Court of Appeal rejects DioGuardi’s challenge of Law Society Act

Court of Appeal rejects DioGuardi’s challenge of Law Society Act

Tax lawyer Philippe DioGuardi’s professional misconduct hearing may have ended last year with a six-week suspension  and a $5,000 fine, but the lawyer remains in a legal wrangling with the Law Society of Upper Canada over the regulator’s handling of confidential client information.

Yesterday, the Ontario Court of Appeal rejected DioGuardi’s constitutional challenge of the Law Society Act. DioGuardi and his father Paul, who is also his law partner, had argued the act leaves highly sensitive client information vulnerable to public disclosure during law society investigations.

Last year, in the midst of an investigation into their practices, the DioGuardi lawyers went to the Superior Court to get an order protecting confidential information belonging to clients who have lodged complaints against them. The lawyers, who act for clients dealing with the Canada Revenue Agency, were concerned that if client information becomes public (and known to the CRA) through the law society proceedings, some of those clients may face criminal prosecution.

The DioGuardi lawyers also argued that the law society should obtain a written waiver of solicitor-client privilege from complainants, perhaps in the form of a notice on the complaint form that complainants’ information may become public.

But the lower court had declined to intervene, adding it would not get involved in administrative proceedings “absent exceptional circumstances.” And yesterday, the court of appeal agreed. “Our conclusion on this issue is simple: we agree with the application judge’s conclusion and with his reasons in support of the conclusion,” said James MacPherson, who wrote on behalf of the three-judge panel.

Philippe DioGuardi, who was convicted of taking payment before doing little or no legal work and failing to serve clients to “the standard of a competent lawyer,” told Legal Feeds his challenge at the court of appeal was not about his case.

“It’s about protecting the public. Who cares about me?” he says.

DioGuardi says the issue is that the law society has the double duty of protecting the public and protecting complainants’ privileged information. “There are times when these two duties are in conflict and that’s when you have a problem,” he says.

Although the regulator has processes in place to protect confidential information, “the law society is not perfect,” DioGuardi also says, adding complainants should know there’s a chance their information might end up in the hands of the public or the CRA during the law society’s investigative process.

Part of the DioGuardis’ argument was that the legislative scheme in the Law Society Act related to the Law Society of Upper Canada’s investigation powers violates the Charter ss. 7 and 8 rights of the complainant clients.

In its brief written decision, the court of appeal quoted Superior Court Justice Edward Belobaba, who said the application was premature and the issue should first be decided at the law society.

“In short, there is every good reason to allow the administrative process in this case to run its course,” Belobaba said. “The Law Society Tribunal should be allowed to decide at first instance whether the constitutional arguments advanced herein are well-founded and, in particular, whether there is any room in the legislative design and policy of the act for the specific client-focused protections being sought by the applicants.”

But DioGuardi says client information is at its most vulnerable in the timeframe between when a complaint is made to the law society and a formal hearing starts before a tribunal. If and when law society investigators request documents from the CRA in relation to a complaint, DioGuardi says they may well raise eyebrows at the agency, which may then reexamine the clients associated with the lawyer being investigated.

At that point, “there’s no tribunal yet; it’s just an investigation,” DioGuardi says. “How’s the tribunal going to fix the genie once it’s out of the bottle?”


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