Law Times

Law Times • augusT 6, 2018 Page 7 www.lawtimesnews.com Is LSO discipline catching up with the times? BY DORON GOLD I 'm frequently asked how I think the legal profession in Canada is doing in being more thoughtful, compassion- ate and constructive around issues of mental health and addictions among its members. It is not unusual to hear lawyers state that their law societies don't care about lawyers. It's a good reason, they surmise, to avoid at all cost having that regulator become aware of their struggles. And so, when I'm asked about the profession's progress in this area, my go-to metaphorical response is to allude to a mega-tanker out on the ocean, making a deliberate but labouring turn. In other words, the direction is chang- ing but very, very slowly. But there may be progress when it comes to law societies and their discipline processes. Those pro- ceedings are, indeed, designed primarily with the protection of the public in mind, borne of those societies' explicit legislative mandates. The administration of justice must be held in high repute by citizens in order for it to remain trusted and relied upon by the public. That said, a sophisti- cated, thoughtful legal regulator is one that must also respect the difference between wilful, malevolent action and inadvertent, unintentional behaviour. It can be well analogized to the crimi- nal law standard that requires both mens rea (a guilty mind) and actus reus (a guilty act). Those who act improperly but who did not do so intentionally are sometimes found not criminally respon- sible and those people are re- quired to receive treatment so as to ensure that the act will not occur again. Professionally speaking, it is a matter of capacity, not discipline. Larry Banack, a Law Society of Ontario bencher, stated as much in the 2013 case of Law Society of Upper Canada v. Vader, involving a paralegal who failed to respond to law society correspondence, a condition that occurs a great deal with people suffering from depression and/or anxiety. Banack dismissed the complaint against Vader. In the case, Banack stated, "A discipline process leading to the penalty phase con- sideration of specific and general deter- rence is wholly inapplicable when the in- appropriate conduct is caused by mental illness." He stated that, "in reaching this conclusion, I have considered that if some other recognized medical condition, such as a broken back, paralysis or coma, in- terfered or prevented a licensee from ful- filling an obligation to the law society, I am satisfied that such situation would be considered in determining whether the licensee had engaged in professional mis- conduct for failure to co-operate, respond or provide information to the law society. "The existence of mental illness should be treated no differently." This type of sensitivity and insight is relatively new com- ing from a law society. But it's taking hold. In its 2016 Men- tal Health Strategy Task Force report, the Law Society of Ontario included a section on regulation and discipline that included the stated intention to "consider proactive steps to address repeated licensee fail- ure to respond to Law Society correspondence, where mental illness or addictions issues are suspected." In B.C., the law society's Mental Health Task force included a plan to "develop an integrated mental health review concern- ing regulatory approaches to discipline and admissions." And in Nova Scotia, the barristers society has initiated a volun- tary Fitness To Practice program, which provides a diversionary process, where appropriate, for lawyers with a capacity- related conduct issue. Where the issue is capacity and not discipline, a more ap- propriate process is offered. All of these are heartening signs of progress. Further evidence of this evolution is demonstrated in two other very recent Ontario discipline cases. This past June, in Law Society of Ontario v. Burtt, the com- plaint against Jeffrey Gordon Alexander Burtt was dismissed because the law soci- ety was found to have failed in its duty to accommodate Burtt's disability under the Ontario Human Rights Code. Like Vader, he had not been able to respond to the law society due to the impact of a depressive condition that was well documented. A month later, in July, in the case of Law Society of Ontario v. Yantha, a case about overbilling, the tribunal took Darwin Anthony Yantha's substance use and depression diagnosis into account in permitting him to resign instead of having his licence revoked. The tribunal accepted that "the Licensee's depression and alcoholism made him reckless" and that "his depression and alcoholism are causally connected to the misconduct we found." But, it found that the public inter- est required that he not be permitted to continue to practise because he "might well misconduct himself in the same way again, since we saw no evidence of his full acceptance of the seriousness of his con- dition and the recommended treatment." Compassion tempered by prudence. We are all witnessing the discipline process for lawyers make a turn firm- ly into the 21st century. The times are changing for the better. LT uDoron Gold is a registered social worker who is also a former practising lawyer. He works with lawyers and law students in his role as a staff clinician and presenter with the Member Assistance Program as well as with members of the general public in his private psychotherapy practice. He's avail- able at dorongold.com. Panama Papers and solicitor-client privilege BY REBECCA BROMWICH W ith the recent release of another 1.2 million files in data from a further "Panama Papers" leak, there are re- newed questions being asked inter- nationally around the complicity and facilitation of money laundering by lawyers. Following the contro- versy, Canadians should be looking closely to ensure our legal profession is not a weak link where money could be laundered. First, some background. Since 2015, a massive num- ber of documents — 11.5 million — have been leaked in what is now known as the Panama Papers. The documents involved the investing methods of the now-shuttered Panama-based law firm Mossack Fonseca and a host of its clients from around the world. The original Panama Papers leak took place in 2015, with the information then released in 2016 detailing financial and solicitor-client information concerning more than 214,000 offshore entities. Some of these offshore entities are entirely legal. Other documents link high-profile figures around the world, such as the then-prime minister of Iceland, the king of Saudi Arabia and the prime minister of Pakistan to shell companies and investments. Iceland's then-prime minister, Sigmundur David Gunnlaugs- son, resigned after the papers were released. In Canada, none of the funds has been recovered yet by the Canada Revenue Agency, which told a media outlet earlier this year that it was auditing 123 people and companies as a result of the leak. The Mossack Fonseca firm itself closed this past March, after the firm's founders — Ramon Fonseca and Jurgen Mossack — were charged in Brazil in rela- tion to allegations of money laundering and corruption in 2017. They are still awaiting trial. In 2017, the release of the Panama Papers was fol- lowed by an even larger leak, dubbed the Paradise Pa- pers. This was a set of 13.4 million confidential elec- tronic documents leaked from the law firm Appleby. These documents also relate to offshore investments, all of which the firm claims are legal, held by more than 120,000 individuals and entities. This makes me wonder: What kind of protections do Canadians have from legal regulators when it comes to firms such as those affected by the leaks? Put more directly: Is ours a properly regulated jurisdiction? The Supreme Court of Canada in Canada (Attor- ney General) v. Federation of Law Societies of Can- ada, 2015 SCC 7, [2015] 1 S.C.R. 401 confirmed that Canada's provincial and territorial law societies have the jurisdiction to regulate lawyers when those lawyers claim that documents in their possession are privi- leged. In my opinion, this is tantamount to leaving the sole jurisdiction to regulate the conduct of lawyers suf- ficiently to prevent and curtail lawyers' involvement in money laundering, ousting the jurisdiction of fed- eral authorities, which otherwise regulate and control money laundering in other sectors. Consequently, this decision places a high burden on law societies as regu- lators. The scope and magnitude of the global problem of money laundering as revealed by the Panama Papers and the Paradise Papers calls into question the extent to which law societies are positioned to effectively combat the use of law practices as shields for money launder- ing as well as what capacity legal regulators as currently constituted reasonably have to do so in future. The magnitude of this problem is underscored by the Fi- nancial Action Task Force, the intergovernmental body developing and promoting policies to combat money laundering and terrorist financing, in a 2016 report. The report specifically raised concerns about the vulnerability of the Canadian legal services sector to money laundering, which presents a weak link in an otherwise strong regulatory framework. The FATF report states that "Canadian legal entities and legal arrangements are at a high risk of misuse for [money laundering/terrorist financing] purposes and that risk is not mitigated." The Supreme Court of Canada's judgment in the Federation of Law Societies case rests on a concession that money laundering is a global problem. Because this point was conceded, the SCC did not look into the details of the current magnitude of money laun- dering in our globalized economy. Consequently, the decision did not include a contextual assessment of the capacity of law societies to address money laun- dering in Canada. I do not doubt that the law societies are well inten- tioned. I do wonder, however, whether the resources of these law societies are up to the task. In Federation of Law Societies of Canada, Justice Thomas Cromwell, writing for a majority of the Su- preme Court of Canada, held certain provisions of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, S.C. 2000, c. 17 as unconstitutional. "I would declare that s. 64 is of no force or effect and that ss. 62, 63 and 63.1 should be read down so that they do not apply to documents in the possession of legal counsel or in law office premises," said the ruling. The consequence of this is that neither regulatory authorities nor the RCMP can search or seize docu- ments from lawyers' offices if solicitor-client privilege is claimed in relation to those documents. Thus, by operation of the Federation of Law Societies decision, our legal regulators are tasked with independently ad- dressing any concerns about potential lawyer facilita- tion of money laundering or terrorist financing. This situation speaks to a need to better resource the legal regulators or to legislatively move jurisdiction over money laundering to government regulators more up to the task. As our country has left the curtailment of lawyers' involvement in money laundering up to our provincial and territorial law societies, the scope of the global problem strongly suggests that we need to either publicly resource legal self-regulators or publicly take on the task of curbing money laundering. The scope of money laundering as a problem — as revealed in the Panama Papers and Paradise Papers leaks — indicates a crisis situation speaking to a need for state action, ei- ther through funding, legislative action or both. LT uDr. Rebecca Bromwich teaches and researches crimi- nal law and conf lict resolution in the Department of Law and Legal Studies at Carleton University, and she is co-editor of the RobsonCrim blog. u SPEAKER'S CORNER COMMENT The Lawyer Therapist Doron Gold

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