Mediatube Pushes the Envelope: Ineffective Assistance of Counsel as a Ground of Appeal in Civil Litigation

The case of Mediatube Corp v. Bell Canada began as a high stakes patent case, with a claim for more than $350 million in damages for infringement of Mediatube’s Internet Protocol Television technology patent. However, five years into the litigation, with Mediatube’s loss at trial headed to the Federal Court of Appeal, the case has turned out to be more about litigation process than complex issues of patent law. In the latest of a series of unexpected twists (including a mid-trial concession by Mediatube that Bell had not infringed its patent), the appeal has now veered into entirely new territory – raising the question of when “ineffective assistance of counsel” is a valid ground of appeal in civil matters.

Ineffective assistance of counsel has a long history as a ground of appeal in criminal cases. In that context, it is based on an accused’s right to effective counsel – a right that is set out in the Criminal Code and recognized as a principle of fundamental justice under the Canadian Charter of Rights and Freedoms. However, even in the criminal context, the bar is high. In order to succeed on this ground of appeal, an accused must overcome the “strong presumption” that their counsel’s conduct fell within the “wide range” of reasonable options. There are obviously good reasons for such a high bar. As the Federal Court of Appeal recognized in this case, if it were otherwise, it would be all too easy for litigants on the losing end, “armed with 20/20 hindsight” and “fueled by disappointment”, to argue that the loss was because of the lawyers and that the trial decision should therefore be set aside.

In the context of civil appeals, the considerations are quite different. Typically money, not liberty, is at stake, and Charter rights are rarely implicated. Thus, to the extent that a litigant is unsuccessful because of their lawyer, there are a number of avenues available, such as an action in negligence or a complaint to a law society. Unlike an appeal, these processes have the advantage of maintaining the finality of the original decision. They also focus on what is truly at stake – the relationship between one party and their lawyers – and leave the opposite side out of the subsequent dispute. Courts have held that, in the civil context, a decision can be overturned on the basis of ineffective assistance of counsel in only the rarest of cases -- where a party can prove that their lawyer was actually incompetent and that the incompetence resulted in a “miscarriage of justice.”

In Mediatube Corp. v. Bell Canada, 2018 FCA 127, Mediatube sought to amend its notice of appeal to add the ground of “ineffective assistance of counsel.” The basis for the alleged ineffective assistance was an alleged conflict of interest. Mediatube argued that after filing its notice of appeal, it learned that its trial counsel also represented Microsoft (who allegedly had a connection to Bell’s infringing technology) in several trademark filings. As a result, it argued that its trial counsel was conflicted in its representation of Mediatube and failed to sufficiently represent its interests. For the purposes of the amendment to the notice of appeal, the question was whether the allegation could possibly succeed. On behalf of the Federal Court of Appeal, Justice Stratas held that it could not. In particular, there was no evidence that Mediatube’s trial lawyers were even aware that their firm had filed trademark applications on behalf of Microsoft.

Although he rejected the argument in this case, Justice Stratas sought to develop the law in this area. In an analysis that borrows heavily from criminal cases, Justice Stratas arguably expanded the circumstances in which ineffective assistance of counsel can be a valid ground of appeal in the civil context. On the basis of R v. Neil, 2002 SCC 70, Justice Stratas held that when counsel’s conflict of interest is only discovered after the trial is over, it can be relied on to support ineffective assistance of counsel as a ground of appeal. He also adapted the test to the criminal context – the appellant “must show more than a possibility of conflict of interest; while actual prejudice need not be shown, the appellant must demonstrate the conflict of interest and that the conflict adversely affected the lawyer’s performance on behalf of the appellant.” Also, on the basis of criminal cases, Justice Stratas rejected Bell’s argument, being that any alleged conflict was irrelevant because Mediatube would have lost anyways. In doing so, he departed from the Federal Court of Appeal’s 2004 decision in Hallat v. Canada, 2004 FCA 104, in which the court rejected ineffective assistance of counsel as a ground of appeal in part because they were not convinced the result would have been any different. In this case, Justice Stratas held that as long as Mediatube could prove that there was an actual conflict of interest and that the conflict adversely affected its counsel’s performance, the outcome of the trial was irrelevant – the conflict itself provided the “miscarriage of justice” required to overturn the decision.

The decision appears to have extended the bounds of ineffective assistance of counsel as a ground of appeal in civil cases. While courts have accepted that an actual conflict of interest can support a ground of ineffective assistance of counsel in the criminal context, those conflicts (e.g., a lawyer representing co-accused) seem far more acute than the sorts of conflicts that arise on a daily basis in large corporate law firms. The test set out by the Court in this case – a conflict of interest that adversely affected counsel’s performance, without any requirement that there was any actual effect on the result – may well open the door to litigants seeking a redo of trials that did not go their way, even in the absence of any errors of fact or law.

Going forward, it will be interesting to see how civil litigants and courts grapple with the question of how ineffective assistance of counsel should be dealt with – in separate proceedings for professional negligence, through law society disciplinary proceedings, or, like Mediatube has done, through an appeal of the original decision. For now, the Mediatube appeal continues, albeit without any allegation of ineffective assistance of counsel as a ground of appeal.

This article first appeared in The Lawyer’s Daily, and is reproduced by kind permission of LexisNexis Canada.

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