Administrative penalties are an enforcement tool that allow the Law Society to address certain breaches of the Law Society Rules with an appropriate and proportionate sanction. Breaches of the following rules are subject to administrative penalties:
List of Admitted Discipline Violations
- The Client Identification and Verification Rules (Rules 3-98 to 3-110);
- The Cash Transactions Rule (Rule 3-59); and
- The Electronic Submission of Documents Rule (also known as the "Juricert Rule") (Rule 3-96.1).
These rules are an important part of the Law Society’s mandate to regulate the legal profession in the public interest.
The Client Identification and Verification Rules, and the Cash Transactions Rule, play a key role in establishing standards of financial responsibility. These rules assist in anti-money laundering (AML) efforts by requiring lawyers to know their clients, identify red flags and manage potential risks involved with suspicious transactions. The importance of these rules to the Law Society’s AML efforts, and the need for stronger fines and penalties for serious breaches of the trust accounting rules, were highlighted in the recent Commission of Inquiry into Money Laundering in British Columbia.
Juricert is an online service operated by the Law Society that authenticates the identity and professional status of lawyers and notaries when making filings with the Land Title and Survey Authority. To guard against fraud, it is imperative that only individuals with an assigned Juricert password use that password and associated online account. To this end, the Juricert Rule prohibits lawyers from sharing their Juricert password with anyone, including with their assistants and any paralegals they work with.
The Administrative Penalties Process aims to deter violations of these important rules, by levying sufficiently impactful penalty amounts and by publishing a summary of penalty that will identify the lawyer or law firm that committed the breach. Penalties will also form part of a lawyer’s Professional Conduct Record, as defined in the Rules.
The Law Society anticipates that addressing these matters using administrative penalties will be more efficient, bypassing a lengthy investigation and discipline process in favour of a more streamlined administrative one.
The process
The Administrative Penalties Process is set out in Part 4 – Division 6 of the Law Society Rules.
Where the Executive Director finds that, on a balance of probabilities, a violation of a specified rule has occurred, the Executive Director (or their delegate) may assess an administrative penalty by sending a Notice of Penalty to the lawyer.
The Executive Director also has the discretion to have the matter dealt with through the regular discipline process. This is particularly the case for repeat offences.
When a lawyer receives a Notice of Penalty, they must either pay the amount or apply to the Chair of the Discipline Committee for a review of the penalty. A review application must be made before a specified date, which will be at least 30 days from the date of the Notice of Penalty.
A lawyer is deemed to have admitted to the rule breach specified in the Notice of Penalty if:
- they pay the penalty;
- they fail to pay or dispute the Notice of Penalty before the specified date; or
- the Chair orders the penalty to be paid following a review.
If the penalty is paid when due, the Law Society will take no further action on the rule breach.
If the lawyer seeks a review of the penalty and the Chair is satisfied that, on a balance of probabilities, the specified rule breach did occur, they will do one of the following:
- confirm the penalty;
- reduce the amount of the penalty; or
- extend the date for payment.
The Chair can also cancel the penalty if the Chair finds that there is insufficient evidence to support a breach of the specified rule. The Law Society will take no further action on a matter if the Chair cancels the penalty.
Fee Schedule
The amount of an administrative penalty will be assessed using the following fee schedule:*
(a) $3,000 for a first contravention of
- the Client Identification and Verification Rules (where a lawyer met with the client in person on all referred matters), and
- the Juricert Rule;
(b) $5,000 for a first contravention of
- the Client Identification and Verification Rules (where the lawyer did not meet with their client in person, on one or more matter), and
- the Cash Transactions Rule;
(c) $10,000 for a second or subsequent contravention of any rules subject to administrative penalties.
*If a single referral to the administrative penalty process has multiple rule breaches by the same lawyer, it will be considered by the Executive Director to be a single contravention for the purpose of the fee schedule. If a single referral includes rule breaches in both category (a) and category (b), the higher amount will be applied.
Questions
If you have questions about administrative penalties, call 604.669.2533 or email app@lsbc.org.