Gordon Wallace’s lawsuit to collect damages from the railways for overcharging farmers has hit a snag.
But Wallace’s lawyer said the suit will continue, one way or another.
In late September a Saskatoon judge ruled that McKercher LLP, the law firm representing the Unity, Sask., farmer, can’t act against Canadian National Railway.
The judge said because McKercher has represented CN in unrelated legal matters, it creates a conflict of interest that disqualifies McKercher from representing Wallace.
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He also said McKercher is privy to confidential information about CN as a result of its lawyer-client relationship.
McKercher has appealed the ruling to the Saskatchewan Court of Appeal. No date has been set.
Joel Hesje, the McKercher lawyer handling the case, said the legal action will continue, regardless of the outcome of the appeal.
“This doesn’t mean CN has effectively put an end to this lawsuit,” he said.
“I believe Mr. Wallace’s action will continue. Whether we will play any role in it remains to be seen.”
If McKercher loses its appeal, it would have to decide whether to pursue the case against the three other defendants: Canadian Pacific Railway, the government of Canada and the Canadian Transportation Agency.
“We have to make sure Mr. Wallace and the class get the best representation,” Hesje said.
“It may make more sense to have all the defendants together. That’s something we’ll have to wrestle with.”
It’s Wallace’s prerogative to get another law firm to take over the case, he added.
Wallace couldn’t be reached for comment.
In his 37-page ruling against McKercher, judge M. D. Popescul accepted CN’s arguments and concluded that allowing McKercher to continue would represent a conflict of interest and raise the risk of misuse of confidential information about CN to which McKercher has been privy.
He said McKercher has breached its “duty of loyalty” to CN.
Evidence indicated that as of Dec. 1, 2008, two weeks before the lawsuit was filed, McKercher was representing CN in a personal injury claim and a real estate matter and was registered as CN’s power of attorney in Saskatchewan.
McKercher argued that because the matters were unrelated to the Wallace lawsuit, it shouldn’t be considered a conflict of interest.
It also argued that numerous law firms in Saskatchewan act for CN at various times, and
McKercher accounted for only a small percentage of CN’s legal dealings in the province.
The appeal also alleges the judge made numerous legal and factual errors in reaching his decision and failed to take into account evidence submitted by McKercher.
