Discipline dichotomy

Discipline dichotomy
Few recent legal scandals have generated as much Sturm und Drang as the one caused by Winnipeg lawyer Jack King. Years ago, he tried to coerce a client into having sex with his wife, Lori Douglas, today an associate chief justice in Manitoba. This past summer, the salacious details of King’s actions were exposed during a Canadian Judicial Council hearing set up to determine whether Douglas should remain on the bench.

Yet what got obscured in all of the titillating evidence and testimony is whether this train wreck could have been avoided if the Law Society of Manitoba had opened a formal investigation into King back in 2004 when they first learned of his actions — a year before Douglas was first appointed to the bench. “The law society completely failed the public in this case,” insists Rocco Galati, the Toronto lawyer who currently represents Alex Chapman, the client King had tried to finagle into his sexual escapade. “It completely failed the public.”

Was the law society reluctant to pursue King because he was a partner at one of Manitoba’s oldest law firms — and one that boasts ties to the law society itself? Or did the law society harshly punish the sole practitioner who first represented Chapman in this dispute because members of King’s old firm sat on the law society’s complaints investigation committee?

If so, it would not come as a great shock. After all, it’s a dirty little secret within the legal profession that Canada’s law societies overwhelming prosecute solo or small firm lawyers compared to those who toil for big firms. Alice Woolley, a law professor at the University of Calgary and leading expert on lawyer discipline, says it’s “empirically demonstrative” this is the case. “And it means that certain areas of practice are more effectively regulated than others,” she maintains. In a recent paper, Woolley examined the track records of five provincial law societies and concluded 87 per cent of the lawyers disciplined in 2009 were either sole or small firm practitioners while none who belonged to a very large or national firm were disciplined. “So do we have the most proactive and sophisticated and innovative regulation of lawyers that we could in Canada?” she muses. “I think the answer is no.”

The often questionable nature of how regulators discipline lawyers is highlighted by the Joe Groia affair. One of Canada’s top securities lawyers, Groia runs a boutique law firm, Groia & Co., in Toronto. In 2007, he managed to get John Felderhof, a former executive with Bre-X Minerals Ltd., acquitted of insider trading in a hard fought case against the Ontario Securities Commission. But during the bruising legal odyssey, Groia was criticized by two appellate judges for his courtroom behaviour. In 2009, the Law Society of Upper Canada charged him with professional misconduct for “incivility” — a crime prone to subjective interpretations.

The cost by LSUC to prosecute Groia, which included weeks of hearings in 2011 and 2012, was at least $250,000 (and it cost Groia another $1 million to defend himself). Yet the entire case was roundly condemned by many lawyers as a waste of money with damaging repercussions to litigators. Prominent barristers like Edward Greenspan and David Roebuck criticized the law society, with even long-time bencher Clayton Ruby calling concerns about incivility “the obsession of small minds.” Groia himself feels if he was a partner with a big Bay Street law firm, the law society would not have pursued him. Last summer, the law society found Groia guilty of professional misconduct and at press time was still considering whether to suspend him for up to four months and make him pay costs of $250,000.

For critics, the Groia case highlights the peculiarities of whom law societies choose to make examples of. “Law societies are extremely slapdash about all aspects of their disciplinary proceedings,” remarks Philip Slayton, a former Bay Street lawyer, law school dean, author of Lawyers Gone Bad and Canadian Lawyer columnist. “They are not tightly run, carefully run ships. It’s not a question what penalty they impose. It’s a question of how they decide about who they go after in the first place. Why did the LSUC decide to go after Groia and why not go after someone else? The history is very, very poor and gives you no faith in law societies properly, appropriately, and even-handedly disciplining members.”

Law societies can put up blinders to ruinous effect and few cases highlight this more than that of Eric Belhassen. A Montreal lawyer who practised commercial litigation, Belhassen was called to the bar in 1978 and complaints against him began to arise almost immediately. By the mid-’80s, four complaints had been filed with the Barreau du Quebec. In 1990, its investigations committee issued a report concluding Belhassen was incompetent and posed a danger to his clients and recommended his license be yanked. Instead, the Barreau simply ordered Belhassen to take some refresher courses.

In 1993, one of Belhassen’s clients, Christina McCullock, complained to the Barreau about Belhassen’s poor legal work, which included appearing for both the plaintiff and defendant in court. But the Barreau dragged its heels before doing anything about her complaint, only disbarring Belhassen five years later (and only for five years, although Belhassen no longer practises law). So McCullock sued the Barreau for failing to protect the public, saying it knew for years he was incompetent before acting. Unable to find or afford a lawyer, she pursued the case on her own. The Barreau, joined by the Federation of Law Societies, fought her all the way to the Supreme Court.

In 2002, Quebec’s Superior Court ordered the Barreau to pay McCullock $25,000, noting it had not dealt with her concerns in good faith and its failure to act promptly had given Belhassen full leave to continue to practise for nearly 10 years after the decision to hold the first inquiry into his professional duties had been made.

Then there is Anthony Merchant, a high-profile and controversial Regina-based class action lawyer who is most famous for helping to secure the $1.9-billion residential schools settlement. Merchant’s law firm, Merchant Law Group LLP, employs numerous lawyers and has offices across Canada and is most famous for launching dozens of class action lawsuits, especially over faulty products. Yet, since the mid-1980s, Merchant has been found guilty of conduct unbecoming a lawyer five times, most recently last year. His sins included sending out misleading solicitation letters to potential class members of lawsuits, saying anyone who signed up would not have to pay costs when, in fact, they might have to; of ignoring a court order to pay a party monies from his law firm’s trust account, and then pocketing those funds himself; and of willfully breaching a court order for paying sums into court.

Moreover, in a series of court cases, Merchant has also been reprimanded by judges, one of whom said Merchant offered “false testimony attempting to provide an evidentiary basis for a non-existent agreement.” In fact, Merchant was once convicted for criminal mischief while working for Colin Thatcher, the former premier of Saskatchewan who was later found guilty of arranging the murder of his wife.

Alice Woolley has studied Merchant’s track record and believes — despite its rulings against him — Saskatchewan’s law society has been too lenient on him, especially when compared to what judges have said about Merchant’s behaviour. She surmises this might be because he is a big fish in the small pond of Saskatchewan’s legal community, which has only 1,500 lawyers. “I would say that the law society has not dealt as effectively with Mr. Merchant as the courts have done in terms of addressing specifics of his conduct and in terms of imposing appropriate consequences on his behaviour,” says Woolley.

But few recent cases of law society laxness can top the Jack King affair. Called to the bar in 1980, King is a family law lawyer who became a partner at Thompson Dorfman Sweatman LLP, one of the largest firms in Winnipeg whose origins date back to 1887.

In the spring of 2003, King was finishing up the divorce of Alex Chapman whom he invited to a local bar, then urged his client to visit a web site called darkcavern.com and to look for pictures of someone called “White Princess.” When Chapman finally checked it out, he discovered nude pictures of Lori Douglas, King’s wife who was also a lawyer and partner at the same firm. King also sent dozens of these same pictures to Chapman.

King then set up two rendezvous in restaurants so Chapman and Douglas could meet. King made it clear he wanted Chapman to come to their home and have sex with Douglas, sending e-mails and phone messages encouraging Chapman to comply. It remains unclear how much Douglas knew of what King was up to, although evidence indicates she was unaware of the full extent of his actions.

Chapman later said (in a complaint he lodged with the law society in 2010) he initially played along because he wanted King to finish his divorce. Finally, upset at how things were progressing, and perhaps seeing an opportunity to make some money, Chapman retained Ian Histed, a Winnipeg lawyer who runs Downtown Legal Action. Histed wrote to the law firm saying King was “sexually harassing” Chapman. TDS confronted King with the allegations, who admitted they were true. He was asked to leave the firm. No one reported the matter to the law society. King broke the news to Douglas about what he’d done — she was devastated but stayed with him.

Through Histed, Chapman demanded $100,000 from King. In response, King hired William Gange, a Winnipeg-based litigator and a law society bencher. Eventually they settled on $25,000 and the destruction of the incriminating photos and e-mails. Saying he was suffering from depression and stress, King stopped practising law for a few months and sought psychiatric counseling. But in the middle of the settlement talks between Histed and Gange, Histed was informed by the law society that it had begun an inquiry into him based on a complaint submitted by one of his former clients — a mentally unstable woman fighting to prevent her child from being removed from her care. The law society claims there was no relation between the timing of this complaint and the King affair. The investigating lawyer once worked at TDS and knew King and Douglas.

When Histed’s former client’s complaint came before the law society’s complaints investigations committee, Histed objected, saying that TDS lawyers sitting on the committee might have a conflict of interest. Allan Fineblit, CEO of the law society, tells Canadian Lawyer Histed did not initially spell out why this might be, and did not reference the King matter. Nonetheless, the committee decided charges of professional misconduct should be laid against Histed. In the spring of 2004, as part of a motion to have the case against him thrown out, Histed detailed to the law society what King had done in order to demonstrate why three members of the complaints committee sitting in judgment of him had conflicts of interest: two were partners at King’s former firm and the other, Gange, had been King’s lawyer. The law society’s director of discipline had also worked at TDS. Histed said the case against him should be tossed due to the perception of bias. His appeal fell on deaf ears and the law society eventually slapped Histed with an $18,000 fine and one-month suspension over his former client’s complaint.

This was not the only run-in Histed was having with the law society. In 2003, he was fined $3,000 for refusing to return some documents to the Crown. Then, in 2008, he was fined and ordered to pay costs totaling $10,000 because in a letter sent to the Department of Justice he offered the opinion that a judge being considered to hear a residential school case was a “bigot.” The law society rejected his Charter free speech defence.

King, on the other hand, was getting much gentler treatment. Now the law society knew many of the details of what he had done — it eventually contacted Gange, who gave a dramatically sanitized version of the story in an August 2005 letter, saying King merely encouraged Chapman to have an “affair” with Douglas and then inferred Chapman had shaken King down for money. Gange made no mention of photos on a web site. In the letter, Gange did admit “that it is likely that had this matter been referred to the Investigations Committee, it would likely have found the behaviour to be inappropriate” before offering the opinion that King still would not have been punished.

According to Histed, the law society did not contact either himself or Chapman to get their version of events. Instead, in 2005, Fineblit decided that in the absence of a client’s complaint they would not open an investigation into King. Today, he says they always initially take a remedial approach and when he made his enquiries, the King matter seemed to have been resolved to everyone’s satisfaction. He says in the case of complaints against Histed the remedial approach was not an option because Histed refused to admit he had done anything wrong (unlike King).

In 2005, Douglas was appointed to the bench, although what her husband had done was common knowledge within the Manitoba legal community. The law society gave its seal of approval to the Office of the Commissioner for Federal Judicial Affairs, saying Douglas was a member in good standing. By then King had returned to practising law at another Winnipeg firm. Douglas was elevated to the position of associate chief justice in 2008.

But everything began to unravel two years later when Chapman came to believe one of Douglas’ colleagues on the bench was biased against him in a lawsuit Chapman had launched against Winnipeg’s police force. Angry, Chapman decided to go public and sue King, Douglas, and their former firm over the 2003 sexual dalliance. He also launched complaints against King with Manitoba’s law society and Douglas with the Canadian Judicial Council. This time the law society opened a formal investigation into King. In 2011, it hit him with a $13,650 fine and a reprimand for his conduct.

Did the law society come down hard on Histed while protecting King, a veteran barrister with a prominent law firm? Fineblit denies this, pointing out the courts have upheld their rulings in Histed’s discipline cases. Still, Fineblit indicates when more information came out in 2010 about what exactly King had done, it seemed more detailed and troubling than he’d been led to believe years earlier.

In the end, it’s safe to say if Manitoba’s law society had conducted a thorough investigation in 2004 of King’s behaviour — and spoken to Histed and Chapman — the media circus that engulfed the CJC hearings last summer might well have been avoided. And the embarrassing photos of Douglas would not have ended up on the Internet all over again.

And then there is the case of T. Sher Singh, once one of Canada’s most high profile and respected barristers. Today, the 63-year-old works as a writer and runs a Sikh arts and cultural web site from an apartment he rents in the village of Mount Forest, Ont.

From 1985 until he was disbarred in 2007, Singh was a litigator with a sterling reputation and a recipient of the Order of Canada. He’d articled at McCarthy Tétrault LLP and practised at the now-defunct Goodman & Carr before opening his own practice in Guelph, Ont. “I was a gladiator for my clients,” he tells me at one point when we meet at roadside diner near Toronto. Yet Singh recalls when he started his career, he’d been warned by one of his mentors to stop being a litigator after seven years or risk getting burned out. Despite wanting to heed this advice, Singh practised more than twice that long. By 2005, he was indeed burned out and finding it harder to deal with any situations of conflict or combativeness.

Just as he was weighing his options, he says he received an appealing offer from the Law Society of Upper Canada. “Out of the blue I got a call from a headhunter asking if I would consider a job,” he recalls. The LSUC was looking for someone to head up its employment equity department, designed to encourage the legal profession to be more welcoming to women and minorities. Singh had a lengthy interview with a dozen benchers, who quickly offered him the job. They agreed on a salary, a start date, designated him an office and secretary, and told him to start shutting down his practice. But as the day for him to take up the post drew closer, he says he noticed signs of unresponsiveness from the law society. “The [LSUC] bureaucracy and the benchers aren’t always on the same page,” he explains. “The bureaucracy had no say in my hiring.”

Then he got a call saying there was an outstanding client complaint against him. Singh says he had been told months earlier this complaint was going to be resolved. He says the complaint was frivolous and baseless and believed the law society was now using it to rescind his job offer. By then, Singh was in no emotional state to fight them on the matter. “I didn’t want a new conflict in my life,” he says.

It’s not uncommon for sole practitioners to receive client complaints, simply by the nature of whom they defend. “Big firms don’t take clients who are the alienated and the most abused members of society,” explains one Toronto sole practitioner. “So they don’t have irrational clients who, when you don’t win their case despite your best efforts, lash out at the lawyer. The sole practitioners, to some extent, are complained against more often because they are dealing with more vulnerable clients.”

Once the first complaint against Singh emerged, he says more came out of the woodwork — six in total. Singh says they were all frivolous and he could have easily defended his actions with every one of them, but his inability to deal with stressful situations prevented him from doing so and he chose not to fight. In 2007, the law society disbarred him, claiming he had inappropriately taken money from clients while failing to provide promised work (the amounts of money in question were small, ranging from $535 to $4,000). “Nobody from the law society said ‘Can we help you’, or ‘Tell us more’, or ‘Give us a doctor’s letter’,” says Singh. “You know, some sort of human response. There was nothing whatsoever.”

Today — after Singh’s story was put to them by Canadian Lawyer — the law society refused to discuss the affair, citing a non-disclosure agreement. Whatever the truth is, if Singh was brought low by the reality he was a sole practitioner and therefore an easy target to be disciplined, it would appear this is no anomaly. Law societies might be fickle in who they choose to discipline, but going after powerful lawyers from big firms is something they seem more loathe to do. And that is not always good news for the legal profession.

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