Conduct reviews

The publication of conduct review summaries 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 – 20

This conduct review addressed the lawyer’s failure to fully and effectively communicate with his clients about his legal bill, in which he charged a premium, as well as his offensive language in a letter to the clients after they disputed this bill. The lawyer issued a bill for a $25,000 premium, when he had no written retainer agreement and had not previously ­discussed premium billing with the clients. He sent the bill to the clients with a letter asking them to let him know their “thoughts” about it. He then transferred the funds from trust a few days later, without ­adhering to the 30-day billing cycle he had previously followed. A fee review occurred. The subcommittee pointed out that the lawyer’s letter to the clients was unprofessional due to his use of profanity and the ­disrespectful comments he made about opposing counsel to justify the premium. The lawyer explained that he intended to be informal and down to earth. The subcommittee reminded him that lawyers must maintain a degree of objectivity and formality in client relations to ensure a professional tone.

CR #2011-21

The conduct review was ordered to discuss the lawyer’s breach of undertaking, which occurred when he was acting for both the property owner and the third mortgagee in a complicated foreclosure. A vesting order was granted, which was not consistent with the terms of the undertaking to which the lawyer was bound, and the lawyer simply assumed that, because of that inconsistency, the undertakings were mutually varied. He did not discuss or confirm variation of the undertaking with the lawyer to whom it was given. The situation was aggravated by neither lawyer taking reasonable steps to conclude the matter. The subcommittee reminded the lawyer that it is important to scrupulously comply with undertakings and to ensure that any variation is confirmed in writing.

CR #2011-22

The subcommittee addressed the failure of a lawyer to promptly report an apparent breach of undertaking by another lawyer in accordance with Chapter 13 of the Professional Conduct Handbook, his failure to provide complete information when he did report, and his failure to respond to the Law Society. There were a number of relevant facts that he did not include in his report to the Law Society about the other lawyer’s breach of undertaking, which was compounded by the fact that the lawyer had failed to print off and file all of the email correspondence between them. The lawyer stated this matter had caused him to change his file management practice to retain all emails.

CR #2011-23

The conduct review arose from a complaint by a former client. The lawyer was retained in a debt action and he believed his retainer was concluded when he filed the defence. However, he did not confirm the scope of the retainer with his client nor did he remove himself as counsel of record. He received a summary trial application, but did not take adequate steps to protect the client’s interests, either by forwarding the summary trial application materials to the client or otherwise speaking directly to the client. He also did not respond to opposing counsel. The lawyer accepted that he had failed to provide a reasonable quality of service as required under Chapter 3 of the Professional Conduct Handbook. The subcommittee encouraged the lawyer to use written retainer agreements, particularly when engaged for a limited purpose. It also reminded him that, while counsel of record, he had an obligation to respond to opposing counsel, and that he should have taken timely steps to remove himself as counsel of record.

CR #2011-24

The conduct review addressed a lawyer’s breach of Chapter 5, Rule 15 of the Professional Conduct Handbook, when she received a privileged email between the estranged wife of her client and the wife’s counsel. This rule obliged the lawyer to return the privileged email unread and uncopied to the party to whom it belonged, and to notify that party of her knowledge of the contents and of any intended use by her. Instead, she read the email and attempted to use it at a judicial case conference. The lawyer admitted she was unaware of her obligation under the Handbook at the time. She apologized to the wife of her client at the conduct review, but acknowledged she should have apologized earlier.

CR #2011-25

Two issues were addressed in this conduct review. The first related to a lawyer improperly affixing his electronic signature to a land title document, when he did not have a true copy in his possession, contrary to the requirements of s. 168.3 of the Land Title Act. The electronic document stated that the signatures of the mortgagor and the guarantor were certified by the same person, when the “paper version” showed that the signatures were certified by different persons. The second issue related to the same transaction, in which the lawyer acted for the purchaser and the first mortgagee. On closing, the purchasers had to increase the amount of the first mortgage. The lawyer had previously sent a copy of the executed first mortgage to counsel for the second mortgagee, but did not advise him that the amount of the first mortgage had increased. The lawyer agreed that, in the circumstances, counsel for the second mortgagee reasonably expected to be told of any material change to the first mortgage and that common courtesy dictated that he should have told counsel of this change.

CR #2011-26

This conduct review arose from a lawyer’s rude comment and unprofessional comments to the unrepresented opposing party in matrimonial litigation. The lawyer made comments to the opposing party that this party was “silly,” an “ass,” and a “wife-beater,” and also added some words commonly recognized as expletives. The opposing party made a complaint to the Law Society, and in the course of the investigation, the lawyer responded by setting out the wording he should have used, which contained the same rude inferences but expressed in a more “erudite” manner. The subcommittee stated that it did not view that response as clever and emphasized that his conduct was unprofessional and the lawyer must learn to “fly above the action” between the parties and not become part of it.

CR #2011-27

The conduct review addressed a lawyer’s conduct in entering into a contingency fee agreement that did not contain all the material terms, and his conduct in acting contrary to its terms. The lawyer agreed to act on a personal injury case, in circumstances in which the client had previously retained other lawyers. The lawyer asserted that he agreed to the retainer only on the express terms that the client would accept a reasonable offer from ICBC and that he would withdraw his services if the client was abusive to him or to staff. Further, after the client refused a reasonable offer to settle, the lawyer demanded the client pay all outstanding disbursements as a condition of proceeding to trial, although this term was not included in the contingency fee agreement. The subcommittee reminded the lawyer that the terms of a contingency fee agreement must be in writing and be clear. The agreement is a contract, but the lawyer has fiduciary obligations to his client and must ensure the client fully understands its terms. The lawyer also made unprofessional and disrespectful comments to his client, including about his associate, which in hindsight he agreed were “improper and outrageous” and the result of him acting rashly.

CR #2011-28

The conduct review arose from a breach of the “no cash” rule. A lawyer received cash of $20,000 in two instalments as a retainer for a trial. The trial did not occur and the lawyer refunded $13,000 the money by trust cheque, contrary to Rule 3-51.1(3.2). The lawyer misinterpreted the rule. The subcommittee reviewed the rule with him, as well as the importance of this rule to avoid any involvement in money laundering and to preserve the independence of the profession.

CR #2011-29

The conduct review arose from a lawyer’s conduct in his handling of his client’s retainer funds and the steps he took to recover payment of his bill. The lawyer acted for his client, who was a long-standing friend, to prepare a mortgage to secure a loan made by the client to a third-party mortgagor. When the third party defaulted, the client retained the lawyer to collect the outstanding balance and provided a retainer. The lawyer deposited these funds directly into his general account, rather than his trust account. This conduct was contrary to Rules 3-51(1) and 3-63(3) ­because, although he had performed most of the work to earn those funds, he had not issued a bill. The debt matter was settled, and the lawyer deducted his fees and disbursements from the settlement funds and sent the balance to the client, without issuing a bill or otherwise providing an accounting, which was contrary to Rule 3-57 and s. 69 of the Legal Profession Act. The matter escalated when counsel for the mortgagor erroneously suggested the lawyer had breached an undertaking by disbursing the settlement funds without having an executed discharge. The lawyer was unable to contact the client to return the settlement funds so, in a “panicked” attempt to “fix” the matter, he commenced an action against the client for the return of the funds and registered a certificate of pending litigation against the client’s property. The lawyer acknowledged his handling of funds was contrary to the accounting rules. The subcommittee recommended that he create a support network of other lawyers with whom to discuss practice issues. The lawyer was also referred to Practice Standards.

CR #2011-30

The conduct review addressed a lawyer’s conflict of interest, which resulted from a loan of funds to a corporate client under a secured loan agreement, without meeting the requirements of Chapter 7, Rule 5 of the Professional Conduct Handbook. The Handbook prohibits a lawyer from acquiring a financial interest in a client of the firm, unless the acquisition is effected on or through the facilities of a stock exchange and the client acknowledges in writing that the lawyer is not representing the client and will not rely on any advice from the lawyer in the matter and, further, the client is independently represented in the transaction. None of these requirements were met. The lawyer acknowledged that he acted in a position of conflict between his own interests and those of his client and that he had not met the standards of ethical conduct.

CR #2011-31

The conduct review arose from the lawyer’s conduct in charging fees on a contingency basis, when his client had not signed a written contingent fee agreement as required by Part 8 of the Law Society Rules. The lawyer sent a contingent fee agreement to the client, but he did not sign it. When the lawyer settled the matter, he met with the client to discuss the fee and believed the client had agreed to his proposed fee; however, the lawyer did not take any notes and the client disputed that he had agreed. The situation was further complicated by the client’s vulnerability arising from a brain injury. Although the client was competent, the lawyer should have taken more care both to ensure the client understood the proposed fee and to properly document such discussions through notes and confirming letters to the client.

CR #2011-32

The conduct review addressed a lawyer’s apparent failure to provide a reasonable quality of service and her failure to respond to the Law Society after the client complained. The lawyer did not provide all relevant information during the investigation, but she did bring a volume of materials to the conduct review itself. Those materials showed some of the complainant’s concerns were not justified, but the subcommittee pointed out that the matter might not have proceeded as far as it did if she had properly responded during the investigation, as she was required to do. The subcommittee recommended that the lawyer proactively manage client expectations by clearly communicating to clients what she can reasonably achieve, both at the outset in a written retainer letter and then throughout the course of the matter. It also recommended that she document that advice properly, through letters to the client or detailed file notes.

CR #2011-33

This lawyer breached Rule 3-51.1 (the no-cash rule), by accepting an aggregate of $23,000 in cash intended as a retainer, then disbursing some of those funds by trust cheque in settlement of the client’s matter. The subcommittee reminded the lawyer that, although there is an exception in the no-cash rule to receive cash of $7,500 or more for professional fees, disbursements and expenses, it is not permissible to then use those funds received in cash for a different purpose. It is of fundamental importance that lawyers adhere to this rule so the profession continues to have the confidence of governments, both inside and outside Canada, to allow lawyers to continue to be exempted from the onerous reporting requirements for cash transactions.

CR #2011-34

The conduct review arose from a lawyer’s improper handling of retainers received from clients, which was identified during a compliance audit. The lawyer primarily practised in criminal defence. He billed clients on a fixed fee basis and occasionally provided the flat fee bill prior to completing all of the work, then deposited the retainer to his general account. This practice is contrary to Rule 3-56, regardless of whether the fee is a “flat fee,” as the funds must be held in trust until the services are completed. After this breach was identified in the audit, the lawyer took the Small Firm Practice Course and arranged for his support staff to complete the Law Office Management 101 course offered by the Law Courts Centre for Legal Education. He also arranged for his accountant to review his office accounting procedures to ensure compliance with the Law Society Rules.

CR #2011-35

The conduct review addressed a lawyer’s responsibilities to his clients in a joint retainer situation, and to their respective counsel. He was jointly retained by an estranged husband and wife on the sale of their matrimonial property. Each of them was represented by counsel on the matrimonial action. The wife’s lawyer had filed a certificate of pending litigation on the property and provided a discharge, on an undertaking that the lawyer hold the balance of the sale proceeds pending an agreement between the parties or a court order. The wife contacted him after the sale and told him that she could not reach her lawyer and he could release the funds to the parties’ joint account. The lawyer confirmed those instructions with the husband and took these conversations as sufficient instruction to pay out the sale proceeds. The subcommittee observed that he should not have dealt directly with the clients, when he knew they were each represented by counsel concerning the disposition of the sale proceeds. Further, the lawyer should have used the joint retainer letter from Appendix 6 of the Professional Conduct Handbook

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