Law Times

PAGE 2 LSUC amends Rules of Professional Conduct Lawyers could land in hot water if they're used by general public to commit fraud NEWS BY KENDYL SEBESTA Law Times T hot water if they're used by the general public to commit fraud or a crime. Convocation approved the changes to he Law Society of Upper Canada has approved an amendment to the Rules of Professional Con- duct that could land lawyers in the rule on April 26. Under the new rule, lawyers will now be accountable for not protecting themselves against being used by a client or any member of the public to engage in illegal conduct. The rule previously stated that lawyers such cases before the law society in the last few months. In January, a law society appeal panel In fact, there have been at least two found Toronto real estate lawyer Selwyn McSween guilty of professional mis- conduct for "completely abdicating his professional responsibility" to a law clerk, Maureen French, who allegedly carried out 10 fraudulent mortgage transactions while working for him. More recently, a panel found Hamil- against advising "any other person" in breaking the law. The move represents the first time the must not "knowingly assist in or encour- age any dishonesty, fraud, crime or illegal conduct" and can't advise a client on how to violate the law and avoid punishment. The new rule will also warn lawyers rule will explicitly require lawyers to pro- tect themselves against being used by the general public for illegal purposes. "We feel it is necessary to amend the rule to reflect current jurisprudence," 'I can guarantee the rule will not be targeting lawyers in cases of identity theft who happen to fall victim to a crime,' says Paul Schabas. Paul Schabas, chairman of the law soci- ety's professional regulation committee, told Convocation. "We are suggesting to Convocation today that the phrase 'when acting for a client' be omitted and replaced with 'when acting for a client or any other person' so that if a lawyer is found to be a tool or dupe of anyone, it will equate to pro- fessional misconduct." The professional regulation committee began considering amendments to the rule in January. Among the considerations at that time was the question of whether the rule should be more specific in describing pro- hibited conduct. Currently, the majority of law society ton, Ont., lawyer Michael Puskas to have engaged in professional misconduct aſter a paralegal who had worked with him, Shellee Spinks, stole $893,000 from his trust account. Still, several benchers voiced con- or dupe, to describe both the client and the victim," he said. "The language is confusing. Law society Bencher Alan Silverstein " examples of what being used actually means," he said. Bencher John Campion agreed. In his expressed similar concerns, saying the rule should do more to educate and protect lawyers. "I think it would be helpful to have view, the "broad language" of the rule could also be a problem. "This could potentially pose a huge prob- lately, there should be a special section for mortgage fraud and the rule should list the kind of red flags lawyers are expected to be particularly wary of. investigations into mortgage fraud and other dishonest conduct arises out of solicitor-cli- ent relationships covered by the existing rule, the committee noted. But in some cases, the committee found the person orchestrating the alleged fraud wasn't the lawyer' someone associated with that person. s client or lawyers should be on guard for but states that they should protect themselves from becoming a party to illegal activity. Part of the amendment would include changing the rule to say that a lawyer "shall take all reason- able measures to avoid becoming the tool or dupe of an unscrupulous client." But Sandler said the revamped rule should omit the term "tool or dupe." Currently, the rule doesn't spell out what " cern about the rule during Convocation proceedings last month. They called for more clarification before making addi- tional changes. "The rule really needs to be articulated more clearly," said Bencher Mark Sandler. "Given the wide range of mortgage frauds Campion. "The rule is really pretty broad and, I think, very dangerous." But Schabas was quick to quash those lem for members of the bar who become victims of [identity] theſt, for example, " said concerns. He told Convocation the changes to the rule wouldn't target lawyers who had truly become victims of crime as in cases of identity theſt. "I can say that that certainly would not be the case," said Schabas. "I can guarantee the rule will not be targeting lawyers in cases of identity theſt who happen to fall victim to a crime. According to the professional regulation division's quarterly report, the law society " received 302 cases of professional miscon- duct during the first quarter of 2012. At the end of the first quarter, the report noted, there were 84 new mortgage fraud cases. This year, the law society is expected to "We shouldn't use the same words, tool spend roughly $25 million on professional regulation. That figure is up from $22 mil- lion last year. Despite the concerns, Convocation approved the amendment, meaning it's cur- LT rently in effect. May 7, 2012 • Law TiMes Now Accepting Applications for Classes Starting in September 2012 Part-time, Executive LLM program for corporate counsel and practising lawyers Information Sessions Wednesday, December 7, 2011 5:30 - 7:00 pm Friday, December 9, 2011 8:00 - 9:30 am Wednesday, May 23, 2012, 8:00 - 9:30am Thursday, May 24, 2012, 5:30 - 7:00pm U of T Faculty of Law, Faculty Lounge 78 Queen's Park, Toronto No registration required. Please feel free to drop in anytime during these hours. Taught by U of T Faculty of Law professors, together with top international faculty from INSEAD Business School, NYU School of Law, and Rotman School of Management. 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