Professional Regulation

2016 has been a year of transition in the Professional Regulation Division (”PRD”), highlighted by an extensive review of the PRD at the direction of the CEO and the recruitment of a new Executive Director for the PRD. As a result of both of these events, the PRD commenced a restructuring process in 2016, which includes both structural and process changes designed to increase efficiencies and the effectiveness of the regulatory process. The key changes can be summarized as:

  • more robust, early triage and resolution carried out by a larger Intake & Resolution department
  • merger of the Complaints Resolution and Investigations departments
  • creation of new multi-functional Enforcement teams with different types of Investigators and Discipline Counsel working together in teams
  • creation of a Technology & Evidence Control department to enhance the PRD’s ability to receive, produce, manage and control electronic data

The new organizational structure came into effect in February 2017, but throughout 2016, steps were taken to streamline processes and increase efficiencies to permit us to more effectively regulate. These changes have already made an impact.

  • The PRD initiated a record number of Notices of Application, motions for interlocutory suspension or restriction of a licensee’s professional business and undertakings from licensees.
  • The Intake department closed approximately 11% more complaints and transferred 24% fewer complaints than in 2015.
  • With the assistance provided by Intake, investigating staff have been able to focus on reducing caseloads and the number of complaints closed through diversion or other staff action also increased from 2015.

Complaints Received

2016 marked the first increase in the number of new complaints received in PRD since 2013. The number of new complaints received in 2016 was 4.0% higher than the number received in 2015 and 1.1% higher than the number received in 2014.

In 2016, our Complaints Services department received 6,313 new complaints and re-opened 74, for a total of 6,387 complaints.

Professional Regulations Complaints Received

View Data

Of those, 4,833 complaints were referred to our Professional Regulation Division as follows:

Subjects of the complaints 80% of the complaints were against lawyers
12% of the complaints were against paralegals
The remaining complaints/cases involved non-licensees and lawyer and paralegal applicants.
Complainants: 69% of the complaints were brought by members of the public;
13% of the complaints were brought by licensees; and
18% of the complaints were internally raised (i.e. the complainant is the Law Society).

These proportions are consistent with past years.

The nature of complaints received in the Professional Regulation Division in 2016 was similar to the nature of complaints received in the past few years:

Types of Allegations Raised in Complaints Received

Issue type % of complaints received
Type: Service Issues
(examples: fail to account, fail to communicate, fail to serve client )
Complaints: 50%
Type: Integrity Issues (examples: civility, couseling/behaving dishonourably) Complaints: 46%
Type: Governance Issues (examples: fail to cooperate with Law Society, Unauthorized Practice) Complaints: 17%
Type: Financial Issues (examples: mishandling trust accounts, misappropriation, real estate/mortgage schemes Complaints: 11%
Type: Special Applications (examples: capacity, good character) Complaints: 8%
Type: Conflicts (examples: licensee in position of conflict, business/financial relations with client) Complaints: 7%

Figures total more than 100% because some complaints raise more than one issue.

All of the proportions are similar to those in previous years with the exception of financial issues. There has been a significant increase in the proportion of new complaints alleging financial issues from 2014 (40%) to 2016 (46%).

Types of Allegations Raised in Complaints Received, by % of complaints received with issue type, by Year

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Civil litigation, real estate and matrimonial / family law continue to be the 3 areas of law receiving the most complaints.

Area of Law identified in the complaints received

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  • For complaints against lawyer and against paralegal licensees, sole practitioners continue to receive a significantly higher number and proportion of complaints while licensees practising in larger firms1 continue to receive a significantly fewer number and proportion of complaints.
  • Lawyers in practise for five years or less continue to receive significantly fewer complaints.

One significant departure from previous years relates to lawyers who have been in private practice for more than 30 years. In previous years, it was noted that this group received significantly more complaints than would be expected. In 2016, no significant difference was noted.

1 Lawyers practising in firms with more than 26 licensees; paralegals practicing in firms with more than 6 licensees.

Investigations

A major component of the reorganization of the PRD is more robust, early triage and resolution carried out by a larger Intake & Resolution department. In 2016, the Intake department began working towards this goal, reducing the number of complaints transferred to the investigating departments and closing more complaints than in 2015. Intake staff only obtained instructions on and transferred cases to the investigative departments which they assessed as high risk, serious allegations of misconduct. As a result, in 2016:

  • 24% fewer complaints were transferred for investigation than were transferred in 2015
  • 11% more complaints were closed than were closed in 2015
  • This provided much needed assistance to investigative staff, allowing them to address their current, aging investigations.
443

Intake’s Inventory at beginning of 2016

+
5,001

New in 2016 + reopened

-
2,243

Complaints closed in intake*

-
2,152

Transferred out of intake

=
1,049

Intake’s Inventory at end of 2016

*How were the complaints closed?

236

closed – resolved

577

closed – no further regulatory action

1,430

closed – no jurisdition, no response, withdrawn, previously decided or concurrent litigation

In 2016, 2,018 complaints were instructed for investigation2, including:

  • 1,823 instructions for a conduct investigation;
  • 33 instructions for a capacity investigation;
  • 101 instructions for an investigation into unauthorized practice; and
  • 61 instructions for a good character investigation

2Not all cases / complaints require formal instructions to initiate an investigation (e.g. where a licensee is seeking reinstatement; where a summary hearing or interlocutory suspension motion is being sought). Hence the number of instructions to investigate will be less than the number of cases transferred out of the Intake department.

In 2016, investigating staff reduced the inventory of investigations by 17%, from 2,493 complaints at the beginning of the year to 2,064 complaints at year end. This reduction was the result of:

  • the reduced number of new complaints transferred from the Intake department, as discussed above, and
  • the increase in investigations closed in 2016 (2,334) as compared to 2015 (2,204).

Below is the breakdown of reasons that complaints that were completed in 2016 following an investigation. There was no appreciable difference in the reason for the completion of investigations in the past 3 years.

Reasons Complaints Were Completed in 2016, Following an Investigation

* Regulatory Meeting, Invitation to Attend, Letter of Advice, practice / spot audit recommendation, undertaking
** Includes discontinued complaints and complaints outside the jurisdiction of the Law Society

View Data

The number of new Mortgage Fraud and Unauthorized Practice (UAP) investigations continued to decrease in 2016.

New Mortgage Fraud and Unauthorized Practice (UAP) investigations

New investigations in 2016 Completed investigations in 2016 Inventory at the end of 2016
Mortgage Fraud 29 investigations involving 50 complaints
(an average of 2.4 per month)
61 investigations involving 84 complaints 34 investigations involving 57 complaints
(down from 66 investigations involving 91 complaints at the beginning of 2016)
UAP 101 complaints
(a 35% decrease from 2014 (155) and a 33% decrease from 2015 (150)
106 complaints 99 complaints
(a decrease of 12% from the inventory at the beginning of 2016)

Complaints Resolution Commissioner

When the Law Society closes a case after an investigation, the complainant may request a review of that decision by the Complaints Resolution Commissioner.

  • In the past few years, the number of requests for a review by the Commissioner has declined. The 192 requests received in 2016 was 7% fewer than the number of requests received in 2015 (207) and 20% fewer than the number received in 2014 (240).
  • Of significance to the PRD is:
    • the noted decrease in requests received per closed investigations. The percent of cases closed in the PRD which were eligible for a review by the Commissioner for which a review was requested has also declined in the past three years, from 9.6% in 2014 to 9.4% in 2015 to 8.2% in 2016.
    • Of the 143 decisions rendered following a review by the Commissioner in 2016, only nine files (6%) were referred back to the PRD for further investigation and of those nine, the Commissioner was not satisfied that the decision to close was reasonable in seven files. (The other two files were referred back for further investigation on the basis of submissions made/evidence provided by the Complainant at the review meeting.) With respect to these seven files, the Executive Director of the PRD adopted the Commissioner’s recommendation in five cases; and declined to adopt the Commissioner’s recommendation in two cases.

Discipline

In 2016, 445 complaints / cases involving 168 licensees / applicants were transferred into the Discipline department for prosecution. The number of licensee/applicant matters transferred into the Discipline department in 2016 is higher than in any of the previous 5 years and is approximately 8.3% higher than the number received in 20153.

The inventory of matters before the Law Society Tribunal - Hearing Division has steadily increased in the last 3 years. At the end of 2016, Discipline Counsel / Paralegals had an inventory of:

  • 60 matters in the pre-hearing phase (i.e., pending authorization to proceed to a hearing in the Hearing Division).
  • 129 matters before the Hearing Division, an increase of about 18% over the number of matters before the Hearing Division at the end of 2014 (109).
  • 25 matters before the Law Society Tribunal – Appeal Division or the Courts.

3 Note that the large increase in the number of cases/complaints transferred into the department in 2016 is explained by the receipt of 1 lawyer matter involving just over 100 complaints.

Law Society Tribunal: Inventory of Matters, by Year

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A record number of Notices were issued by the Discipline department in 2016:

Notices Issued by the Discipline department in 2016:

View Data

The following chart sets out the types of allegations raised in the Notices issued in 2016:

Types of allegations raised in the Notices issued in 2016:

Figures total more than 100% because some complaints/cases raise more than one issue.

View Data

While the number of motions for interlocutory suspension / restriction orders has steadily increased in the past five years, the number significantly increased in 2016.

Motions for interlocutory suspension / restriction orders

Interlocutory Suspension/Restriction Motions in 2016 (Authorized by PAC)
Authorized By the Proceedings Authorization Committee Total: 25 2 Seeking Restrictions
23 Seeking Suspensions
Issued Total: 25 2 Seeking Restrictions
23 Seeking Suspensions
Completed Total: 28 6 Restrictions granted
18 Suspension granted
1 Motions dismissed
3 Motions Withdrawn/Abandoned

In 2016, final orders were rendered by the Hearing Division in 152 matters. The dispositions in these 152 completed matters are set out in the chart below:

Final orders rendered by the Hearing Division, by year

Matters Disposed of by the Hearing Division Lawyers Paralegals
2014 2015 2016 2014 2015 2016
Conduct Total 101* 77 94 23 21 18
Reprimand 15 16 18 2 0 2
Suspension 51 30 39 13 16 10
Permission to surrender 7 8 9 3 1 0
Revocation 18 14 9 2 2 6
Fine 0 0 0 1 0 0
No penalty imposed 1 0 0 0 0 0
Costs only 0 0 1 0 0 0
Dismissed / stayed 4 4 5 0 2 0
Withdrawn /abandoned 4 5 13 2 0 0
Interlocutory suspension / restriction 11 7 27 3 3 1
Capacity 3 5 1 0 0 1
Non-compliance 1* 1 0 0 0 0
Reinstatement/Terms Dispute 3 2 4 1 1 0
Licensing (including readmission) 2 4 1 4 7 5
TOTALS 120 96 127 31 32 25
2014 151
2015 128
2016 152

*There was one hearing in which a conduct application and a non-compliance application were heard together. Both are included in the totals for lawyer conduct and lawyer non-compliance categories. However, the matter is only counted once in the total numbers and the suspension is reflected in the conduct statistics.

Since 2001, the Law Society has completed 123 mortgage fraud prosecutions. The following chart displays the outcomes of mortgage fraud prosecutions in 2016 and since 2001:

Outcomes of mortgage fraud prosecutions in 2016 and since 2001

Outcome Results for Completions in 2016 Results since 2001
Lawyer’s licence revoked (disbarred) 2 45
Lawyer permitted to surrender licence 2 20
Lawyer suspended 2 56
Other lesser penalty (e.g. reprimand, fine) 0 2
Totals 6 123

With respect to appeals and applications for judicial reviews with Discipline Counsel / Paralegals in 2016:

Appeals and applications for judicial reviews with Discipline Counsel / Paralegals in 2016:

Law Society Tribunal – Appeal Division Divisional Court Court of Appeal for Ontario Supreme Court of Canada
Matters commenced 12 appeals 4 appeals; 4 judicial reviews 5 motions for leave to appeal; 1 appeal 3 motions for leave to appeal
Matters completed 13 appeals 11 appeals; 2 judicial reviews 5 motions for leave to appeal; 2 motions for reviews of leave to appeal motions; 2 appeals 1 motion for leave to appeal
Matters active as at December 31, 2016 15 appeals 5 appeals; 2 judicial reviews 1 application for leave to appeal; 1 appeal 2 motions for leave to appeal

Other Regulatory Activity in 2016

The Monitoring & Enforcement Department (renamed the Regulatory Compliance Department) is responsible for enforcement of orders from the Law Society Tribunals and the Courts as well as undertakings provided by licensees to the Law Society. Department activities include monitoring undertakings obtained at the completion of matters by other departments within the Division, ensuring that bankrupt lawyers comply with the Law Society’s by-laws; enforcing judgments and mortgages obtained by or assigned to the Compensation Fund and responding to regulatory inquiries from the public.

Monitoring & Enforcement 2014 2015 2016
Costs Collected (including Discipline costs) $324,104 $572,703 $447,945
New Undertakings to be monitored 58 63 91
New Orders to be monitored 179 152 157
Regulatory inquiries received and addressed
(number of licensees involved in inquiries)
5,379
(5,982 licensees)
5,079
(5,548 licensees)
4,726
(5,398 licensees)

The Trustee Services Department responds in situations where a licensee has abandoned his/her practice or has had his/her licence revoked or suspended, as well as situations where a sole practitioner has suffered serious health problems and is unable to continue in the practice of law. Through the use of the Law Society's trusteeship powers, staff carry out the Law Society's mandate to protect the public interest by taking possession of the practice, if necessary, thereby ensuring that client property and interests are protected and that ongoing client matters receive the necessary attention. The department also provides information and assistance to licensees and their personal representatives who are closing their practices. A significant part of the work of Trustee Services staff is responding to specific client-related requests such as the return of a file or responding to information concerning a professional business in trusteeship.

Trustee Services 2014 2015 2016
Trusteeship Orders Obtained from Court 21 23 16
Information Services (including Agreements & Directors) 36 40 51
Client files retrieved from licensee’s professional business, indexed & preserved 17,559 21,205 17,051
Client Requests Completed (including trust distribution) 2,396 2,126 1,446

For more than 50 years, the Compensation Fund has compensated members of the public who have suffered a financial loss through the dishonesty of a lawyer or paralegal. Clients can apply to the Fund for reimbursement of lost money or property.

Pursuant to the Guidelines for Compensation Fund Claims, the Fund can be used to reimburse individuals up to maximum amounts specified in the guidelines. In 2016, the maximum amount allowed for losses involving lawyers was increased to $500,000.00. For losses involving paralegals, the maximum is $10,000.

Compensation Fund 2014 2015 2016
Claims Received: against lawyers
against paralegals
223 claims
26 claims
176 claims
22 claims
154 claims
16 claims
Claims Granted: against lawyers
against paralegals
69 claims
15 claims
109 claims
11 claims
99 claims
18 claims