The Law Society recently decided to publish summaries of conduct reviews on an anonymous basis. This publication is intended to assist lawyers by providing information about ethical and conduct standards.
A conduct review is a confidential meeting between a lawyer against whom a complaint has been made and a Conduct Review Subcommittee, which may also be attended by the complainant at the discretion of the subcommittee. The Discipline Committee may order a conduct review pursuant to Rule 4-4, rather than issue a citation to hold a hearing regarding the lawyer’s conduct, if it considers that a conduct review is a more effective disposition and is in the public interest. The committee takes into account a number of factors, which include:
- the lawyer’s professional conduct record;
- the need for specific or general deterrence;
- the lawyer’s acknowledgement of misconduct and any steps taken to remedy any loss or damage caused by his or her conduct; and
- the likelihood that a conduct review will provide an effective rehabilitation or remedial result.
CR #2011 – 08
This conduct review addressed the lawyer’s conduct in a real estate transaction, in which he gave an undertaking to use his best efforts to obtain a priority agreement and estoppel certificate from a tenant of the property. He also failed to respond to letters and telephone calls from the other lawyer regarding his fulfilment of the undertaking. The subcommittee observed that an undertaking to use “best efforts” should not be given because it is inherently uncertain. It also discussed with the lawyer his pattern of poor communications, which resulted in small problems becoming big problems. It reminded the lawyer that Chapter 11, Rule 6 of the Professional Conduct Handbook requires a lawyer to respond promptly to communications from another lawyer. The lawyer had changed his practice setting and reduced the number of his files, which he believed would help him avoid future problems.
Editor's note: See the Notice to the Profession entitled "Task force appointed to tackle issues raised in recent conduct review summary" for further information on the following conduct review summary.
The conduct review was ordered to discuss with the lawyer his obligations to fulfill undertakings, to comply with the electronic registration requirements of the Land Title Act, to properly supervise his staff and to comply with the accounting rules set out in Division 7 of Part 3 of the Law Society Rules. This conduct was the result of an unorganized conveyancing practice that lacked proper systems and supervision. The lawyer’s practice was thoroughly investigated by an audit team and by practice reviewers, which appeared to have caused him to take the necessary steps to ensure that he meets the standards set out in the Rules for accounting records and handling of funds. The subcommittee reminded the lawyer that he is personally responsible to oversee the accounting function and to ensure that his trust reports are accurate. Further, he was advised that he could not lawfully affix his electronic signature to an electronic version of a document that is different from the original, regardless of whether the amendments to the original were authorized by opposing counsel.
The conduct review addressed the lawyer’s acknowledged misconduct in transferring several small balances from his trust account to his general account on inactive files. He first prepared a bill on each file with a general description of services, which included file review, attempts to locate the client and photocopying. He did not deliver the bills because he was unable to locate the clients. The subcommittee drew to his attention Rule 3-57(3) and s. 69 of the Legal Profession Act. It emphasized to the lawyer that his actions could be viewed as theft of the client’s funds and the small amount of money did not detract from the significance of his actions. Further, the bills did not include a reasonably descriptive statement and some were inaccurate because they included disbursements that had not been incurred.
The conduct review arose from the lawyer’s conduct in attending a meeting between a separated mother and father to discuss various issues related to their child, when he knew that the father was represented by counsel. The lawyer had been counsel for the mother, but withdrew because he became romantically involved with her. Another lawyer in the same firm then assumed conduct of her matter. The lawyer attended this meeting two months after his withdrawal, without advising or obtaining the consent of the father’s counsel to attend. His conduct was in breach of Chapter 4, Rule 1.1 of the Professional Conduct Handbook, as he was living with the mother and her child and consequently had an interest in the outcome of the matter. The subcommittee pointed out to the lawyer both the perception and the reality of the conflict that arose as result of his inappropriate action.
The subject of the conduct review was the lawyer’s conduct in representing two people in an immigration matter on short notice. He was not adequately prepared for the hearing, partly because his application for an adjournment was denied and partly because he was not up-to-date in that area of law. He was cross-examined at the hearing and gave evidence that conflicted with statements in his affidavits, which resulted in the court making unfavourable comments about his veracity. The lawyer recognized that he should not have taken on a matter in an unfamiliar area of law without ensuring adequate time to prepare and that he ought to have taken scrupulous care both to prepare his affidavit and to prepare to testify. He has restricted his practice and will not act in immigration matters.
The purpose of the conduct review was to address the lawyer’s conduct in lending to an acquaintance $5,000 in cash and $10,000 by bank draft for a short period, on the promise by the acquaintance of a very high rate of interest. This interest rate violated s. 347 of the Criminal Code. When the funds and interest were not repaid, the lawyer commenced an action on his own behalf. The subcommittee emphasized that it was unseemly for a lawyer to engage in a cash transaction and to commence an action to recover a criminal rate of interest. At the time of the conduct review, the lawyer had withdrawn that action and retained counsel to commence an action for the principal only. He now appreciates that he may have been duped and will never recover any of his money.
The conduct review concerned the lawyer’s conduct in sending a letter to opposing counsel threatening to commence contempt proceedings against the opposing party if that party did not agree to certain terms. The lawyer made this statement in the context of a very acrimonious family law matter and acknowledged that her emotions affected the tone and content of the letter. The subcommittee discussed Chapter 4, Rule 2(a) of the Professional Conduct Handbook, which prohibits a lawyer from threatening to initiate or proceed with a criminal or quasi-criminal charge for the collateral purpose of securing a civil advantage. Her conduct was also contrary to the canons in Chapter 1, which state that ill feelings between clients or lawyers should never be allowed to influence lawyers in their conduct or demeanour toward each other or the parties. The lawyer acknowledged that her conduct was unprofessional and inappropriate. She had taken steps to ensure this conduct does not occur again, including instituting a “cooling off” period after drafting correspondence to avoid making an emotionally charged response.
The conduct review was ordered in respect of several complaints made about a lawyer over a two-year period, which indicated poor judgment reflected in expressions of anger, defensiveness and excessive litigiousness. The complaints also revealed a pattern of delay and neglect, particularly in entry of orders or other procedural steps, as well as in responding to communications from clients or opposing counsel. The subcommittee discussed with the lawyer the common themes of the complaints, as well as her professional conduct record. It expressed a concern that the lawyer may be ungovernable and may be unable to change ingrained patterns of behaviour. The subcommittee recommended steps to address her apparent isolation as a sole practitioner and her inability to deal appropriately to the pressures of practice and personal stresses. These steps included practising with other lawyers and obtaining counselling.
The conduct review arose from the lawyer’s delay in taking action on behalf of his clients, as well as his failure to follow their instructions and to respond to their communications. He was retained to recover a deposit for a property purchase that did not complete, but took no substantive action to move the file to resolution. He received instructions to take a certain step, but did not do so. The subcommittee reminded the lawyer of his obligation under Chapter 3 of the Professional Conduct Handbook to provide conscientious, diligent and efficient services and to perform the work in a prompt manner. The situation was aggravated by the lawyer sending an inappropriate email to the client. The subcommittee cautioned him that the nature of email may provoke an inappropriate immediate reaction, when a considered response is required.
The lawyer signed several trust cheques while he was insolvent, without obtaining a second signatory, in breach of Rule 3-45(4)(b). The lawyer explained that he had interpreted the rules such that he did not believe he was “operating a trust account” by signing trust cheques. The subcommittee pointed out his interpretation was groundless and reminded him that signing a trust cheque gives rise to legal consequences, including the deemed undertaking in Chapter 11, Rule 8 of the Professional Conduct Handbook that the cheque will be paid and is capable of being certified. The lawyer acknowledged his error.
The conduct review was ordered to address with the lawyer the importance of complying with the “no-cash” rule as well as his obligations when acting for more than one client in real estate transactions. The lawyer received cash of $7,500 or more on two occasions in 2007. Although one instance fell within the exception for legal fees in Rule 3-56.1(3.1), it should have been reported on his trust report, but was not. The subcommittee reminded him to read the questions on his trust report carefully and to take care to fully and accurately answer them.
The lawyer also acted in a real estate transaction for the purchaser, with whom he had a personal relationship and to whom he loaned money to complete the purchase, thus giving rise to a conflict. He also acted for the mortgagee bank, but did not disclose to all clients the relevant details of the transaction. The subcommittee was concerned that he did not appreciate that his failure to disclose material information to the bank was potentially misleading to the bank and preferred the interests of one client over the other. He was advised to ensure that all clients are fully informed of all the relevant details when he acts for more than one client. The subcommittee also warned the lawyer to be very clear, both to himself and other persons, for whom he is acting and for whom he is not.
The conduct review was ordered following an audit of the lawyer’s practice, which revealed breaches of a number of the accounting rules in Division 7 of Part 3 of the Law Society Rules. The subcommittee addressed a concern about the lawyer receiving funds in trust that he disbursed to third parties when little substantive legal work was performed, because of the potential to be involved in facilitating a fraud. The lawyer’s firm had hired a disbarred lawyer to work as an assistant, unaware that Chapter 13 of the Professional Conduct Handbook prohibits a lawyer from hiring a disbarred lawyer without obtaining the written consent of the Law Society. The subcommittee also addressed the conflict of interest that may arise when a lawyer receives shares in a company in payment of legal fees. The lawyer acknowledged the issues in his practice and advised that he had taken steps to rectify the record-keeping and accounting issues and had taken securities courses.