Lawyers awarded $1.3M over discipline action

APPEAL JUDGMENT

DREW HASSELBACK Lawyers Beth DeMerchant and Darren Sukonick have been awarded $1.3 million in legal costs because the Law Society of Upper Canada brought an “unreasonable” disciplinary action against them.

In a decision issued Jan. 20, a five-member appellate panel boosted to $650,000 from $250,000 the legal costs awarded to each of the two corporate lawyers after they were absolved of any wrongdoing in a law society disciplinary action. Each lawyer will also receive $17,500 in legal costs for the appeals.

The law society, which regulates the conduct of Ontario lawyers, had accused DeMerchant and Sukonick of violating professional conflict of interest rules on work they did from 2000 to 2003 for Hollinger Inc. and Conrad Black. The disciplinary case was filed against the lawyers in 2006. Hearings took place over 138 days between April 2010 and July 2013.

A disciplinary tribunal absolved the lawyers of any professional wrongdoing in 2013. An appellate panel in 2015 dismissed the law society’s appeal of the disciplinary case.

In 2014, the disciplinary panel ordered the law society to pay each lawyer $250,000 in legal costs. The lawyers had sought $1.8 million each in costs, so they appealed the cost decision. The 32-page decision issued Jan. 20 wraps up the costs dispute — and it has stern words for the law society.

The appellate panel says the law society dragged out the disciplinary case against DeMerchant and Sukonick much longer than it should have. The Law Society’s case was unreasonable, lacked focus, erred in law, and wasted tribunal time, the appellate tribunal concluded.

“This hearing should never have taken nearly 140 hearing days. The law society bears the lion’s share of the responsibility for that,” states David Wright on behalf of the panel. “We award each lawyer $650,000 in costs for the hearing, representing approximately 110 hearing days that should not have been necessary.”

The panel said the appeal was warranted because the tribunal panel made errors of law. Yet the law society’s “unreasonable approach” to the appeal dragged things out longer than it should have, resulting in “wasted costs,” the panel added. The panel therefore awarded each lawyer a further $17,500 in legal costs for the appeal.