PRACTICE WATCH, by Barbara Buchanan, Practice Advisor

Temporary practice in other jurisdictions; unrepresented parties; loans to clients; solicitors’ legal opinions; bad cheque scam

Woman sitting on cabin porch with computerEnjoying your visit to Alberta? Great – just don’t advertise it

You’ve rented a cabin in Alberta’s Kananaskis region and are considering making it a working holiday. You consult with the Law Society of Alberta and are satisfied that you meet all of its requirements to provide legal services on Alberta law as a visiting BC lawyer. You plan to provide some of the services while still in BC (by telephone and email) and some later on while at the cabin. You ­figure that, while you’re there, you may as well ­advertise your services in the local ­newspaper.

Wrong! You must not advertise yourself as willing or qualified to accept new clients in Alberta. Similar restrictions apply in other jurisdictions as well. For example, a visiting lawyer from any Canadian province is not permitted to advertise or hold her or himself out as willing to accept new clients in BC. By doing so, the lawyer would establish an economic nexus in BC, would no longer be eligible to practise law on an occasional basis in BC, and would be required to cease doing so immediately.

BC lawyers desiring to temporarily practise in another province should obtain information from that province’s law society. The three territories require a special permit. For more information, see the Law Society website (Public > Legal Information and Resources > Law Societies).

BC Code obligations for dealing with unrepresented parties

Unrepresented parties may choose to self-represent for a number of reasons, including the costs of legal representation or a belief in their own advocacy skills. In difficult family law cases, a party may be angry, aggressive and unreasonable. The party may want to punish your client, and you may become a target as well. What do you do?

The main BC Code rule governing a lawyer’s relationship with ­unrepresented parties is rule 7.2-9. Paragraphs 7 to 9 of Appendix C provide additional guidelines for dealing with unrepresented parties in real property transactions. Rule 7.2-9 states:

7.2-9 When a lawyer deals on a client’s behalf with an unrepresented person, the lawyer must:

(a) urge the unrepresented person to obtain independent legal representation;

(b) take care to see that the unrepresented person is not proceeding under the impression that his or her interests will be protected by the lawyer; and

(c) make it clear to the unrepresented person that the lawyer is acting exclusively in the interests of the client.

Commentary

[1] If an unrepresented person requests the lawyer to advise or act in the matter, the lawyer should be governed by the considerations outlined in this rule about joint retainers.

Rule 7.2-9 contains strong wording. Notice that it requires a lawyer to urge (rather than to “suggest”) the person to obtain independent legal representation (the Code makes a distinction between independent legal advice and independent legal representation). Take care to ensure that the unrepresented party understands your role. While the rule doesn’t require it, I recommend that you confirm the elements of rule 7.2-9 in writing so that there is no misunderstanding. You may also wish to provide information about how you will communicate with the unrepresented party. This is particularly advisable if a party contacts you excessively or in an abusive manner. If you are upset by an offensive comment, keep your cool. Be calm and objective and maintain a professional and courteous tone (rules 7.2-1 and 7.2-4). Answer professional letters and communications with the reasonable promptness that you would accord to a lawyer (rule 7.2-5).

It may increase a client’s legal bill to have an unrepresented party on the other side. Explain this to your client. You may even want to include language about this in your retainer letter. While you won’t give legal advice to the opposing party, you may have to provide more information than usual to move your client’s case along.

Thinking of making a loan to a client? Read the BC Code

Though lawyers are not prohibited from lending money to clients in all circumstances, in some cases it would not be permitted because of a “conflict of interest.” A lawyer must not act or continue to act for a client where there is a conflict of interest, except as permitted by BC Code rule 3.4-1. The Code defines a “conflict of interest” as follows:

1.1-1 “conflict of interest” means the existence of a substantial risk that a lawyer’s loyalty to or representation of a client would be materially and adversely affected by the lawyer’s own interest or the lawyer’s duties to another client, a former client, or a third person. [emphasis added]

A lawyer must consider whether and how the lawyer’s professional judgment would be affected by the lawyer’s or anyone else’s relationship with the client, or interest in the client or the subject matter of the legal services. Any relationship or interest that affects a lawyer’s professional judgment is to be avoided (rule 3.4-26.1).

Rule 3.4-28 requires that a lawyer must not lend money to a client unless:

  • the transaction is fair and reasonable;
  • the client consents; and
  • the client has independent legal representation with respect to the transaction.

Rule 3.4-34 states:

3.4-34 If a lawyer lends money to a client, before agreeing to make the loan, the lawyer must

(a) disclose and explain the nature of the conflicting interest to the client;

(b) require that the client receive independent legal representation; and

(c) obtain the client’s consent.

Remember that “consent” is a defined term and has a written component (rule 1.1) and that the Code distinguishes between independent legal advice and independent legal representation (rules 3.4-27 and 3-4-27.1).

New! Solicitors’ legal opinions – materials, guidelines and sample letters posted to website

Since 1987, a group of lawyers referred to as the Solicitors’ Legal Opinion Committee has been reviewing opinion materials and preparing guides for British Columbia. The committee comments on major issues that disrupt legal opinion practice by advising lawyers of such issues and of what the committee considers to be the related general practice in BC. The committee is not a Law Society committee but has made its materials available on our website. Go to Lawyers > Practice Support and Resources > Education and other resources. A contact list of committee members is also provided, if you require further information.

New variations on the bad cheque scam – mergers, surety bond services

The bad cheque scam continues to spin as phony new clients approach lawyers for ­legal services. Scamsters try to dupe a lawyer into depositing what appears to be a genuine certified cheque, regular cheque, bank draft or money order, into trust. ­Relying on the strength of the deposit, a lawyer then pays funds out of trust to the “client.” After the funds are paid out, the lawyer discovers that the instrument deposited was a well-made fake, leaving the lawyer’s trust account short and often overdrawn.

Two variations on the scam that have recently appeared in BC are phony mergers and surety bond service claims. Hiroshi ­Fujinoo, posing as the president of ­Denkyosha Co., Ltd., claimed to want legal representation for a merger with another company. John Joseph, purporting to work for Trammel, Harper and Williams Inc., claimed to need representation in relation to surety bond services. The ordinary ruses continue as well, e.g. Akio Wu Ryo (collection on a phony commercial loan), Gary Seiders (collection on a phony personal loan) and Li Wei (collection on a phony overdue business account).

Note that there may be real people with the same names as those in the scams. It may be a coincidence or they may themselves be the victims of a fraudster, but they are not suspected of wrongdoing.

Remember to read the Fraud: Alerts and Risk Management section of the website to learn how to protect yourself from these and other scams. See the bad cheque scams names and documents page for more information on the above scamsters and others, and a wide range of phony ­documents including loan agreements, promissory notes, bank drafts, identity documents and claims.

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.


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