Admitted Discipline Violations

Summary of Decision of the Hearing Panel

Douglas Joseph William Hammond

West Vancouver, BC

Called to the bar: May 20, 1988

Written materials: May 21, 2020

Panel: Brook Greenberg (Chair), Don Amos and H. William Veenstra, QC

Decision issued: June 22, 2020 (2020 LSBC 30)

Counsel: J. Kenneth McEwan, QC and Laé sha J. Smith for the Law Society; Patrick F. Lewis for Douglas Joseph William Hammond


Douglas Joseph William Hammond practised as a sole practitioner primarily in the areas of corporate, commercial and real estate law. Between 2014 and 2016, he provided legal work for investors, officers and consultants of a British Columbia company. Some of this legal work was referred to him by another lawyer who acted as corporate counsel for the company. Hammond has known the other lawyer for around 30 years and considers him to be trustworthy.

The other lawyer advised Hammond that an investor wished to make a further investment of $474,000 USD in the company in tranches, which were based on achievement of performance milestones agreed to by the investor and the company. Hammond understood from both the other lawyer and the investor that the investor and the company wanted the investment funds to be held in a lawyer’ s trust account to provide certainty that the funds were in place and to assure timely payment.

The other lawyer advised Hammond that, because there was a conflict of interest between the company and the investor, he could not act on behalf of both parties and needed other counsel to be involved. A vice president of the company sent an email introducing Hammond and the investor to each other and advised that Hammond could help with the “ $500,000 USD escrow.”

Hammond spoke with the investor by phone and requested identification documents. He then received scanned pictures of the documents by email. He did not meet with the investor to verify his identity.

Hammond opened a US dollar trust account. He emailed the terms of engagement to the investor, which included that Hammond would hold funds in trust and would pay out amounts as directed; would charge $200 for processing each payment; was acting solely for a company for which the investor was the sole director and officer; was not acting for the investor or the other corporation; and was merely facilitating the transfer of money and not advising or determining whether performance milestones had been met.

The investor deposited a bank draft of $474,000 USD into the trust account and instructed Hammond to make a payment to another company that the other lawyer advised was a subsidiary of the corporation. Hammond paid $473,000 to the company through five payments in accordance with directions provided by the investor. Hammond took a fee of $200 USD from the funds held in trust for each of the five payments, resulting in a net payment of $1,040 after bank fees. He did not provide any other services. He did not make or record inquiries with respect to the performance milestones or other terms relating to the investor’ s further investment or payments.


Hammond admitted his conduct constituted professional misconduct.

The panel accepted Hammond’ s admission of professional misconduct. The panel noted that Hammond’ s conduct pre-dated the adoption of Rule 3-58.1(1), which prohibits lawyers from allowing funds to be deposited into or disbursed from a trust account where no related legal services were provided. Nevertheless, prior to this rule, lawyers were obligated to make and record inquiries of any client who sought the use of a trust account without requiring any substantial legal advice.


Hammond and the Law Society jointly submitted that the disciplinary action should be a two-week suspension and payment of costs of $1,000.

The panel considered the serious nature of the conduct, Hammond’ s lack of prior discipline history, his acknowledgement of misconduct and cooperation with the investigation, the range of penalties imposed in similar cases, and the fact that there was no evidence of loss or fraud.

The panel agreed with the proposed sanction and ordered that Hammond:

  1. be suspended for two weeks; and
  2. pay costs of $1,000.

2020 LSBC 30 Decision of the Hearing Panel