Court of AppealCourt of Appeal confirms disbarment for misappropriation

A recent BC Court of Appeal decision confirms the Law Society’s position in discipline cases that lawyers who misappropriate trust funds can expect to be disbarred.

William Frederick McGuire appealed his May 2006 disbarment, arguing the discipline panel erred in imposing the most serious penalty available when the public could have been protected by a lesser sanction.

McGuire had been found guilty of professional misconduct relating to numerous improper withdrawals from his trust account over a 14-month period (see Law Society of BC v. McGuire, 2005 LSBC 43 and 2002 LSBC 20).

He submitted that the hearing panel effectively reversed a long-standing precedent when it said “disbarment is the remedy for deliberate misappropriation … except in highly unusual circumstances.”

This statement was inconsistent with Law Society of BC v. Ogilivie, [1999] LSBC 17, which concluded that disbarment should be reserved for those cases where prohibiting a lawyer from practising is the only way to protect the public, McGuire argued.

He claimed disbarment was unnecessary in his case because trust account restrictions imposed on his practice from the time his misappropriations came to light until his discipline hearing worked satisfactorily and protected the public.

The Court of Appeal, however, concluded the hearing panel’s comment was not a statement of law or principle but was merely a statement of the “likely outcome” of a misappropriation case.

The court also rejected McGuire’s submission that the panel had improperly equated general deterrence with protection of the public in disbarring him.

The panel said that protecting the public included not just punishing ethical failures but also ensuring other lawyers do not commit similar ethical breaches. One way to achieve that goal, the panel noted, is to impose the most severe sanctions.

McGuire agreed the Law Society must give prime importance to protecting the public, but said this could be achieved by a lesser sanction than disbarment.

The court, however, said the Law Society panel had considered all the mitigating circumstances and concluded they did not outweigh the importance of protecting the public from unscrupulous lawyers. “General deterrence can be an important means of protecting the public,” the judges added.

McGuire stopped using his general account after Revenue Canada garnished it in 1993 and started paying practice debts with money he paid into his trust account. Beginning in 2002, however, he started withdrawing more money than was available. He also began withdrawing money before billing his clients.

In December 2003, the Benchers ordered that McGuire could continue practising until his discipline hearing if another lawyer had control of his trust account. This arrangement was put in place and there were no further improper withdrawals.

McGuire argued that these restrictions should continue and that a lesser penalty than disbarment would protect the public.

The panel, however, said restrictions on a lawyer’s trust account should only be used as an interim measure pending a full examination of the lawyer’s conduct.

“Once the misappropriation has been proved, however, we cannot see how such a restriction can properly be used as a permanent condition on a lawyer’s ability to practise. To put it bluntly, a lawyer who, in light of his past conduct, cannot be completely trusted with sole control of his trust accounts should not be practising law.”