MALPRACTICE: Some Observations on Lawyer Discipline in Ontario April 7, 2019 Jeffrey W. Lem Director of Titles for the Province of Ontario Bencher of the Law Society of Ontario Part I: Introduction Part II: Miscellaneous Discipline Points 1. The Nature of the Complainants 2. The Proceedings Authorization Committee 3. Conduct Unbecoming 4. Good Character 5. Capacity vs Conduct Part III: Conduct that Lawyers are Being Disciplined For 1. Failure to Respond 2. Teraview Matters 3. Failure to Supervise 4. Trust Account Mismanagement 5. Failure to Serve 6. Advertising Price 7. Misleading Advertising 8. Incivility 9. Referral Fees 10. False Affidavits Part IV: The Hierarchy of Discipline 1. Letter of Advice 2. Invitation to Attend 3. Undertakings 4. Regulatory Meeting 5. Conduct Application 6. Interlocutory Suspension Part V: Conclusion 1 Part I: Introduction to Lawyer Discipline in Ontario The term, “malpractice” is not commonly used in Ontario, it being a more popular term stateside, but it is an excellent descriptor of the wide array of activities that the Law Society governs and enforces as a matter of discipline. The term, “malpractice” is imprecise, even in those jurisdictions that actively use the term, and probably includes both negligence as well as professional misconduct (and, as we shall see, the line between the two can often blur), but this article will focus entirely on professional misconduct rather than professional negligence per se. As a bencher of the Law Society of Ontario, I have had the privilege of sitting on the Proceedings Authorization Committee (“PAC”) for my entire time at the Law Society. It is a unique and ideal vantage point from which to observe professional misconduct since all matters that proceed to discipline must first be presented to, and ultimately authorized by, PAC. I have been asked to provide this article on lawyer discipline for the Federation of Ontario Law Association’s Practice Resource website. It is based on a similar, slightly narrower (in context) paper to be delivered at the 16th Annual Real Estate Law Summit hosted by the Law Society. Given the genesis of the article, there is a slight real estate flavor to the text, but the article is intended for all Ontario lawyers, regardless of practice area and regardless of sector (yes, in-house and public sector lawyers can also be disciplined for malpractice!). In terms of style, I have left it relatively “breezy” and somewhat deliberately bereft of detailed examples or rule citations (details of discipline examples makes the paper unnecessarily “personal”, and rule citations are easy enough to find if one really needs to know the exact wording of a given prohibited conduct). This article has three substantive sections. Firstly, there is a discussion of some miscellaneous comments on discipline, including a discussion on the likely nature of complainants, some observations about the role of PAC, the requirement for good character, and “conduct unbecoming”, a form of malpractice that occurs outside of the practice of law. Secondly, there is a discussion of some of the discrete types of conduct that Ontario lawyers are being disciplined for (although, curiously, files rarely manifest as discrete malpractice occurrences – more often, a lawyer subject to discipline has breached several rules at once). These are not the “top” malpractice events in terms of severity – those are more obvious and do not require much in the way of observation (e.g. criminal conduct, misappropriation of money, sexual offences, conflicts of interest, etc.). Likewise, the matters discussed in this section of the paper are not the “top” malpractice events in terms of frequency -- those too are relatively obvious and do not require much in the way of observation (e.g. failure to report, failure to pay fees, failure to meet CPD requirements, etc.). Given the fluid nature of website publication, I am hoping to grow this section of the paper over time, as more discipline matters of interest cross my plate. Finally, this paper concludes with a discussion of what I call the “hierarchy of discipline” – in effect, a summary of, and observations on, the progressive discipline remedies available to the Law Society in responding to malpractice. This is a useful read for all lawyers. Part II: Miscellaneous Discipline Points 2 1. The Nature of the Complainants Although clients and former clients are, by far and away, the most common complainants, the Law Society receives complaints from more than just clients. Depending on the nature of the alleged malpractice, the complainant could be a law partner, spouse or other family member, employee, competitor, opposing counsel, creditor, broker (or other business-related professional), judge, police officer, etc. In the context of real estate, I should note that the Office of the Director of Titles can also be a complainant. While information on complaints and investigations are confidential (so the Law Society does not notify the Office of the Director of Titles of pending discipline proceedings that may relate to land registration), the same is not true the other way around – the Office of the Director of Titles will report Teraview abuses and other misconduct to the Law Society and, as necessary, to the police. 2. The Proceedings Authorization Committee All matters serious enough to require a regulatory response beyond a staff letter will be referred to PAC, an unusual committee of the Law Society comprised entirely of benchers (ironically, hearing panels deciding discipline matters at the Law Society Tribunal can and often do include non-benchers but PAC itself is comprised only of benchers). It is a very small committee (only six benchers) with a very small quorum (only two benchers are needed to constitute quorum). There seems to be a very deliberate (and appropriately so) attempt at diversity on PAC: of the current six benchers on PAC, there are two litigators (one criminal, one civil), two solicitors (one real estate, one corporate), one lay bencher, and one paralegal bencher. PAC performs a “gatekeeper” function most analogous to the function of the U.S. Grand Jury. Staff come up with prosecution options and, based on the paper record only (PAC does not hear direct evidence), PAC decides if the matter should proceed to discipline based on reasonable belief. PAC meets monthly year-round and conducts all ITAs and Regulatory Meetings (see below). Although only lawyers vote for lawyer benchers (and only paralegals vote for paralegal benchers), PAC benchers have jurisdiction over all licensees (both lawyers and paralegals). 3. Conduct Unbecoming Most practitioners think that the Law Society only enforces misconduct in the context of the Rules of Professional Conduct or other misconduct that harms or affects clients. The Law Society’s regulatory vires goes far beyond that and includes “off-duty” conduct as well, even if there is no harm to any client or no specific Rules of Professional Conduct were breached. The Law Society has jurisdiction to discipline a practitioner who, in his/her personal or private capacity, conducts himself/herself in a manner that “tends to bring discredit upon the legal profession”. This is referred to colloquially as “conduct-unbecoming” and includes, without limitation: 3 • criminal acts that reflect adversely on honesty, trustworthiness, or fitness as a lawyer; • taking improper advantage of the youth, inexperience, lack of education, unsophistication, ill-health, or un-businesslike habits of another; • any conduct involving dishonesty; and/or • any conduct which undermines the administration of justice. As should be obvious, the scope of conduct-unbecoming can be a very broad and is, frankly, a very fluid form of malpractice. 4. Good Character PAC generally authorizes discipline of any existing licensees (both lawyers and paralegals), but PAC also has a limited jurisdiction over prospective licensees as well. One of the “miscellaneous” matters that comes before PAC relates to the “good character” required of all applicants trying to become a lawyer or a paralegal (including formerly disbarred lawyers re-applying for licensure). All prospective applicants must fill out a detailed questionnaire prompting applicants to self-report circumstances that might demonstrate any lack of good character. If the questionnaire discloses any previous conduct (ever) that might tend to suggest the lack of good character, the matter gets assigned to staff for a recommendation, then to PAC for consideration. If PAC is not concerned about the risk of lack of good character based on the staff report, PAC can dispense with a hearing to determine same. Alternatively, PAC can commit the applicant to a hearing before the Hearing Division of the Law Society Tribunal for a formal adjudication of good character. 5. Capacity vs Conduct Not surprisingly, malpractice is often the result of mental illness, infirmity, or addiction – the same capacity issues that probably affect all of society generally. The Law Society is quite sensitized to the impact of such mental illness, infirmity, and addiction on malpractice – whenever there is a reasonable probability of a capacity issue, the alleged malpractice is dealt with as a want of capacity instead of discipline, per se. While the remedy can ultimately be the same (e.g. the loss of a right to practice or restrictions on the right to practice), there are obvious humanitarian reasons for proceeding as a capacity matter when the facts so present. Where incapacity is less clear, PAC can (and often does) authorize alternative proceedings (see “Conduct Application” below). 4 Part III: Conduct that Lawyers are Being Disciplined For 1. Failure to Respond Once a complaint is received by the Law Society, the Complaints Resolution and Investigation Department will open a file. They would then typically ask the lawyer for an oral interview or written responses to the complaint. More often than not, the Law Society investigator may request the production of documents that relate to the matters under investigation (such as client files, trust account records, and transaction documents, etc.).