Law Times

Page 2 June 8, 2015 • Law Times www.lawtimesnews.com NEWS women continue to be more likely to suffer the ad- verse economic consequences of marriage break- down," Durbin's letter reads. "We have seen this. This needs to stop." But lifting the ban, Robinson says, would likely involve both practical and ethical problems. One of the practical difficulties with setting up contingency- fee arrangements in family law, she says, would be determining what constitutes a win given that family law cases typically involve a number of components, some of which aren't financial. "Contingency fees do work in other areas of law, but if you start looking at the specifics, if you unpack it in a family law context, how would you apply it?" she asks. "Even if you're looking just at the financial issues, you have to parse it down to, OK, what are the dif- ferent financial issues? But if you're not looking at the financial issues, you're looking at custody and access, which is a huge component of family law, and there is no financial component to that. How do you quan- tify that type of contingency arrangement?" Ethically, Robinson says, the practice threatens to take money from those, such as children, that family law seeks to protect. "If you're looking at child support and then you're saying the contingency is going to be what — a portion of the child support payment each month? There's something just inherently wrong with that, with taking money that is specifically directed for the financial support of children. The same argu- ment could be made for spousal support." Contingency fees could also lead to conf licts of interest, she says, since such an arrangement might involve only one of the financial aspects of the settlement. Maximizing the settlement in a particular financial aspect to the possible detri- ment of other areas might be in the lawyer's best interest but not the client's, she notes. "It's not go- ing to fix the problems that already exist within access to justice and that whole issue." So if not through contingency fees, how does On- tario solve the problem of access to justice in family law cases? One possibility, says Robinson, may be to increase the income threshold to qualify for legal aid. Another could involve limited-scope retainers that allow clients to seek assistance for particular issues. "It's going to be a question of, should there be some combination of these that are going to ad- dress the issue or is it going to be some magic solu- tion that no one has come up with yet?" she says. "But I don't think that contingency fees, with all the inherent confusion and difficulties that would be involved, is that answer." Nathalie Boutet, a family lawyer who specializes in mediation, says allowing contingency fees could make the already-highly rancorous family law pro- cess even more difficult. It could spur lawyers to be as aggressive as possible in order to make as much money as they can from their cases, she says. "Family law is aggressive enough as it is," she says. Boutet says she's also unsure whether there are in fact more unrepresented women than men in family law. Julie Macfarlane, a law professor at the Univer- sity of Windsor who has done extensive research on self-represented litigants, says she believes What's Market is much more than a deal summaries database. Not only can you search, review, and compare expertly prepared summaries of recent deals and fi lings – you'll see exactly how this information impacts your deal. Do you need to determine the appropriate break fee for your deal? 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Sign up for a free trial at www.practicallaw.ca 00229IF-A50787 Introducing What's Market on Practical Law Canada Insightful analysis that goes beyond deal summaries Continued from page 1 Quantifying contingency fees difficult in family law was then able to secure more loans, which they eventually de- faulted on, from other lenders. "The registration of the fraudu- lent discharge was caused by the Lowtans and relied on by them as part of a scheme to obtain ad- ditional financing from subse- quent chargees which financing would not otherwise have been available to them," wrote the judge in CIBC Mortgages Inc. v. Computershare Trust Co. of Canada. "So this numbered company has a Teraview stick, and they have credentials to go into Tera- view," says Rothman. "Because the system is not locked for anything other than ownership transfers, they were able to discharge a mortgage fraudulently. It was su- per easy for them to do." Rothman allows that both law- yers and non-lawyers can engage in fraud. But limiting the ability to register or discharge mortgages to lawyers would minimize the risk of fraud, he says, because lawyers, unlike law clerks and others, are subject to regulation by the law society and have a real estate prac- tice endorsement from LawPRO. Real estate lawyers' insurance, he says, also adds a layer of protection for the public and lenders. "Lawyers have much to lose; non-lawyers not nearly as much," he adds. His own firm, he says, al- lows only lawyers to register and discharge mortgages. Otherwise, he says, "One of my clerks could easily come in [to Teraview], com- mit a fraud, and register a mort- gage on your property that you don't owe a penny on. They could say that you owe them 500 grand. And now you have to spend legal fees and everything else to prove that's not your mortgage." When he recently approached Teranet about his concerns, Roth- man says, the company said it couldn't unilaterally make such a change without direction from the province. So he has since ap- proached Ontario's Ministry of Government and Consumer Ser- vices about the matter. Asked to comment on Roth- man's allegations that the cur- rent rules leave Teraview open to fraudulent use, a spokeswoman for the Ministry of Government and Consumer Services didn't respond directly. "Title integrity is of paramount concern in On- tario's land registration system," said Anne-Marie Flanagan. "As such, we take fraud very seriously." In 2006, the province passed legislation allowing only lawyers to sign land transfers "after exten- sive input from the real estate bar, and other members of the real es- tate industry," she noted. "While we cannot comment on the Computershare case, which we understand is under appeal, we can confirm that the land registration system will continue to consider additional options that will be effective to prevent title fraud." Rothman isn't the only real estate lawyer concerned about the current regulations govern- ing Teraview. Andrea White, a partner at Shibley Righton LLP, says the current system allows certain people not even associ- ated with a law firm, such as title searchers, access to Teraview. "It's very unnerving for a law- yer because when you see a dis- charge statement and someone inserts your name, you have no way of knowing if they were au- thorized," she says. The new rules the province introduced in 2006 "substan- tially stemmed the issue," she adds. And if Ontario adopts Rothman's suggestions, mort- gage fraud should continue to decline, she suggests. White says the province may find itself under mounting calls to act. "If the banks and people are finding that this is going to be a new way of fraudulently dealing with things, I'm assuming there will be a fair amount of pressure on them — by the banks in par- ticular — to make changes." LT Teranet reforms urged Continued from page 1 contingency fees do hold the potential to permit more access to jus- tice but adds that allowing them would require regulation of issues such as how much a lawyer could charge. Of much better benefit to financially challenged family law litigants, says Macfarlane, would be to allow paralegals to do family law work. "Lifting this restriction would make an enormous difference to many, many people who cannot afford lawyers," she says. For its part, Ontario's Ministry of the Attorney General defended the current ban. "Contingency fees may give lawyers an inappropri- ate share of often scarce family resources," said ministry spokesman Brendan Crawley. "This may have a negative impact on children, in particular, by reduc- ing the amount of money available to maintain them at acceptable levels." Moreover, Crawley said, contingency fees would be inappropriate in dealing with aspects of family law, such as divorce and custody and access proceedings, that don't involve a monetary award and aren't conducive to settlements in the best interest of the children. "Also, contingency fees could impede the reconciliation of estranged spous- es by fueling litigation between them," he said. British Columbia, Saskatchewan, New Brunswick, and the Yukon, Crawley noted, now either restrict or demand court approval for con- tingency-fee arrangements in family law cases. LT

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