President's View

The CBA - why it's time for choice

Howard R. Berge, QC

September 19 is the day that BC lawyers at the AGM vote on a resolution to set the 2004 practice fee for the operation of the Law Society.

The Benchers resolved at their July meeting, after much debate, to follow the very clear terms of the Legal Profession Act, section 24, which provides for an agency relation for collecting CBA fees. The Act, however, limits this agency to only those BC lawyers who are members of the CBA. Further, under this section the CBA fee collected by the Law Society is deemed to be a part of the practice fee. Accordingly, BC lawyers who choose not to belong to the CBA would pay only the practice fee of $1,027.50. Those who choose to belong to the CBA will pay an additional $485.41 as the CBA fee, for a total of $1,512.91 (if in practice five years or more) or an additional $296.41, for a total of $1,323.91 (if in practice less than five years).

After the profession was notified of the Benchers' fee resolution, the Canadian Bar Association (through Robert Brun and J.J. Camp, QC) put forward two alternative practice fee resolutions, one of which the movers intend to put forward for discussion and vote at the AGM.

In essence, each of these alternative resolutions would make payment of a CBA fee equivalent mandatory for all BC lawyers as a component of the practice fee, whether or not those lawyers choose to be CBA members. It's worth noting that, for the purpose of these alternative fee resolutions, the 2004 CBA fee increase in BC will be $20 less than in the rest of the country, as a means of the CBA encouraging mandatory membership in BC. This reduction is likely temporary as BC lawyers would presumably be expected to catch up in the fees in the future. In the result, the alternative resolutions propose a 2004 practice fee for all BC practising lawyers of $1,492.91 (for those in practice five full years or more) or $1,303.91 (for those in practice less than five full years).

In this column, I'd like to address two issues in advance of the September 19 AGM. One is freedom of choice. A fundamental reason for the Benchers' fee resolution is that each individual lawyer should be given a clear choice on whether or not to belong to the CBA and whether to pay the CBA fee. The key reasons have been canvassed in our notices for the AGM, and I will recap some of the pivotal points later in this column.

But there is another issue I'd like to turn to first - and that is the serious financial impact of the Brun/Camp alternative fee resolutions on BC lawyers, particularly on CBA members.

The financial impact of the alternative fee resolutions

If either of the Brun/Camp alternative practice fee resolutions were passed in preference to the Benchers' fee resolution, how would such a resolution be interpreted?

One has to consider that, at the time they passed their practice fee resolution in July, the Benchers also passed a resolution to authorize the Law Society to serve as agent to collect the CBA fee from those lawyers who are members of the CBA. This was in anticipation that the Benchers would collect fees from CBA members on a voluntary basis.

The Benchers passed their resolution pursuant to section 24(1)(c) of the Legal Profession Act, which states that "the Benchers may . authorize the society to act as agent of the Canadian Bar Association for the purpose of collecting fees of that association from lawyers who are members of it." Section 24(2) provides that "fees collected under subsection (1)(c) form part of the practice fee referred to in section 23(1)(a)."

Having passed such a resolution under s. 24(1)(c), the Benchers will be required to collect a CBA fee from CBA members in 2004. The result is a double payment by CBA members unless the Benchers are able to pull back from that resolution.

If this problem is not fixed and should one of the Brun/Camp practice fee resolutions pass at the AGM, I believe the financial impact on BC lawyers could be two-fold. First, those BC lawyers who are not CBA members will nevertheless pay a practice fee that includes an amount equivalent to the CBA fee. Second, those BC lawyers who are CBA members will pay both a practice fee that includes a CBA equivalent fee plus a further CBA fee, which the Benchers must collect as agent for the CBA in furtherance of their resolution in July. This would result in particularly harsh financial consequences for CBA members, as reflected in the table below.

I thought it important to flag this statutory issue for the profession in advance of the AGM. It's important to note, at this juncture, that this is my own interpretation of the statute. There may be Benchers who do not share it.

I should also note that a practice fee resolution may be passed at the AGM or the Benchers could hold a referendum to set the practice fee, which is another option under section 23 of the Legal Profession Act. There may be circumstances in which the Benchers would feel it necessary to do both. Perhaps the worst case scenario would be seeing the Benchers forced to run the operations of the Law Society through a special assessment - that would be unprecedented and an unconstructive approach for both the Law Society and the CBA. Notably, the Society would have no means to collect an equivalent fee or serve as agent for the CBA in such a scenario.

While this gives food for thought on a financial front, the question of freedom of choice remains critical.

  Practice fee CBA equivalent component (as part of practice fee) Total fee payable for non-CBA members CBA fee (payable by CBA members) Total fee payable by CBA members

Benchers' resolution

In practice 5 years or more

$1,027.50

Not applicable

$1,027.50

+ $485.41

$1,512.91

 

In practice less than 5 years

$1,027.50

Not applicable

$1,027.50

+ $296.41

$1,323.91

 

Brun/Camp resolution

In practice 5 years or more

$1,027.50

+ $465.41

$1,492.91

+ $485.41

$1,978.32

 

In practice less than 5 years

$1,027.50

+ $276.41

$1,303.91

+ $296.41

$1,600.32


Please note: Mr. Berge points out in his column a possible problem involving a duplication of charges to CBA members of the Society. The Benchers considered this issue at their meeting on September 5 and informally agreed that, if one of the Brun/Camp resolutions were passed, all reasonable efforts to ameliorate the unintended double payment consequences would be undertaken. However, the problem remains that the passage of one of the Brun/Camp resolutions will require non-members of the CBA to pay to the Law Society an amount equivalent to the CBA fee. The Benchers have not decided how to deal with those funds. Although the CBA resolution directs the Benchers to pay the "extra" funds to the CBA, that is not a direction that the membership is authorized to give the Benchers except by the process described in section 13 of the Legal Profession Act. The Benchers' consideration of this matter at their July meeting led to the section 24 agency resolution. This resolution of the Benchers respects members' freedom of choice.

 

The matter of choice

Most Benchers believe it is right for lawyers to have the choice of whether to belong to the CBA and pay CBA fees. Having been active in the CBA for many years and as a past member of Provincial and National Councils, I look forward to a change. I am confident that the CBA will emerge as a stronger and more vibrant organization in this province.

Our Law Society and the BC Branch of the CBA have shared a relationship that stretches back more than 50 years. In the mid-forties the legislature supported mandatory CBA membership as follows: "The Benchers may out of the annual fee paid by each barrister pay to the Canadian Bar Association the annual fee for his membership in that association" [section 14(2), Legal Professions Act].

In 1987 the legislature deleted the above provision, and introduced the current, much narrower, section 24, permitting the Benchers to authorize the Law Society to act as agent for the CBA for the purpose of collecting the fees of CBA members and deeming that such fees collected "form part of the practice fee referred to in section 23(1)(a)."

In recent years, BC lawyers have begun questioning the nature of CBA membership, and a few have resigned membership. While the CBA has taken the position that membership is voluntary, it has nevertheless continued to advocate payment of a CBA fee component by all BC lawyers.

After a lively debate at last year's AGM, members passed a 2003 practice fee that included "an amount equivalent to the CBA fee." The Benchers had originally recommended the "fee equivalent" in recognition of the fact that certain lawyers have expressly chosen not to be CBA members. The 2003 practice fee therefore comprised several components - the Law Society fee, the CBA equivalent fee and funding amounts for the BC Courthouse Library Society, the Lawyers Assistance Program and subscription to the Advocate.

The Benchers subsequently resolved to pay to the Canadian Bar Association the full amount of the CBA equivalent fee under their general authority to apply Law Society funds, and the CBA accepted this money as payment for fees of its members in BC.

The upshot of all of this was that - while CBA membership was voluntary - payment of a CBA fee component was not.

The Benchers have always regarded the Canadian Bar Association as a valuable organization, and this goes a long way to explaining why, year after year, they have recommended that payment of a CBA membership fee be included as part of the practice fee. Historically, the Law Society has also been concerned that, should the CBA drop certain functions for financial reasons, the Law Society might need to take on those functions.

If the CBA is a valuable professional association - and most of us believe it is - it should respect BC lawyers by giving them the same choice as other Canadian lawyers and by having confidence that most BC lawyers, given the choice, will see CBA membership as good value for money. Our own Law Society's polling reveals two important things. First, just over half of lawyers polled in BC do want CBA membership to be voluntary. Second, three out of four would choose CBA membership if it were voluntary.

These two findings are not hard to reconcile. Most people care passionately about the associations and community organizations to which they belong - but would not seek to force others to join. The choice to belong is the very essence of a membership association. It is what ensures that the association reflects and serves its members.

The Law Society and the Canadian Bar Association carry out very different roles. The Law Society is a regulatory body for lawyers and its primary responsibility is to protect the public interest in the administration of justice. For that reason, membership in the Society is a requirement of practising law. The CBA, in contrast, is a professional association that speaks first and foremost for the interests of its members. To maintain public and lawyer confidence in our separate responsibilities, the Law Society and the CBA should not be seen as too closely connected.

Governments are now scrutinizing and, in some cases interfering with, the self-regulation of the legal profession. While some of the criticisms levelled in other jurisdictions would not be justified in BC, too close an integration between any law society and a lawyers' association, such as the CBA, may not enhance public confidence.

In addition, the CBA should not be dependent on all BC lawyers for providing such a large share (25%) of its income, a large portion of which remains with the National Office, or on our provincial law society for using the mantle of the practice fee to secure that income stream. When I say that the CBA will come out stronger in BC, it is because each of its members will make a deliberate choice to have the CBA serve and represent them.

The mandatory nature of CBA fees is now arising again and again as a source of discontent in the profession. The issue now routinely dominates the Law Society AGM. It has prompted several BC lawyers into initiating court challenges. It is constantly diverting time, energy and resources away from important projects of both the Law Society and the CBA. This ongoing strife is not good for either organization, or for BC lawyers.

I believe that BC lawyers, whether or not they are active CBA members, are ready to support the Benchers' proposal for individual choice. If you consider this an important issue, the September 19 AGM is the opportunity to make your vote count.