The Alberta Court of Appeal has provided much-needed clarity on a question at the center of the lawyer-client relationship: when a law firm works closely with a corporate executive, does that executive become the firm’s “client,” or “near client,” even if the firm was retained by the company?
The answer, as set out in Piikani Nation v. McMullen, 2026 ABCA 189, has real implications for how businesses, their employees and law firms manage their relationships, providing guidance on significant issues important to the legal community and the public regarding the law on disqualification, privilege and the duties, responsibilities and obligations owed by a law firm or lawyer. Dentons represented The Advocates’ Society as an intervener in the appeal.
Background
Mr. McMullen was a senior officer and director of Piikani Investment Corporation (PIC) and Piikani Energy Corporation (PEC), both owned and controlled by Piikani Nation. During his time in those roles, Mr. McMullen was the main point of contact between the companies and Gowling WLG (Canada) LLP, which acted as corporate counsel.
The Piikani Nation sued Dale McMullen and others in 2010, alleging various forms of misconduct relating to another separate, but connected lawsuit. Mr. McMullen sued Piikani Nation in 2011, seeking indemnification for solicitor-client legal fees in relation to his defence of the lawsuit pursuant to an indemnification agreement.
Years later, a lawyer who represented Piikani Nation in the lawsuit against Mr. McMullen moved to Gowling and brought the case files with them. Mr. McMullen subsequently filed an application arguing that Gowling had a disqualifying conflict of interest and should be removed from the case. His argument, in essence, was that because he had worked so closely with Gowling while running PIC and PEC, the firm owed him the same duties it would owe a client – duties that would prevent it from turning around and suing him.
What happened at first instance
The case management justice agreed with Mr. McMullen, at least in part. While acknowledging that Gowling had no confidential information belonging to Mr. McMullen personally, and that his one unrelated personal file with the firm (a small employment matter closed in 2008) had no connection to the lawsuit, the justice concluded that Mr. McMullen was a “near client” of Gowling. A “near client” is someone who, while not formally retained, is closely enough connected to the lawyer that some duties normally owed to clients may apply. On that basis, the justice disqualified Gowling and directed it to provide Mr. McMullen with access to files from the period when he was providing instructions on behalf of PIC and PEC.
The appeal: Four errors
The Alberta Court of Appeal reversed the decision, finding that the case management justice made four significant legal errors.
First, the case management justice treated Mr. McMullen as a “near client” simply because he was the key contact between the companies and the law firm. The Court of Appeal firmly rejected this reasoning, stating that “the person who instructs external counsel on behalf of a corporation or other entity is not, without more, a client, a near client or a former client.”[1]
Second, the case management justice had characterized PIC as a corporation “closely held” by Mr. McMullen, which would blur the line between the company and the individual. However, PIC and PEC were closely held by Piikani Nation and not Mr. McMullen, who was an officer and director of the companies and not an owner. The Court emphasized that a corporation is a separate legal entity from its officers and directors, and any confidential information or legal privilege belonged to the companies, not to Mr. McMullen personally.
Third, the case management justice misapplied a legal test from an earlier conflicts case, Gainers Inc v. Pocklington, 1995 ABCA 177, using it to determine whether someone was a client or former client when the test was actually designed to address whether a firm can act for a current or former client against someone who was never its client. The test does not grant a “client” or “former client” status to someone who was never a client, but addresses the exceptional circumstances of disqualifying a lawyer from acting against someone who was never a client.
Fourth, once the case management justice labelled Mr. McMullen a “near client,” he applied conflict of interest rules designed for former clients—effectively treating the two categories as interchangeable. The Court made clear they are not: a “near client” does not enjoy the same protections as a client or former client.
Takeaways
This decision offers several takeaways for clients who work with lawyers in a commercial context:
- Being the primary contact for a company’s lawyers does not create a client relationship. Executives, managers and directors who regularly interact with outside counsel on behalf of their employer should understand that the lawyer’s duty of loyalty and confidentiality runs to the company, not to them individually. The Court was explicit: even becoming very familiar with a corporate contact does not create a client relationship.[2]
- Confidential information and legal privilege belong to the company. Solicitor-client privilege of corporate clients belongs to the company and not the corporate contacts. A former officer or director cannot claim ownership of, or access to, the legal files of a company they once worked for. Only current management acting in the corporation’s best interests can waive the company’s legal privilege.
- Courts should be cautious about disqualifying lawyers. Removing a law firm from a case is a serious step — it affects the firm, its lawyers and, most importantly, the client’s right to choose its own counsel. The Court warned that an overly broad approach to disqualification “will have an impact on delivery of legal services to the public, particularly by larger law firms.”[3]
- Corporate contacts cannot claim a duty of loyalty. Lawyers owe a duty of loyalty to their clients and former clients—not to corporate contacts. It is questionable that an ongoing duty of loyalty to a former officer could co-exist with the firm’s duty to the companies themselves.
The Alberta Court of Appeal’s decision in Piikani Nation v. McMullen reinforces a fundamental principle: in the corporate world, there is a line between a company and the people who work for it. Law firms owe their duties to the entity that retained them, and a corporate officer’s close working relationship with a firm does not, on its own, give rise to the duties that apply in a solicitor-client relationship.
For more information on this topic, please reach out to Lillian Pan, KC, Kelly Osaka or Emily Zheng.
[1] Piikani Nation v McMullen, 2026 ABCA 189 at para 42.
[2] Piikani Nation v McMullen, 2026 ABCA 189 at para 44.
[3] Piikani Nation v McMullen, 2026 ABCA 189 at para 70.
