any substantial part thereof. Copying software is illegal, regardless of whether the copied software is thereafter offered for sale, is given away free, or is retained for the copier's own use.⁶ The copyright also exists automatically upon creation. That is to say, it is not necessary for the creator to place the mark ©, the words "copyright", "All rights reserved", or any other words for the software to receive copyright protection.

Copyright infringement can result in liability for any damage caused to the copyright owner (including lost profits).⁷ Software piracy is also an indictable offence punishable by up to 5 years imprisonment and/or a fine of up to $1 million.⁸

Are any of these provisions enforced?

Yes. Software publishing is a multi-billion dollar industry. Software piracy has become a substantial industry as well. It has been estimated that more than $8 billion worth of software is pirated annually; more than $1 billion of which occurs in the United States alone.⁹ With such substantial losses, concerted efforts are being made to enforce copyright and licensing provisions relating to software. These efforts include education of software users and the public at large, creation of an anti-piracy hotline, software audits and civil lawsuits against offending businesses or individuals. The Software Publishers Association (SPA) embarked upon an anti-piracy campaign in 1990 and reports that its efforts have resulted in more than $16 million in penalties since then.¹⁰ Enforcement actions have not been limited to the United States.¹¹

7        Copyright Act, s. 35.

8       Copyright Act, s. 42

9       Software Publishers Association (SPA). SPA Education: Administrator Advice,  p. 1.

10    Ibid. SPA Increased Action Taken Against Software Pirates by 23% in 1995,  p. 1.

11   The SPA reports that, as of July 16th, 1996, it had filed lawsuits against 21 organizations in Canada for illegally renting software programs. 5 such lawsuits had been brought in 1995. See ibid. SPA Sues 21 Canadian Software Rental Stores, p. 1.

12    Copying Software is Illegal, SPA Education: Administrator Advice, p. 1.

Fortunately, the software industry appears to be moving towards more flexible methods of licensing designed to accommodate a variety of highly individual circumstances.¹² Use measurement software is available and is a viable alternative for the very large corporation or law firm.

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