Law society plan still too soft, critics say
Not all information about bad lawyers would be released under amendment
The province wants to change the law to make it easier for the Law Society of Upper Canada to release information on bad lawyers A proposed amendment to the Law Society Act would let society officials disclose information on bad lawyers if “ there is a significant risk of harm to a person,” said a spokesman for Attorney General Michael Bryant. But critics say the proposed change does not go far enough.
It’s unclear whether it would allow society investigators to call in police when frauds like those detailed in a Toronto Star investigation were uncovered. It also does not deal with the law society’s concern that, if it passes information on, police won’t have the resources to take on these white- collar crime cases.
Conservative Leader John Tory, who’s been a lawyer for 25 years, said Bryant must toughen his proposal so it “ requires” the society to pass information to police. Tory also said Ontario has some of the best white- collar crime investigators in its police departments, but “ we just don’t have enough of them.”
“Fraud is fraud and theft is theft no matter who is doing it,” Tory said in an interview. “I think the system is letting down the victims here by not allocating the resources necessary to prosecute these people and by not fully educating the victims to what their rights might be in a situation in which they have been victimized.”
Yesterday, the Star revealed that lawyers who steal thousands — even millions — of dollars from clients rarely go to jail. Instead of being prosecuted in a criminal court, many lawyers get a lesser penalty from their professional association, the law society. The Star based its research on a five- year study of discipline cases. One was the case of William Sinclair, who stole $3 million he held in trust for 14 families, according to an agreed statement of facts that led to his being disbarred in 2003, and then funnelled the money into a Parry Sound area real estate venture. Sinclair was never criminally prosecuted.
Several factors were to blame, but one main cause was that the law society rule designed to protect client confidentiality prevents the society from telling police about bad lawyers.
Typically, the law society discovers potential criminal action by a lawyer through a spot audit or when they review a lawyer’s books after a complaint. As regulator the law society can look at a lawyer’s books. But Section 49.12 prevents any law society employee from disclosing anything it learns by looking at a lawyer’s files. The Star found that the law society routinely ( because of the law) sits on evidence of fraud for three years or more while it investigates and disciplines the lawyer. Police typically can’t get the evidence until the society has completed its investigation. The law society wants that law changed. It made a recommendation last spring to the province, asking for a change to “ give us some greater scope to share information to protect the public interest,” said Malcolm Heins, chief executive officer of the law society.
Bryant responded two weeks ago with an amendment that’s part of an omnibus justice bill that’s passed first reading in the Legislature. The amendment is discretionary and says the law society can only release information if “ there is significant risk of harm” to a person in the future. In Sinclair’s case, most of the $3 million was already stolen by the time the law society twigged to the problem.
“ I think the ( amendment) appears to be heading in the right direction but it raises a lot of questions. What is significant harm? Who gets to determine that? Is this going to be enough to ( help clients) . . . in pursuing a successful prosecution?” Tory said.
Bryant has been unavailable for comment.
Meanwhile, the Star story produced strong public response.
Clients expressed anger that lawyers were not properly investigated, either by the law society or the police. They also were frustrated that the society does not tell the public that a lawyer is under investigation. One reader told the Star that she gave $500 to Sinclair to hold a lot in the Parry Sound development while she decided whether to invest. She called the law society four years ago, at a time when the society knew Sinclair had stolen money. She was told he “a member in good standing.”
That’s normal practice for the group, which does not reveal that a lawyer is under investigation or has a series of complaints against him.
Said another reader: “It is amazing how the justice system will pursue an individual who had shoplifted a $20 DVD, but be so gentle with their own bad apples.” The Star found 105 cases where a lawyer was disbarred or suspended because the lawyer stole money or committed some other criminal- like action. Contact Kevin Donovan at 416-8694425 or at kdonovan@thestar.ca