Lawyers’ victims receive payout
Probe found gap in compensation system
TORONTO • A man who lost hundreds of thousands of dollars because of a negligent lawyer has finally received partial compensation years after winning a court judgment that has proven unenforceable.
The $150,000 payout to Nalliah Balachandran late last month came after The Canadian Press reported in December on a glaring gap in the insurance system designed to protect victims of unscrupulous or incompetent Ontario lawyers.
“This money will help,” Balachandran said. “At least I can pay off some debts.”
Balachandran, 64, now of Calgary, had been unable to collect on $188,646 in damages an Ontario Superior Court justice awarded him in 2012 against lawyer Michael (Mike) J. Webster, who was disbarred after an avalanche of complaints.
Other cases The Canadian Press reviewed turned up several people who had lost out on compensation for carcrash injuries or ended up in jail because lawyers failed to do their jobs. None was able to collect on court-ordered damages, even though all members of Ontario’s legal profession must carry liability coverage through the company known as LawPro.
Despite judicial criticism of the situation, LawPro denies coverage when lawyers fail to report a client’s claim against them or refuse to help defend the action. The result is usually disbarment — and clients left without access to compensation.
Several lawyers trying to help hapless clients expressed dismay LawPro, owned by the Law Society of Ontario and with assets of close to $735 million, would take that position.
What lawyers involved in such cases said they had never heard of is a policy the law society adopted in 1997. It provides victims of lawyers access to an internal compensation fund when LawPro declines coverage. The fund can reimburse victims up to $500,000.
Days after an interview with its treasurer last November, the law society updated its website to explicitly refer to the obscure policy. Five claims, including Balachandran’s, have since been made against the fund, one quarter of all claims in 1997. Two have been settled.
Over the past 20 years, a spokeswoman said the fund has paid out a total of $552,565 for 14 claims involving 13 lawyers — a fraction of the $100-million LawPro lays out for claims annually.