You Cannot Contract Your Way Out of a Law Society Complaint

The mandate of the Law Society of Upper Canada (the “Law Society”) is to govern and regulate the legal profession in the public interest.  The Law Society has a duty to protect the public interest, through ensuring the ethical conduct and honesty of its members in the legal profession.  Is it possible for a party in a private settlement to obtain a release from a pending or  future complaint that may be filed with the Law Society?

In Thompson Family Trust, the Trustees commenced an application to pass their accounts.  One of the Trustee’s is a member of the Law Society.  Notices of Objections were filed on behalf of each of the beneficiaries.  Following a pre-trial conference, Minutes of Settlement were entered into by the Trustees and the Beneficiaries, through their solicitors.  A term as part of the Settlement was that the beneficiaries would provide the Trustees with a Full and Final Release, including a release against all pending and possible future complaints filed with the Law Society of Upper Canada, with respect to the administration of the Family Trust.

Prior to entering into the Settlement, one of the beneficiaries filed a complaint with the Law Society concerning what she believes to be serious mismanagement of the Family Trust, by the Trustee who is a member of the Law Society.

Despite the Settlement, Counsel for the beneficiary argued that the above-referenced provision could not be enforced against the Law Society, as the Law Society was not a party to the agreement and could not be bound by its terms. More importantly, Counsel says that linking the receipt of any benefit in a settlement to the withdrawal of a regulatory or disciplinary complaint is both improper and unethical.

Counsel for the Law Society Member/Trustee, says the agreement made between the parties is valid and enforceable. The withdrawal of the complaint was one of the factors which the member/trustee took into account when agreeing to the settlement. As consideration for the withdrawal, the member/trustee agreed to a reduction in his claim for compensation and agreed to be responsible for certain legal fees.

In arriving at his decision, the Honourable Justice Lederer, considered the doctrine of public policy, which holds:.

The doctrine of public policy is concerned with the fundamentals of the legal system. What offends against public policy are acts which support, encourage, permit and foster conduct which is injurious to the very foundation upon which society exists. To recognize and enforce contracts that do this would be to offend the public conscience.

Lederer, J. held that it is improper for a person, subject to regulation, to require that a complaint about his or her conduct be released or withdrawn in exchange for payment or a benefit, as part of a private settlement in a related civil matter.  Lederer, J. stated: “the complaint raises issues of public importance that extends beyond the private interests of the parties to the settlement. It raises issues of public policy and implicates the duty of the Law Society to protect the public interest. It is incumbent on us to ensure that members of the public can trust the work of the lawyers they retain and be sure that those who step outside the rules and ethical principles will be properly disciplined.”  Lederer, J. held that the above-referenced provision is unenforceable.

Thank you for reading,

Rick Bickhram