PRACTICE WATCH, by Barbara Buchanan, Practice Advisor

Requesting practice advice? Use Practice Advisors effectively
Attention real estate practitioners – limiting your retainer
Ombudsman for Banking Services and Investments
Loss of privilege – legal assistant swearing affidavit
BC Securities Commission: Amendments to s. 148 of the Securities Act
Where is your client?

   
  Law Society practice advisors
  The Practice Advice Department (left to right): Practice Advisor Barbara Buchanan, Ethics Staff Lawyer Jack Olsen and Practice Management Advisor David Bilinksy. Warren Wilson, QC will join the team in January; see page 5.
   

Requesting practice advice? Use Practice Advisors effectively

The Practice Advice Department fulfilled 6,122 requests for advice in 2009. It’s a busy little department. If you require advice from a Practice Advisor, please consider the following suggestions to help us help you:

1. Ask your question of one Practice Advisor only. If you have contacted more than one advisor, let the advisor know so that only one person is handling your request. If you telephone or email more than one person, it can actually take longer to receive a reply as the advisors have to sort out who will respond.

2. Ask your question at the beginning of your call. You can fill in background details as necessary.

3. Call us yourself. Too often lawyers ask an assistant or a student to call for help, and the caller does not understand the lawyer’s question or have sufficient information.

4. If a complaint has been made against you, it is too late to call a Practice Advisor for help. The appropriate time to call an advisor for help is before a complaint is made.

5. If you leave a voicemail message, provide the following information:

    • your full name, including the spelling of your surname;
    • your phone number and local (saying it twice is helpful);
    • the name of your law firm;
    • the subject matter and your question;
    • whether the matter is time-sensitive.

Above all, please speak clearly and slowly. We cannot return your call if we do not understand who is calling and your telephone number. We want to hear from you and we’re here to help.

Attention real estate practitioners – limiting your retainer

Pay extra attention to borrowers using their home equity as security for loans unrelated to buying a home. People tap into their home equity for reasons ranging from raising cash for an investment opportunity to participating in a financial strategy intended to create a tax deductible mortgage. If you act for such a borrower, you may be blamed if the opportunity or strategy doesn’t play out as anticipated, jeopardizing the borrower’s equity and possibly causing other losses. Take particular care to limit your retainer to clarify that you are providing advice only on the security instrument itself, not the related matter, and recommend that the borrower obtain financial or other advice as required in that regard.

Ombudsman for Banking Services and Investments

Have you made a complaint to a financial institution or investment firm that you have been unable to successfully resolve? Before heading off to court, you may wish to consider making a complaint to the Ombudsman for Banking Services and Investments (OBSI), a national, independent dispute resolution service that’s free to consumers. OBSI recently instituted a tolling agreement component to its services with respect to limitation periods regarding banking service complaints.

OBSI looks into complaints about most banking and investment matters, including:

  • debit and credit cards;
  • mortgages;
  • stocks, mutual funds, income trusts, bonds and GICs;
  • loans and credit;
  • investment advice;
  • fees and rates;
  • transaction errors;
  • misrepresentation;
  • accounts sent to collections.

If your complaint about one of OBSI’s more than 600 participating firms (including domestic and foreign-owned banks, some credit unions, federal trust and loan companies, all Investment Regulatory Organization of Canada and Mutual Fund Dealers of Canada member firms) falls within its mandate and time limit, and OBSI finds in your favour, it may recommend that the financial institution compensate you or your client to a maximum of $350,000.

You can learn about how OBSI has dealt with some complaints by viewing case studies (complainants’ names omitted) on its website. Here’s a sample of some subject areas:

  • forged cheque;
  • Internet scam;
  • credit card fraud;
  • debit card fraud;
  • debit card PINs;
  • mortgage prepayment;
  • risk disclosure and mitigation.

To learn more, visit www.obsi.ca. For questions about tolling agreements, contact ombudsman@obsi.ca.

Loss of privilege – legal assistant swearing affidavit

Split Vision Eyewear Inc. v. The Economical Insurance Group, 2010 BCSC 396 dealt with a situation in which privilege was held to be waived over defence counsel’s file up to the time that his legal assistant swore her affidavit. The assistant deposed that she was informed by counsel that liability was in issue and that there was a meritorious defence. Her affidavit included detailed statements, based on information and belief, of evidence that the defendants would lead at trial. Walker J. stated:

[101] I agree with the submission of the plaintiff that in the circumstances of this case – where the insurers investigated the loss, denied coverage, and then chose to tender the affidavit of a legal assistant as opposed to a party itself to represent the merits of the defence to the Court – the insurers must accept the consequence, which is to make available the contents of defence counsel’s file at the time the representation was made. To do otherwise, would be to do precisely what Wigmore forbids: to disclose as much as the party pleases while withholding the remainder.

[102] In this case, the insurers chose to represent to the Court the merits of their defence by a position-statement of counsel expressed through a legal assistant’s information and belief, at a time when the insurers had denied coverage following their investigation. In disclosing what the insurers’ evidence “will show,” the insurers waived privilege over the information contained in defence counsel’s file at the time the affidavit was sworn.

BC Securities Commission: Amendments to s. 148 of the Securities Act

The BC Court of Appeal decision of July 8, 2009 in the matter of Shapray v. British Columbia (Securities Commission), 2009 BCCA 322, declared s. 148(1) of the Securities Act, RSBC 1996, c. 418 invalid. However, the court delayed the order of invalidity from coming into effect for 12 months so the BC Legislature could consider “how to achieve the important objectives underlying s. 148(1) in a way that is constitutionally justifiable and consistent with the important purposes of the Act.” The court’s decision was not appealed.

Section 148(1) of the Securities Act applied to protect the secrecy of investigations under the Act. It prohibited a person (including a lawyer) from disclosing any information, evidence or name of any witness examined or sought to be examined. Section 148(1) read as follows:

(1) Without the consent of the commission, a person must not disclose, except to the person’s counsel, any information or evidence obtained or sought to be obtained or the name of any witness examined or sought to be examined under section 143, 144 or 145.

Under the legislation a lawyer was prohibited from engaging in otherwise lawful conduct or speech when representing a client who was the target of an investigation or merely a witness or document custodian contacted or subpoenaed by investigators, unless the consent of the commission was first obtained. In order to obtain the consent of the commission, the lawyer might be required to disclose otherwise privileged communication. A lawyer served with a summons under s. 144 was also prohibited from seeking instructions from a client about whether privilege should be claimed, or waived, over any information the commission was seeking from the lawyer regarding the client. Without the ability to seek instructions, a lawyer would be ethically bound to claim privilege over all information the commission sought where any doubt existed over whether privilege attached (Chapter 5, Rule 14 of the Professional Conduct Handbook).

The BC Legislature has since replaced s. 148(1) with legislation that requires the commission to make a specific order to protect the integrity of an investigation. Such an order presumably can be reviewed to ensure that it is compliant with Charter principles. Section 148(1) now reads:

(1) For the purpose of protecting the integrity of an investigation authorized under section 142, the commission may make an order, that applies for the duration of the investigation, prohibiting a person from disclosing to any person the existence of the investigation, the inquiries made by persons appointed under section 142, or the name of any witness examined or sought to be examined in the course of the investigation.

In addition, subsection (1.1) was added:

(1.1) An order made under subsection (1) does not apply to the disclosure of information between a person and the person’s lawyer.

Accordingly, a lawyer may always disclose to his or her client any information or evidence obtained or sought to be obtained, or the name of any witness examined or sought to be examined, under section 143, 144 or 145 of the Securities Act.

Where is your client?

You have written and telephoned your client for instructions but have not received a reply. Maybe the address and telephone number are no longer current. You are anxious, but you do not have any instructions to take steps on the client’s behalf. There may be a limitation date approaching. You want to clearly state in a letter that you will not take steps to protect the client’s interest without instructions. Alternatively, you may have money or important documents to give to your client. What can you do?

You could take the following additional steps to try to reach your client:

  • send a letter by registered mail;
  • email your client;
  • Google your client’s name;
  • look up your client on social media;
  • call your client at all available telephone numbers;
  • use a no-find, no-fee skip trace service.

Further information

Contact Practice Advisor Barbara Buchanan at 604-697-5816 or bbuchanan@lsbc.org for confidential advice or more information regarding any items in Practice Watch.