Special Compensation Fund claims

The Special Compensation Fund, funded by all practising lawyers in BC, is available to compensate persons who suffer loss through the misappropriation or wrongful conversion of money or property by a lawyer acting in that capacity. The Special Compensation Fund Committee makes decisions on claims for payment from the Fund in accordance with section 31 of the Legal Profession Act and Law Society Rules 3-28 to 3-42.

( After May 1, 2004 compensation is provided by trust protection coverage under Part B of the Compulsory Professional Liability Insurance Policy.)

Rule 3-39 provides that, unless the Special Compensation Fund Committee directs otherwise, the Executive Director may publish and circulate to the profession a summary of the Committee's written reasons on claims. In any publication, the claimant may not be identified by name, or otherwise, unless the claimant consents and a lawyer may not be identified unless the Committee finds that the lawyer has misappropriated or wrongfully converted funds.

Re: A Lawyer *

* The lawyer is not identified as this claim was denied.

Special Compensation Fund Committee decision involving claim 20035013

Decision date: March 2, 2005
Report issued: April 27, 2005

Claimant A
Claim of $582,315.26 denied

In 1993 the lawyer was retained by A, the plaintiff in a motor vehicle action and in a related civil action. At trial the client was awarded damages of $33,838.51 relating to the motor vehicle action. The other action was dismissed.

In his reasons for judgment, the judge stated that A was a difficult witness who often gave non-responsive, argumentative or inconsistent answers, all of which made it difficult to give weight to his evidence unless it was independently corroborated. The Special Compensation Fund Committee found this characterization of A’s credibility consistent with what he presented to the Committee.

The Committee noted that it appeared ICBC, as insurer for the defendant, delayed in paying out A’s judgment. Client A’s union then garnished some of the proceeds to recover payments for wage loss that it had previously made to A. In March 2000 A signed a document releasing and discharging his lawyer on consideration of a $2,600 payment.

A’s claim to the Fund derived from a misunderstanding of a decision made in camera wherein a judge, faced with an application by A to issue a privately laid information against his lawyer, found that there was tangible evidence on which a trial judge might conclude that the lawyer of client A had committed the offences charged.

The private information against A’s lawyer was stayed by Crown Counsel without ever contacting the lawyer.

The Special Compensation Fund Committee found that there was no evidence at all to corroborate client A’s assertion of wrongdoing against his lawyer. After reviewing all of the criteria for payment from the Fund, the Committee found there was no evidence to show the lawyer had acted dishonestly or fraudulently. Any money the lawyer received was pursuant to a retainer agreement between the lawyer and A or pursuant to accounts rendered, which were in fact settled by way of the lawyer making payment and receiving a full release from A. The Committee denied the claim.

Re: A Lawyer *

* The lawyer is not identified as this claim was denied.

Special Compensation Fund Committee decisions involving claim 20010170

Decision date: March 2, 2005
Report issued: May 13, 2005

Claimants A and B
Claim of $11,380 denied

Client A was introduced to the lawyer by way of a pre-paid legal plan under which the lawyer provided legal services. After an initial meeting, for which the lawyer billed and was paid, A and her husband B continued to use the lawyer’s services in respect of a custody matter. In 2001 client A and B made several more cash payments to the lawyer after each meeting. In early March 2001, A and B provided $1,000 in cash, which they considered a retainer, although no written retainer agreement was ever presented or signed. The lawyer did not provide a receipt for this $1,000 and did not deposit the funds to his trust account. A and B provided a further $4,000 to the lawyer in late March and $6,000 in June. The lawyer did not provide a receipt or place the money in trust in either case.

Over this same period, the lawyer continued to do work for A and B in respect of the custody matter. In her claim to the Special Compensation Fund Committee, A stated that, after requesting a copy of her file from the lawyer in August, she learned that a consent order had already been granted in June in respect of the custody matter. A said that she had not agreed to a consent order, but when she questioned the lawyer, she was told it was “an agreement between lawyers” and that she should accept what had been done. A and B then retained a new lawyer.

The new lawyer encouraged A to ask for an accounting from the lawyer. Only when A pressed the first lawyer for an accounting did he provide a statement of account that indicated A owed him a further $6,000.

The Special Compensation Fund Committee noted that it appeared that the lawyer did not put any retainer money or payments in trust and had no records verifying receipt, which the lawyer acknowledged. A and B’s claim, however, was with regard to the quality and quantity of work the lawyer had performed and, as such, the claim appeared to be a fee dispute. The claimants had not availed themselves of their right to take the lawyer’s account to a fee review, but the lawyer expressed his intention to consent to an extension of time for this purpose. The claim was denied.