• D.M. (law student)

Let's Get Tough on Lawyers Who Break Bad - a Student's Perspective

While the topic of client fund misappropriations by lawyers is not entirely a novel situation, the criminal accusations against Canadian legal practitioners appears to be on the rise. Law is a noble profession, and lawyers ought to zealously defend a client’s interest, abide by the rules of their law society, all the while fulfilling their overriding duty towards the court. So how is it that lawyers who are disciplined, suspended, and even disbarred by their profession, manage to avoid criminal charges? A recent investigation by the Toronto Star provides some fascinating insight.

In the Burns case, Lawrence Burns, disbarred from the Law Society of Upper Canada (“LSUC”), was found guilty in 2011 for embezzling $500,000 from four different clients. He was found guilty for his miscount but did not face any criminal charges. He argued that “undiagnosed depression” and “minor cognitive impairment” were to blame for his misappropriation. Similarly, Luc Barrick, an Ontario lawyer disbarred in 2013 by the LSUC, misappropriated trust funds in the amount of $360,000 to fund his expensive “tastes.” A recent CBC report, claims that, in the last 6 years, out of 220 lawyers who were disciplined by their respective law societies across the country (for embezzling $160 million from clients) only 19 faced were charged criminally.

Law societies are self-regulating bodies governed by their rules of professional/ethical conduct. Lawyers, as officers of the court, owe a fiduciary duty—a duty that imposes a higher standard of care and obligates lawyers to advance the position of the beneficiaries honestly and in “good faith”—towards their clients and the court. The fiduciary duty towards a client is an absolute standard. Thus, any disciplinary actions against misappropriating client funds, is a serious breach of trust, that oftentimes leads to the ultimate penalty disbarment. The objective of society benchers when ruling in a misappropriation case is two-fold. First to restore the public confidence in the legal process and secondly, to rehabilitate lawyers.

Both lawyers, Burns and Barrick, were entrusted with managing client funds and they deliberately abused that trust. By utilizing funds for their own personal gains they breached fiduciary duties that they owed towards their clients. Further, they also violated professional codes of conduct and did not act in good faith. While disbarring Burns and Barrick will likely aid with their rehabilitation process, choosing not to pursue criminal charges will not.

White collar crimes punishable by law include misappropriations as noted above, yet very few lawyers who are disbarred for money embezzlement are also criminally charged. Tellingly, this does not restore the public confidence in the legal system but instead alludes to the existence of a two-tier system, one system that serves lawyers and another for the society at large. A potential policy that law societies could enact would be cooperating with law enforcement, reporting newly discovered issues to law enforcement and cooperating fully and completely with the pressing of criminal charges by law enforcement after disbarment has been instated.

Read more:

http://www.cbc.ca/news/canada/lawyers-misappropriated-millions-1.3981266

http://projects.thestar.com/broken-trust/