Publication: Benchers Bulletin, April-May 2005 · Practice Tips: Fighting back against fraud — the risks in real estate: page 15 Remember your professional development in 2005:

Benchers’Bulletin

A publication of the Law Society of British Columbia

2005: No. 2 April-May

President’s View: Lawyer independence in the balance:page 2

NewsTim McGee appointed CEO of Law Society: page 4

Rules require lawyers to guard against fraud: page 4

A resource centre for unrepresented litigants: page 6

Practice experience requirements eased for principals:page 7

Task Force recommends expanded role for law firmparalegals: page 8

Compensation claims will be decided first under trustprotection coverage: page 10

Lay Benchers offered per diem: page 11

Equality initiatives elsewhere may hold promise for BCwomen lawyers: page 12

LLPs can include law corporations and non-lawyerpartners from other provinces: page 14

Practice & EthicsPractice Tips: Fighting back against fraud — the risksin real estate: page 15

Remember your professional development in 2005:page 19

PLTC material now online: page 20

RegulatoryUnauthorized practice actions: page 21

Special Compensation Fund claims: page 21

Inside

Benchers’ Bulletin April-May, 20052

President’s View

Benchers’ Bulletin

The Benchers’ Bulletin and related news-letters are published by the Law Soci-ety of British Columbia to update BClawyers and articled students on policyand regulatory decisions of the Bench-ers, on committee and task force workand on Law Society programs and ac-tivities.

The views of the profession on im-provements to the Bulletin are alwayswelcome — please contact the editor.

Additional subscriptions to Law Societynewsletters may be ordered at a costof $50.00 (plus GST) per year bycontacting the subscriptions assistant.To review current and archived issuesof the Bulletin online, please see“Publications & Forms / Newsletters” atwww.lawsociety.bc.ca.

EditorDenise [email protected]. 604 443-5706

Editorial AssistantDenise [email protected]. 604 443-5788

SubscriptionsDonna [email protected]. 604 443-5768

© 2005 The Law Society of BritishColumbiaPublications Mail Agreement No.40062742

Lawyer independence in the balanceby Ralston S. Alexander, QC

There has been much talk in recentmonths among lawyers about the in-dependence of the Bar — a topic thatshould be of interest to all lawyers inBC. A number of events have com-bined to raise the profile of this impor-tant issue both at home and abroad:

� In Canada … Four years ago, thefederal government decided, with-out consultation, to conscript thelegal profession in Canada into es-pionage under new anti-moneylaundering and terrorist financinglegislation. This was to fulfil itsquest for information on the finan-cial transactions of all our clients.As lawyers, we were expected toundertake this task without our cli-ents’ consent and, perhaps worse,without their knowledge. Acrossthe country, law societies said“no.” Starting in BC, we obtainedinterim injunctions from the courtsto exempt lawyers from this legis-lation on the basis it amounted toan unconstitutional violation of so-licitor-client privilege. Althoughthe first battle was won, it is tooearly to declare victory, as I notefurther on.

� In the UK … In December, 2004,Sir David Clementi (a CA andMBA - Harvard, career banker andlater Deputy Governor of the Bankof England) reported out on the re-sults of his two-year consultationand study into the regulation oflaw-related service providers inGreat Britain. His report paints atroubled landscape in the UK. Heflagged numerous bodies regulat-ing the legal profession, conflictingresponsibilities, lack of coordina-tion and cooperation and a demon-strated reluctance to respond toclearly articulated demands fromlegislators for reform. He has rec-ommended splitting the represen-tative (lawyer advocacy) functions

from the regulatory functions inthe profession and creating a newLegal Services Board, whichwould become responsible foroverseeing regulation and wouldbe accountable to government.

� In other Commonwealth jurisdic-tions … Following public contro-versies over law societycomplaints handling, the govern-ments of two other Common-wealth jurisdictions (Queenslandand New South Wales) decidedthat the self-governing privilegesof the profession had been abusedand should be revoked. They have

effectively removed the com-plaints and discipline responsibili-ties from the law societies andtransferred them to other bodies.

All these circumstances have alertedthe Benchers to the dangers of compla-cency in the discharge of our regula-tory obligations. Never before has thelegal profession been under such in-tense public and government scrutiny.Although we may not be facing thesame criticisms as in other countries,we need to maintain a high standard ofregulation and be vigilant about pro-tecting an independent bar in thiscountry. The consequences of failingto do so are serious.

Canadians today have privacy andsecurity over their legal matters andthey trust that lawyers will keep their

The question needs to beasked. How far can

government intrude intothe profession beforeindependence is lost?

Benchers’ Bulletin April-May, 2005 3

confidences. They also trust their law-yers to represent them fully, withoutimproper influences or pressures com-ing to bear, even if they may be upagainst a branch of government. Butwithout lawyers who are independentof the state, such confidence would nolonger be justified. And without an in-dependent law society, there are no in-dependent lawyers. So the questionneeds to be asked. How far can gov-ernment intrude into the professionbefore that independence is lost?

Our Benchers recently promoted asubcommittee on independence of thebar, under the able leadership ofBencher Gordon Turriff, QC, to fullcommittee status. Mr. Turriff has gath-ered a group of intelligent and articu-late members from our legalcommunity to study the changingworld of lawyer independence. I knowthey will bring new insights and lead-ership to the table on this issue.

I am proud that it was our law societythat spearheaded the 2001 constitu-tional challenge to the money launder-ing legislation. This battle has beencarried on by BC on behalf of all Cana-dian lawyers in consultation with theFederation of Law Societies of Canada.Our court action was an appropriateresponse to the federal government’ssuggestion that we become spiesagainst our own clients.

The public interest, the primary moti-vation of everything that we do as alaw society, must suggest that the re-porting provisions of the money laun-dering and terrorist f inancinglegislation is unacceptably intrusivewhen it comes to solicitor-client privi-lege and confidentiality. Yet the gov-ernment has not abandoned itsapproach to the legislation, insistingthat the evils of illegal internationalcurrency movement justify theintrusion.

There are, in fact, other ways to tacklethe threat of money laundering. In2004, the Benchers passed a rule thathas become a model for most of the

law societies in Canada. Known as the“no-cash rule,” it prohibits membersof the law society from receiving forany purpose, other than retainers orbail, cash in excess of $10,000. This re-striction can be monitored by the LawSociety directly through its regulatorycontrol of lawyers. In this way, we aredemonstrating to the federal govern-ment and the public that the legalprofession in Canada will not be aninadvertent participant in the moneylaundering game. [For more on thisrule, see page 5.]

The federal government is now askingthat we reduce the “cap” on cash re-ceipts from $10,000 to $7,500 (a matterfor consideration by the Benchers

sometime soon). So far, the govern-ment has not yet acknowledged thatour no-cash rule will alleviate the needfor the very intrusive reporting re-quirements of the money launderinglegislation.

It will be up to the legal profession toremain vigilant about independenceissues and to find responsible solu-tions to problems without discardingsolicitor-client privilege or other fun-damental underpinnings of our justicesystem.

The Federation of Law Societies is con-tinuing discussions with the federalgovernment to resolve these issuesand come to a long-term solution. Werecently agreed that the trial on money

laundering, which had been sched-uled to begin this fall, will be ad-journed to a later date so that the lawsocieties and the federal governmentcan explore settlement options.

To ensure that Canadian lawyers donot become the next target for aClementi-like report, l think all law so-cieties must carefully avoid any defi-ciencies in their regulatory processesthat could draw criticism or interfer-ence. Thankfully, there are importantdifferences between the profession inCanada and abroad. In BC, for exam-ple, we recognized years ago that themandate of the Law Society in regulat-ing the profession was very differentfrom that of the CBA in representingand advocating for lawyers — and wesupport that separation of roles.

A major concern addressed by Sir Da-vid is that the profession in Great Brit-ain was responsible for long delaysand private processes in responding tomisconduct complaints. By contrast,we in Canada, and BC in particular,have become much more transparentand aggressive in our response to com-plaints of misconduct. Response timesoverall are appropriate, disciplinehearings are open and full hearing re-ports are published promptly on ourwebsite.

This need for vigilance is not an obli-gation that is limited to the electedleaders of the profession. In the workthat lawyers do, we must continue toprovide competent, timely and cost-effective service to our clients. Wemust do our work in a manner that inall things is consistent with the funda-mental public need for independentlawyers.

By maintaining our vigilance and per-spective on the overarching impor-tance of the independence of lawyers,we will protect that independence intothe future. This is a task of immensesignificance, and we must, as mem-bers of this profession, do everythingwe can to ensure that it is accom-plished.�

Editorial

It will be up to the legalprofession to remain vigilant

about independence issuesand to find responsiblesolutions to problems

without discarding solicitor-client privilege or other

fundamental underpinningsof our justice system.


News

Tim McGee appointed CEO of Law SocietyTim McGee hasbeen appointedChief ExecutiveOfficer and Exec-utive Director ofthe Society effec-tive June 1, 2005.

Mr. McGee wascalled to the Ontario Bar in 1987 andbegan his legal career with the To-ronto law firm now known as TorysLLP. Most recently, he was Presi-dent of Bell ExpressVu, Canada’slargest provider of digital televi-sion. Prior to joining BellExpressVu, he was Chief Legal Offi-cer of Bell Canada and wasVice-President, General Counsel

and Corporate Secretary of AT&TCanada Inc.

Born and raised in Victoria, Mr.McGee was educated at HarvardUniversity and the University of Ot-tawa Law School. He served twoyears as Executive Assistant to BC’sAttorney General and has competedinternationally for Harvard Univer-sity in rowing. Mr. McGee is a mem-ber of the Canadian Bar Associationand the Bishop’s College SchoolFoundation Board.

“Mr. McGee’s experience as a law-yer, as a business executive in a reg-ulated industry and with corporategovernance make him ideally suited

to managing the Law Society’s regu-latory and public interest roles,” So-ciety President Ralston Alexander,QC said. “I would like to thank theselection committee, chaired by LawSociety Past-President WilliamEverett QC, for recommending Mr.McGee for this important position.”

“I want to bring strong leadership,solid regulation and a strategic vi-sion to the Law Society and the legalprofession,” Mr. McGee stated. “Ilook forward to discharging this im-portant mandate and to ensuringthat the public is well served by a le-gal profession that is honourable,competent and independent.”�

Rules require lawyers to guard against fraudThe Benchers have amended Chapter4, Rule 6 of the Professional ConductHandbook to reinforce a lawyer’s dutyto be on guard against becoming thetool or dupe of an unscrupulous client.

In recent years, the Law Society haslearned of dishonest investment pro-moters who have asked to depositfunds in lawyers’ trust accounts. Thefunds typically come from investorswho have been promised spectacularprofits. Perpetrators of these scamsuse a lawyer’s trust account and insur-ance coverage to add credibility to afraudulent enterprise.

Although lawyers have always beenunder an ethical obligation to refrainfrom dishonest or fraudulent activi-ties, the amendments to Chapter 4 ofthe Handbook expressly highlight alawyer’s duty to refrain from any ac-tivity the lawyer “knows or ought toknow” assists a fraudulent enterprise.In addition, a new footnote to Rule 6explicitly warns a lawyer to be wary of

clients who promise third parties un-realistic returns on investments placedin trust with the lawyer. The Law Soci-ety also urges lawyers to be wary ofunfamiliar clients or investors who askthem to make representations aboutprotection for potential claimants un-der the lawyer’s insurance coverage.

Amended provisions of ProfessionalConduct Handbook:

Dishonesty, crime or fraud

6. A lawyer must not engage in anyactivity that the lawyer knows orought to know assists in or encour-ages any dishonesty, crime or fraud,including a fraudulent conveyance,preference or settlement.3

Footnote:

3. A lawyer has a duty to be onguard against becoming the tool ordupe of an unscrupulous client or ofpersons associated with such a cli-ent and, in some circumstances,

may have a duty to make inquiries.For example, a lawyer should bewary of a client who:

(a) seeks the use of the lawyer’strust account without requiringany substantial legal servicesfrom the lawyer in connectionwith the trust matters, or

(b) promises unrealistic returns ontheir investment to third partieswho have placed money in trustwith the lawyer or have been in-vited to do so.�

Learn more about fraud targetingCanadian lawyers in real estatepractice in this issue’s Practice Tipson page 15. For an overall survey ofcommon schemes and scams, see“When scamsters target lawyers” inthe May-June, 2003 Benchers’ Bul-letin.


News

Reminder of anti-money-laundering rules

Lawyers restricted from accepting $10,000 or more in cashUnder Law Society Rule 3-51.1, whichtook effect May 7, 2004, BC lawyers areprohibited from accepting $10,000 ormore in cash, other than:

� from a law enforcement agency;

� pursuant to a court order;

� in the lawyer’s capacity as execu-tor of a will or administrator of anestate; or

� as professional fees, disburse-ments, expenses or bail.

Lawyers are reminded that the ruledefines a cash transaction as the re-ceipt of $10,000 or more in cash in asingle transaction or the receipt of twoor more cash amounts in a 24-hour pe-riod that total $10,000 or more. Clientswho wish to deposit $10,000 or morewith a lawyer must convert the cashinto negotiable instruments through afinancial institution before depositingthe money with a lawyer.

This limitation on cash transactions isthe first of its kind in Canada.Following the lead of BC, however,law societies in Alberta,Saskatchewan, Ontario, Newfound-land and Labrador and the Northwest

Territories have since passed similarrules, helping to ensure that Canadianlawyers are at the forefront of the fightagainst money laundering. Theremaining law societies, along withQuebec’s Chambre des Notaires, areexpected to pass their own anti-money-laundering rules soon.

While the rules (and proposed rules)differ from province to province incertain details, they all prohibitlawyers from accepting cash over aprescribed amount from clients,except in certain permitted circum-stances.

Rule 3-51.1 is part of the legal profes-sion’s response to the fight againstmoney laundering in Canada.

While the Proceeds of Crime (MoneyLaundering) and Terrorist Financing Actrequire professionals who accept$10,000 or more in cash to report thetransaction to the Financial Transac-tions and Reports Analysis Centre(FINTRAC), lawyers are currentlyexempt from PC(ML)TFA reportingrequirements.

In 2001 BC and the Federation of LawSocieties argued that PC(ML)TFAviolated the constitution because it

required lawyers to report privilegedclient matters to the government,contrary to the concept of an inde-pendent legal profession, and the BCSupreme Court ordered that lawyersbe exempt from the reporting require-ments of this legislation until theconstitutional issue could be heard.The BC Court of Appeal upheld thedecision, and the superior courts inseveral other provinces granted simi-lar injunctions.

The federal government later agreedto be bound by the exemption in allCanadian jurisdictions until the courtcase is concluded.

The Law Society of BC, along with theother Canadian law societies, take thecommitment to combat moneylaundering seriously. For that reason,the Society urges lawyers tofamiliarize themselves with Rule3–51.1 and ensure they are in compli-ance. While very few lawyers wouldknowingly launder money on behalfof criminal or terrorist organizations,all lawyers should guard againstmoney laundering or against servingas a dupe to facilitate fraudulentschemes.�

Rule amendment

Discipline panels can hold penalty hearing after oral verdictLaw Society Rule 4-35 has beenamended to allow a discipline hearingpanel, if it has given oral reasons on itsfindings of fact and verdict, to proceedto the penalty stage of the hearingwithout first having to prepare writtenreasons.

Rule 4-35 previously required a panelto make a written report on facts andverdict under Rule 4-34(2) before itcould consider penalty, even if it hadalready given an oral decision. Thisprovision caused unnecessary delaysin some hearings.

The text of Rule 4-35, as revised, is in-cluded in the Member’s Manual amend-ment package in this mailing andavailable in the Publications & Formssection of the Law Society website atwww.lawsociety.bc.ca.�


News

Supreme Court offers help for unrepresented litigantsApril 18 saw the debut of the SupremeCourt’s new self-help centre at theVancouver Law Courts. The first of itskind in BC, the centre offers resourcesto the growing number of litigantsnow going it alone in civil cases.

Tucked into the Provincial Court sideof the law courts complex, the centre iseasily accessible from the SmitheStreet entrance on the north side.Visitors can expect a welcome fromone of the centre coordinators, RichardRondeau and Laurel Holonko, andwill find a comfortable spot to sit andread brochures, booklets and manu-als, fill out court documents, researchonline or watch a video to learn moreabout the court system and proce-dures.

The centre is set to offer services overthe next year as a pilot project sup-ported by the BC Court of Appeal, BCSupreme Court, the provincial andfederal governments and a broadrange of organizations in the legalcommunity — the BC CourthouseLibrary Society, the Canadian Forumon Civil Justice, Community LegalAssistance Society, Legal Services So-ciety, Law Courts Education Society,People’s Law School and Pro BonoLaw of BC.

The Law Society, through the Accessto Justice Committee, is following theproject closely.

The problems ofself-representation

As more people choose to handle theirown cases, or feel financially com-pelled to do so, the centre may be anidea whose time has come.

Colin Richardson, Area Manager forthe Vancouver Law Courts, and JohnSimpson, Manager of Community Ser-vices for the Legal Services Society arekeen supporters, as well as co-chairs ofthe Centre Services Committee thathas facilitated collaboration across thejustice system.

Not surprisingly, they see the biggestproblem faced by lay litigants who areon their own in court is that they aresimply not trained for the task.

“A number of concerns exist about theunrepresented litigant’s ability to ac-cess justice in an environment that as-sumes an organized process among

professional lawyers,” Colin Richard-son says. “The key is whether theunrepresented litigant will be able toaccess justice. Reading, understand-ing and arguing the law, and knowinghow to behave in court and follow Su-preme Court procedures, can be enor-mously difficult for those who are

Laurel Holonko, Colin Richardson (front) and John Simpson celebrate the launch of the newself-help centre at the Vancouver Law Courts, which opened its doors April 18.


News

unrepresented.”

Richardson and Simpson point to acommon perception that unrepre-sented litigants may use more courttime and resources because they maynot be adequately prepared or knowwhich documents are required, orthey may not fill out the documentscorrectly. They may also fail to under-stand the roles of the various people inthe courtroom or how to conductthemselves.

These problems can affect judges,counsel on the other side and counseland parties in other cases. Thornyquestions arise: Will the court’s neutral-ity be called into question if the judgeprompts the unrepresented litigant to aska question that he or she has failed to ask?To what extent is it appropriate for counselon the other side to assist the unrepre-sented litigant?

What the self-help centre canoffer

The self-help centre is one step in help-ing unrepresented litigants in civil ac-tions, by offering them basic legalinformation, education and referralservices.

The overarching goal is to increaseaccess to justice for unrepresented

people and efficiencies for the justicesystem — fewer delays, lower costsand fewer challenges for the court andfor other litigants who are representedby lawyers.

As centre coordinators, Richard Ron-deau and Laurel Holonko are avail-able to provide information andassistance, though not legal advice, oncivil and family matters. They can helpdirect people to appropriate resources,at the centre or via other referral agen-cies. Within the centre itself, visitorswill find print, video and online re-sources that help them:

� learn about the court system andcourt procedures,

� access legal information (print ma-terials, videos, legal informationwebsites),

� locate and fill out the relevantcourt forms for family or civilcases,

� explore free legal advice services,and

� consider alternatives to court.

Among the many public legal educa-tion materials are a series of guide-books on Representing Yourself inCourt, recently published by the LawCourts Education Society. (For online

copies, see www.lawcourtsed.ca.)

Litigants who need to do research onsubstantive law will be referred to thecourthouse library for assistance.

Hours of serviceThe centre is open for drop-in, Mon-day to Friday, from 9:00 am to 12:00pm and from 1:30 to 4:00 pm. For liti-gants outside the Lower Mainlandwho cannot visit in person, the centre’swebsite is a starting point for onlineresearch: see www.supremecourtselfhelp.bc.ca. The centre is not able to ac-cept telephone or email enquiries.

What the future holdsThe self-help centre is a pilot projectthat will be evaluated at the end of itsfirst year of operation, Colin Richard-son says, and decisions will be made atthat time on future steps — such aswhether to continue the service orwhether centres might open in otherlocations. “Civil (non-family) dutycounsel is not being considered at thistime,” he adds.

Funding for the self-help centre isfrom the Law Foundation, VancouverFoundation, Ministry of AttorneyGeneral and the Department ofJustice.�

Practice experience requirements eased for principalsThe Benchers have agreed with a Cre-dentials Committee recommendationto allow for greater flexibility in thepractice experience requirements oflawyers who wish to serve as princi-pals to articled students. As amended,Law Society Rule 2-30 now requires aprincipal:

� to have been in active (eitherfull-time or part-time) practice forseven of the 10 years preceding thearticling start date; and

� to have been in full-time activepractice for three of the five years

immediately preceding thearticling start date.

Close to a year ago, a change in LawSociety Rule 2-30 increased the prac-tice experience requirements of princi-pals. Instead of five years full-timepractice immediately preceding thearticling start date, a principal neededto have seven years’ practice experi-ence. This higher threshold came at therecommendation of the AdmissionsProgram Task Force.

Since then, the Credentials Committeehas seen an increase in the number of

applications brought forward by pro-spective principals to be exemptedfrom Rule 2-30 — in most cases be-cause these lawyers cannot meet therequirement of seven years of continu-ous full-time practice. The Committeeadvocated changing the rule, therebyaccommodating some of the appli-cants and limiting exemptions toexceptional circumstances.

For the text of Rule 2-30, as amended,see the enclosed Member’s Manualamendment package or visit the LawSociety website at www.lawsociety.bc.ca .�


News

Task Force recommends expanded role for law firm paralegalsBC lawyers should be allowed to dele-gate more work to their paralegals, in-cluding some solicitor’s services,limited advocacy in Provincial Courtand advocacy before some adminis-trative tribunals, according to an in-terim report of the Paralegal TaskForce presented to the Benchers inApril.

The Task Force recommends rework-ing Chapter 12 of the Professional Con-duct Handbook to lift some of theprohibitions on delegation to para-legals and to articulate new principlesto guide lawyers (see Draft principles ofdelegation to paralegals). In developingthese principles, the Task Force soughtto balance the risks of delegationagainst the benefit to the public ofmore affordable legal services in somecircumstances.

“The key to making sure that the pub-lic is protected is to require the lawyerto oversee any work delegated and toonly delegate work to employeeswhose training, education and experi-ence is appropriate to the work beingdelegated,” the Task Force told theBenchers.

It would be for each supervising law-yer to oversee the services provided bya paralegal and to identify and ad-dress any issues requiring the lawyer’sprofessional judgement. “Becauselawyers are responsible for all workentrusted to them, the services (of theparalegal) are regulated and insured,”the Task Force advised the Benchers.“The clients have recourse in the eventthat services are not properlydelivered.”

The Benchers have not yet debated theTask Force’s recommendations, otherthan to take a straw vote against allow-ing paralegals to give or receive un-dertakings. A final report is expectedback before the Benchers for consider-ation later this year or early next year,after the Task Force has consulted fur-ther with the Provincial Court on the

possibility of permitting law firmparalegals in Small Claims Court.

The Task Force last reported to theBenchers in December, 2003. At thattime, the Benchers considered butrejected the option of a paralegal cer-tification program. The Task Forcesubsequently focused on two issues —whether the Law Society should ex-pand the range of services that lawyerscan delegate to their non-lawyer staffand whether the Society should definethe qualifications of such staff.

Life Bencher Brian J. Wallace, QC,chair of the Task Force, together withParalegal Task Force members Presi-dent Ralston S. Alexander, QC, LifeBencher William J. Sullivan, QC andformer Lay Bencher Jaynie W. Clark,have spent the past year on those ques-tions.

As a starting point in its work, the TaskForce defined a paralegal as “a non-lawyer employee who is competent tocarry out legal work that, in the ab-sence of a paralegal, would need to bedone by the lawyer.”

After canvassing the current work of

today's paralegals, the Task Forcecame out in favour of broadening thescope of delegation — to provide thepublic greater access to legal services.

What new services would be suitablefor paralegals? The Task Force pro-poses to allow paralegals to meetdirectly with clients to take instruc-tions on some solicitor’s services suchas uncontested divorces and servicesprovided by notaries public, includingsimple conveyances and simple wills.In the Task Force’s view, “it is appro-priate for lawyers’ paralegals to pro-vide services in relation to thesematters where the issues are notcomplex and the amounts in questionare not large, provided the matters areappropriately supervised by thelawyer.”

The Task Force also proposes that lawfirm paralegals should be permitted torepresent clients before administra-tive tribunals if such representation ispermitted by those tribunals and notprohibited by law. “The client is in abetter position than if he or she retainsa ‘consultant’,” the Task Force told theBenchers. “[T]he paralegal employed


News

by a lawyer is supervised and the law-yer employer is regulated and insuredand responsible for all work done byhis or her employees.”

Following consultations with theChief Judge and Associate ChiefJudge, the Task Force has also identi-fied some advocacy functions forparalegals in Provincial Court — (in

criminal or quasi-criminal matters)uncontested interlocutory applica-tions or “ticket offences” where thereis no risk of imprisonment or signifi-cant fines or other serious conse-quences or (in family matters) onuncontested applications.

Another prospect is for law firmparalegals to represent clients in Small

Claims Court. The Task Force notesthat businesses are permitted toappear in Small Claims Court throughan officer, director or employee. Formany Small Claims Court litigantswho might otherwise have to

Draft principles of delegation to paralegalsThese draft principles have been extracted from the Interim Report to the Benchers on Delegation and Qualifications of Paralegals ofthe Paralegal Task Force. The Benchers have not yet debated the report or its recommendations, other than by taking a straw vote re-specting Principle 4(c), as noted below.

It is in the interests of the professionand the public in the efficient deliv-ery of legal services that lawyers bepermitted and encouraged to dele-gate legal tasks to their paralegals.

By delegating work to paralegals,lawyers can ensure the legal servicesthey provide are delivered cost-effec-tively to clients. A “paralegal” in thiscontext is a non-lawyer employeewho is competent to carry out legalwork that, in the absence of aparalegal, would need to be done by alawyer. A lawyer must be satisfiedthat the paralegal is competent by de-termining that one or more of theparalegal’s training, work experienceor education is sufficient for theparalegal to carry out the work dele-gated.

A lawyer who delegates work toparalegals should do so in accor-dance with the following principles:

1. A lawyer is responsible for allwork delegated.

2. A lawyer must be satisfied that aparalegal is qualified to compe-tently carry out the work dele-gated to the paralegal by one ormore of education, training andwork experience.

3. A lawyer must appropriately su-pervise and review the work of a

paralegal taking into consider-ation that person’s qualificationsand skills and the tasks that thelawyer delegates.

4. The lawyer may, with the con-sent of the cl ient, al low aparalegal to perform certain ad-vocacy work on behalf of that cli-ent. Because a lawyer cannotdirectly supervise a paralegal’sadvocacy work, the delegation ofsuch work is permitted only asfollows:

(a) A paralegal may represent aclient in Provincial Court:

(i) in the Small Claims Division;

(ii) in criminal or quasi-crimi-nal matters:

a. on uncontested interlocu-tory applications;

b. on those hearings that theChief Judge of the ProvincialCourt assigns to Judicial Jus-tices of the Peace1;

(iii) in the Family Division, onlyon uncontested matters;

(b) A paralegal may represent aclient on matters before adminis-trative tribunals if permitted bythe tribunal and not prohibitedby legislation;

(c) A paralegal may give or

receive an undertaking in a hear-ing described in (a) or (b) if thecircumstances require it and onlythen. When a paralegal gives anundertaking, it is given or re-ceived on behalf of the lawyer.*

*[Note: A straw vote conducted atthe April 8, 2005 Benchers meetingindicated that the Benchers were notin favour of allowing non-lawyers togive undertakings. The Task Forcehas agreed to take that feedback intoaccount when making its final re-port.]

5. A paralegal must be identified assuch in correspondence and doc-uments that he or she signs, andin any appearance before a Courtor tribunal on behalf of a client.

____________1 Pursuant to Chief Judge Baird Ellan’sAssignment of Duties September 1, 2004the following types of hearings are as-signed to Judicial Justices of the Peace:

“(a) Hearings in respect of all provin-cial offences in which proceedings arecommenced by ticket information;

(b) Hearings in respect of all traffic-re-lated municipal bylaw offences;

(c) Hearings in respect of any traffic-re-lated offence under the GovernmentProperty Traffic Regulations and AirportTraffic Regulations made pursuant tothe Government Property Traffic Act ofCanada (adult only).”

continued on page 10


represent themselves, paralegalscould offer another alternative — legalrepresentation or assistance that isaffordable and backed by training andregulation. The Provincial Court judi-ciary is reviewing this option in itsown study, and the Task Force plansfurther consultations with the Courtlater in the year. Any change to allowlaw firm paralegals in Small ClaimsCourt would require a legislativeamendment.

Future changes to the scope of workopen to law firm paralegals wouldalso require Bencher approval of Pro-fessional Conduct Handbook changes.Since direct supervision of a paralegal

by a lawyer would be inconsistentwith some broader paralegal func-tions, the Task Force recommends thatlawyers instead have responsibilityfor “appropriate supervision and re-view.” The Handbook would likewiseneed to accommodate a paralegal hav-ing a direct relationship with a client,acting finally without reference to thelawyer in some situations and givingclients legal advice.

In completing its work for the Bench-ers, the Task Force also consideredwhether to recommend specific quali-fications for paralegals who engage inexpanded practice. In the end, a law-yer must be satisfied that a paralegal iscompetent by determining that one ormore of the paralegal’s training, workexperience or education is sufficient

for the paralegal to carry out delegatedwork. The Task Force recommends al-lowing each supervising lawyer toevaluate a paralegal’s abilities to per-form the tasks delegated and that theLaw Society not specify qualificationsfor such paralegals or approve partic-ular paralegal programs.

The Benchers will be asked to considerthe scope of practice for lawyers’paralegals as recommended by theTask Force when this issue comes backto their table later this year or early2006.

The Interim Report to the Benchers onDelegation and Quali f icat ions ofParalegals is available in the Reportssection of the Law Society website atwww.lawsociety.bc.ca.�

Paralegals … from page 9

Compensation claims will be decided first under trust protectioncoverageSince May 1, 2004, the Law Society’scompulsory liability insurance policyhas provided coverage, not only forlawyer negligence (Part A), but forclaims arising from the theft of moneyor property by a BC lawyer relating tohis or her practice of law (Part B or“trust protection” coverage). Claimsmade on or after May 1, 2004 fall underPart B of the policy and are handled bythe Lawyers Insurance Fund.

The Special Compensation Fund hasremained responsible for determina-tion of all claims prior to May 1, 2004(including those relating to formerlawyer Martin Wirick). Moreover, theFund will continue to exist under theLegal Profession Act. With the co-exis-tence of trust protection coverage andSpecial Compensation Fund coverage,there is potential for confusion in theeyes of the public on how to apply forcompensation.

To provide greater certainty, the

Benchers have confirmed that claimsfor compensation arising from lawyerdefalcation must be decided first un-der Part B trust protection coverage,and that the Special CompensationFund should be a fund of last resort.Most, if not all, claims for compensa-tion arising from lawyer misappropri-ation are expected to be resolvedentirely under Part B.

A new Rule 3-33 implements this pol-icy as follows:

Limit on payments from the Fund

3-33 Despite Rules 3-31 and 3-32,the Special Compensation FundCommittee, or the subcommitteewith the consent of the Committee,must not authorize a payment fromthe Special Compensation Fund inrespect of a claim made on or afterMay 1, 2004 unless the claimant hasmade a claim under Part B of thepolicy of professional liability

insurance and the claim has beendenied in whole or in part.

The Special Compensation Fund Com-mittee, which had raised these processissues for Bencher consideration, alsolooked at whether a cap or limit onFund payments was advisable. In rais-ing this issue with the Benchers inApril, the Committee recommendedagainst placing an annual global capor “per-claim” cap on Special Com-pensation Fund payments, on the ba-sis that a judicious use of discretionwas the best way to manage Fund pay-outs. At the Benchers’ suggestion, theCommittee will study the question of acap further, as well as guidelines onpayments from the Fund.

Rule 3-33 and housekeeping amend-ments to Rules 3-40 and 3-41 relatingto the Special Compensation Fund arereflected in the enclosed Member’sManual amendment package.�

News


Lay Benchers offered per diemThe Benchers have approved a policy,in effect April 1, to offer a per diempayment to lay Benchers for their ser-vice to the Law Society, following therecommendation of a special commit-tee charged with studying the issue.

That committee — chaired by G. LeighHarrison, QC and composed of LifeBenchers Warren Wilson, QC, TrudiBrown, QC and William Everett, QCas well as lawyer Martin Taylor, QC —canvassed the practices in other pro-fessions and other provinces. Thecommittee canvassed whether BC’slay Benchers should receive someform of remuneration and, if so, howmuch and who should pay it.

The committee observed that remu-neration could help recognize the hardwork and valuable contribution of layBenchers, although this advantagehad to be weighed against the possibil-ity that such payment might imply aninequality between lawyer andnon-lawyer Benchers. On balance, amajority of the committee favoured re-munerating lay Benchers.

A point the committee found persua-sive is that lay Benchers in all of thelarger jurisdictions outside of BC re-ceive compensation. Moreover, thereare some fair reasons to distinguishthe position of elected Benchers andlay Benchers with respect to remuner-ation — since the elected Benchers arelawyers and have a direct interest ingood governance of the professionwhile lay Benchers are representativesof the public and have a more generalinterest.

In some jurisdictions (notably, Albertaand Ontario), it is the government thatpays lay Benchers. In BC, the provin-cial government’s policy is to remu-nerate appointees to outside bodiesonly if government appoints a major-ity of board members. In the view ofthe Law Society’s special committee,there were both principled and practi-cal reasons why the Society shouldpay the lay Benchers and not call ongovernment to do so.

“Considering the paramount publicinterest in an independently governed

legal profession, and in view of the en-croachments on that independence inother jurisdictions, […] the Law Soci-ety should not invite anything thatcould result in real or perceived gov-ernment influence over Benchers,” thecommittee recommended. “The prac-tical point is that the government doesnot pay any of its lay appointees toprofessional governing bodies, and ismost unlikely to agree to do so.”

The amount of the per diem approvedby the lawyer Benchers is $125 per dayand $75 per half day (four hours orless) for Benchers meetings and hear-ings. As noted by the special commit-tee, the amount of the remuneration isnot intended to reflect the value of thelay Benchers’ time or contributions orto serve as income replacement, butrather “to soften the financial impactof their service and make it possiblefor a wide range of people to acceptappointment.”

None of the Law Society’s six layBenchers participated in the decisionon remuneration.�

Green paper on civil justice reformThe Benchers are considering makinga submission to the Civil Justice Re-form Working Group of the BC JusticeReview Task Force.

The Civil Justice Reform WorkingGroup — co-chaired by BC SupremeCourt Chief Justice Donald Brennerand Deputy Attorney General AllanSeckel, QC — has so far backed an in-crease in the monetary jurisdiction ofthe Small Claims Court that takes ef-fect on September 1 and the introduc-tion of an economical litigationprocess for claims of $100,000 or less inSupreme Court.

Last fall the Working Group also is-sued a green paper, The Foundations ofCivil Justice Reform, which identifiescost and delay as problems in BC’s

civil justice system.

At that time Attorney General GeoffPlant, QC said he was concerned thatSupreme Court trials had become soexpensive, time-consuming and com-plex that only large corporations, in-surance companies and governmentscan afford to have their disputesresolved there.

The Working Group now points tocourt statistics from the past five yearsshowing the number of cases in Su-preme Court have dropped by half,but cases proceeding are taking twiceas long to resolve.

The Working Group is now calling forfundamental reforms — more thanwhat it calls “innovative off-ramps

from the litigation highway.”

“Our planning for the future must takeinto account that, while adversarialvalues and litigation models dominateour theories about the civil justice sys-tem, it is in fact a system where thepracticalities are all about dispute res-olution,” the Working Group states inits green paper.

For background information and acopy of the green paper, seewww.bcjusticereview.org. For a closerlook at possible reforms, consider at-tending “Restructuring Justice,” aCLE course that includes consulta-tions by the Civil Justice ReformWorking Group. It takes place June9-10 in Vancouver: see details on page20.�

News


News

Women in the Legal Profession Task Force

Equality initiatives elsewhere may hold promise for BC women lawyersAfter examining leading equity stud-ies from across Canada and in theUnited States, the Women in the LegalProfession Task Force is preparing torecommend to the Benchers new poli-cies and programs for advancing theequality of women lawyers in BC.

The Law Society’s own studies — ofthe Women in the Legal Profession(WILP) Subcommittee (1989-1991)and Gender Bias Committee (1990-1992) — were landmarks. The WILPstudy showed that BC women lawyerswere leaving the profession in dispro-portionate numbers to men and thatmany women faced discrimination inthe practice of law, difficultiesaccommodating work and career re-sponsibilities and barriers to careeradvancement.

To address some of the concerns, theLaw Society introduced a number ofchanges:

� A 1992 Professional ConductHandbook rule that identifieddiscrimination, including sex dis-crimination and sexual harass-ment, as a form of professionalmisconduct;

� a 50% reduction in liability insur-ance for members in part-timepractice, beginning in 1993;

� a non-practising membership cate-gory with a lower fee, beginning in1994;

� active encouragement of womenlawyers to stand for election asBenchers;

� reimbursement of reasonablechild-care expenses incurred byBenchers and lawyers while on un-paid Law Society business;

� encouragement of law firms toadopt workplace policies onmaternity and parental leave,alternative work arrangements,

gender-neutral language, employ-ment equity and workplace ha-rassment; and

� retaining an independent Discrim-ination Ombudsperson (now Eq-uity Ombudsperson) to mediateallegations of discrimination inlaw firms, with the agreement ofall parties.

The Law Society initially monitoredthese initiatives, including the uptakeof workplace policies. But now, 15years later, the question remainswhether women have achieved

equality and, if not, what more shouldbe done.

Last December, the Benchers struck anew Women in the Legal ProfessionTask Force — composed of VancouverBenchers Gavin Hume, QC, chair, andMargaret Ostrowski, QC, Life BencherWarren Wilson, QC, Lay Bencher JunePreston and lawyer Wynn Lewis. TheTask Force has considered whether toundertake further survey work in BCor instead to review existing studiesand to recommend policy and pro-grams that will help BC’s womenlawyers.

In its interim report to the Benchers inMarch, the Task Force said that a gen-der equality problem still exists in theprofession.

Although women have for many yearsmade up 50% of law school graduates,they still make up only a third of alllawyers in the profession. On abrighter note, this is a marked increasefrom 15 years earlier when womenrepresented just one-quarter of theprofession.

What still is evident from the statisticsis that a proportionally higher percent-age of women are in part-time practiceor hold non-practising membership(32% of women as compared to 17% ofmen). 2004 President Bill Everett, QCreflected on these points in his Presi-dent’s View column when he asked,“Are women lawyers where they want tobe in their careers, or are they settling forless?”

The negative experiences of BCwomen lawyers on issues of discrimi-nation, harassment, career satisfac-tion, advancement or remunerationidentified some years ago appear to bemirrored in other jurisdictions. Forthat reason, the Task Force took acloser look at the recent studies out ofAlberta, Ontario and some Americanstates and concluded that the experi-ences in those jurisdictions remainedrelevant and helpful in formulatingpossible initiatives in BC.

A 2003 Law Society of Alberta studyflagged that 92% of the women and69% of the men surveyed thought thatthere was some form of bias or dis-crimination against women in the pro-fession (33% of the men and 14% of thewomen thought there was discrimina-tion against men). For details, see FinalReport on Equity and Diversity in Al-berta’s Legal Profession at www.lawso-cietyalberta.com/files/reports/Equity_and_Diversity.pdf.

According to that study, sexualharassment is an ongoing problem,and the most common type ofdiscrimination against women and

According to a recent studyout of Alberta the most com-mon type of discriminationagainst women and other

diversity groups wasperceived to be discrimina-tion in career advancement.


News

other diversity groups was perceivedto be discrimination in careeradvancement.

“Discrimination was most commonlymanifested in the forms of racist andsexist comments, denial of opportuni-ties to work on files, exclusion fromopportunities to be involved inworkplace activities related to careeradvancement, exclusion from work-related social or business develop-ment activities related to careeradvancement, and negative careerconsequences as a result of havingchildren or being a parent,” the BCTask Force told Benchers in describingthe Alberta study.

The Alberta report concludes that,while incidences and perceptions ofdiscrimination have slightly de-creased since 1991, there remain seri-ous hindrances to the advancement ofwomen lawyers. Little progress hasbeen made in the private sector to ac-commodate parenting by both menand women. The study also foundoverall dissatisfaction in the culture ofthe legal profession among active andinactive members.

Turning to Ontario, BC’s Task Forcereviewed the 2004 report of the LawSociety of Upper Canada: TurningPoints and Transitions: Women’s Careersin the Legal Profession. This report is theculmination of a study of the samepanel of lawyers over a 12-year period.It is available at www.lsuc.on.ca/eq-uity/pdf/oct2604_turning_points.pdf.

While the study noted some impres-sive advances in the status and mobil-ity of women lawyers in Ontario since1990, there were also “sizeable gapsthat persist between men and womenin remuneration, promotional oppor-tunities and levels of job satisfaction.”Moreover, both men and women facedcommon challenges in law practice,including balance between career andfamily, lack of workplace flexibilityand benefits.

According to that study, women law-yers in Ontario were less likely to bepartners or sole practitioners, lesslikely to own businesses, less likely toattain management or supervise oth-ers and more likely to leave the profes-sion than men.

The Task Force in BC has recom-mended against conducting another

full-scale, detailed follow-up study ofBC lawyers on equality issues, butplans to draw on the best researchfrom other Canadian jurisdictions andfrom Washington State, Californiaand New York. At this juncture, theTask Force is evaluating equality ini-tiatives that have already seen successand might serve as a model in BC.

* * *The Task Force plans a further reportand recommendations to the Benchersin the coming months. If you wouldlike more information, or have a viewyou would like the Task Force to con-sider, please contact any member ofthe Task Force or sent your commentscare of Kuan Foo, Staff Lawyer, Policyand Legal Services, by email [email protected] or by mail to the LawSociety office.�

2006 practice fee will go to referendumThe Benchers will hold a referendumthis year to set the Law Society’s 2006annual practice fee; and the fee resolu-tion they propose to the professionwill not include a CBA fee component.

Although there were different viewsaround the table, many Benchers fa-vour a referendum as allowing agreater number of lawyers to set the

fee resolution, compared to the num-ber who attend the Annual GeneralMeeting.

In 2004 BC lawyers rejected manda-tory payment of a CBA fee component,and the Benchers will not include thisas part of the proposed Law Societypractice fee when sett ing thereferendum question. The Benchers

are expected to approve a fee resolu-tion on May 6, which will be posted onthe Law Society website.

The referendum ballot package will bemailed in early June. The deadline forreceipt of ballots is expected to be setfor June 21, with the referendum countscheduled for June 22.�


News

Would you like to be considered for Law Society appointments?The Law Society makes appointmentsto a variety of boards, commissionsand agencies and is seeking volunteersinterested in serving as appointees.

While a few of these outside bodies re-quire that the Law Society appointeebe a Bencher, most do not, whichmeans the Society looks to the profes-sion to find volunteers and build apool of prospective candidates.

Periodically, the Law Society seeksexpressions of interest from theprofession so as to expand the pooland to confirm that those who havepreviously expressed interest remain

available for appointment.

Within the next 12 months, the LawSociety will consider appointments tothe following bodies:

� Vancouver Building Permit Boardof Appeal

� Continuing Legal Education Soci-ety (board of directors)

� Law Foundation (board of gover-nors)

� BC Medical Services Foundation(board of directors)

� Vancouver International Airport

Authority (board of directors).

These appointments offer a lawyer theopportunity to participate more fullyin the work of the profession and thecommunity and to demonstrate thecommitment of the profession to pub-lic service. If you would like to be con-sidered, please send your curriculumvitae and a note about which appoint-ments interest you, by mail or email to:

David NewellCorporate Secretary8th Floor, 845 Cambie StreetVancouver BC V6B 4Z9Email: [email protected].�

Fee splitting rule

LLPs can include law corporations and non-lawyer partners from otherprovincesRecent Law Society Rule changes nowexpressly allow limited liability lawpartnerships in BC to include a lawcorporation or, in the case of aninter-jurisdictional LLP, a non-lawyerwho is permitted to participate in alaw partnership in another Canadianjurisdiction.

Law corporations as partnersof LLPs

Rule 9-13, which permits a BC lawyerto practise law through an LLP, alsonow expressly permits law corpora-tions to do so. Since the duties andresponsibilities of an individual law-yer are not changed by virtue of beingan employee, shareholder, officer, di-rector or contractor to a law corpora-tion, there is no reason to prevent a lawcorporation from joining an LLP.

The Law Society requires only that thepartner making the application onbehalf of the LLP confirm that thevoting shareholders of a BC law corpo-ration are practising members of the

Society.

Non-lawyer partners in nationalLLPs

A national law firm may become anLLP under the BC Partnership Act andthen register extraprovincially in anyother province (or provinces) in whichit carries on business. The firm may al-ternatively set up the LLP under thelegislation of another province andregister extraprovincially under theBC Partnership Act.

The Law Society Rules contemplate asystem for approval of LLPs, includ-ing those that do business in more thanone province. As first introduced, Rule9-15(2) provided that the ExecutiveDirector may issue a statement ofapproval for an LLP in which allpartners are members of the Society or aremembers of a recognized legal professionin another jurisdiction. In April, theBenchers approved an expansion ofthe Rule to allow partners of an LLP toinclude “a non-lawyer participating in

another Canadian jurisdiction aspermitted in that jurisdiction.”

This change reflects the national land-scape. Law firms in some provincesnow include entities that are not“members” of a recognized legal pro-fession, but are nonetheless entitled tojoin in partnership with lawyers inthose provinces. In Quebec, for exam-ple, certain trusts are permitted toform partnerships with lawyers, andin Ontario some non-lawyers whosework complements legal practice(such as patent and trademark agentsand engineers working under lawyersupervision) can also be partners in anOntario law firm.

While the new Rules may result inmulti-disciplinary partnerships be-tween lawyers from BC and bothlawyers and non-lawyers from an-other province, Part 9, Rule 6 of theProfessional Conduct Handbook contin-ues to prohibit fees from being sharedby BC lawyers and non-lawyers in thepartnership.�


Practice Tips, by David J. Bilinsky, Practice Management Advisor

Fighting back against fraud — the risks in real estate� For the love of moneyPeople will lie, Lord, they will cheatFor the love of moneyPeople don’t care who they hurt or beat … �— Words and music by The O'Jays

Fraud against lawyers and involvinglawyers is on the rise across Canadaand the United States — and BC law-yers have unfortunately seen theirshare of the problem.

Fraudsters have exploited the weak-nesses in our systems and shown whywe must all put into place practicesafeguards to limit our exposure.There are many factors that give rise tofraud. This article does not focus onthose weaknesses, but on helping alawyer avoid becoming the next vic-tim or pawn of a fraudster.

As reported in this Bulletin, the Bench-ers have recently amended the Profes-sional Conduct Handbook to strengthen

Chapter 4, Rule 6:

Dishonesty, crime or fraud

6. A lawyer must not engage in anyactivity that the lawyer knows orought to know assists in or encour-ages any dishonesty, crime or fraud,including a fraudulent conveyance,preference or settlement.3

Footnote

3. A lawyer has a duty to be on guardagainst becoming the tool or dupe of anunscrupulous client or of persons asso-ciated with such a client and, in somecircumstances, may have a duty to makeinquiries. For example, a lawyer shouldbe wary of a client who:

(a) seeks the use of the lawyer’s trustaccount without requiring any sub-stantial legal services from the lawyerin connection with the trust matters,or

(b) promises unrealistic returns ontheir investment to third parties whohave placed money in trust with thelawyer or have been invited to do so.

Without limiting the endless ingenu-ity of fraudsters, here are examples ofthe main types of fraud that Canadianlawyers have encountered in real es-tate.

Use of false identityIn this circumstance, the fraudster im-personates the true owner of theproperty. The fraudster chooses theproperty, does a title search to confirmthe identity details of the owner andthen makes up false identity papersthat match the identity of the trueowner.

If the property is already mortgaged,the fraudster may forge a discharge toclear title. Then he or she applies to anew financial institution for mortgagefinancing equal to one-half the prop-erty value. The fraudster is countingon the financial institution doing onlya basic background check since themortgage is only 50% of the propertyvalue.

On receipt of the new mortgage funds,the fraudster may keep up the pay-ments for a time before disappearingwith the balance of the funds. The trueowner is then left with the headache oftrying to discharge the fraudulentmortgage. The lawyer who preparedand registered the mortgage laterfinds out that he or she witnessed thesignature of a fraudster.

In a variation on the identity fraud, thefraudster presents to a lawyer a falseagreement of purchase and sale to ob-tain title to a property. The fraudsterthen mortgages the property. Again,after a time, both the fraudster and the

Practice & Ethics



Practice & Ethics

balance of the mortgage funds disap-pear. The true owner of the propertyfinds that the property is in foreclosureand that he or she no longer holds title.The lawyer later discovers that he orshe unwittingly helped a fraudster inobtaining title to the property.

A similar scenario involves thefraudster targeting property ownedby a corporation. False minute booksare prepared and the fraudster mayimpersonate one of the corporate prin-cipals. The fraudster applies to a finan-cial institution for financing, andpresents the false corporate docu-ments in support of the mortgage ap-plication. Soon after receiving thefunds, the fraudster disappears.

Another possibility is for the fraudsterto impersonate both the purchaser ofproperty and a legitimate lawyer. Thefraudster enters into a real purchaseand sale contract with a legitimatevendor. Using the false lawyercredentials, the fraudster opens a trustaccount and mocks up letterhead as ifacting for the purchaser. The fraud-ster-as-lawyer draws up the purchasedocuments and applies for mortgagefinancing. When the mortgage fundsare received, they are deposited to thefalse trust account. Then the fraudsterand the mortgage funds disappear.

Value fraudIn this situation, back-to-back pur-chases of the same property are ar-ranged from a legitimate vendor. Thefirst purchase is for the arranged saleprice — say $300,000. Then a subse-quent (fraudulent) deal (from onefraudster to another) is arranged (i.e., a“flip”) for $400,000. Both purchasesare set to close on the same day. Thefraudster arranges for a high-ratiomortgage on the basis of the seconddeal. The high-ratio mortgage fundsare used to close the real estate deals,since the amount of the mortgage (95%of $400,000 = $380,000) is enough to

cover the deals.

The fraudsters are counting on the fi-nancial institutions not doing their fulldue diligence or having an on-site ap-praisal done of the property to verifythe stated property value. Sooner orlater, the balance of the mortgagefunds and the fraudster disappear,leaving the bank holding a mortgagefor far more than the property isworth.

A second value fraud occurs when alegitimate agreement of purchase andsale is entered into between a vendorand the fraudster, say for $350,000.The vendor and the fraudster thensign a one-page amendment that pro-vides a credit of $50,000 against thepurchase price (stated to be for re-pairs). The fraudster does not disclosethis credit in obtaining high-ratio fi-nancing. The deal closes and the mort-gage payments stop shortly thereafter.The fraudster disappears with the bal-ance of the financing leaving the bankwith a mortgage greater than the valueof the property.

What to look forThere are usually indications that afraud is in the works. Here are some ofthe signs to watch for:

Recent property purchase situations

� The client has recently purchasedthe property on an all-cash basisand is now seeking to place a mort-gage against the property.

� The client has a transfer of theproperty but no other documentsrelating to the purchase of theproperty.

� The client does not return to thelawyer who did the purchase to dothe mortgage transaction and ex-presses a desire for the new lawyernot to contact the former one.

� A historical title search revealsrecent transfers at increasinglyhigher amounts, perhaps with thesame lawyer on all the

transactions.

Agreement of purchase and sale

� The agreement contains no hand-written amendments.

� The client is reluctant to produceidentification or is uncomfortablewith you making (front and back)photocopies of the identificationproduced by the client.

� An amendment to the agreementprovides for either a reduction inthe purchase price or a payment tothe vendor following closing.

� The vendor acknowledges pay-ment of a deposit that is not re-quired by the agreement ofpurchase and sale.

� The deposit is payable directly tothe vendor, not to a real estateagent or a lawyer.

� There is no real estate agent in-volved in the transaction.

� There is an agent listed in theagreement, but the lawyer does notreceive any communications fromthe agent or the agency (such as forpayment of a commission).

The transaction(s)

� The client does not have fire insur-ance on the home.

� The utility companies are unawareof the vendor owning the home.

� The client needs to close the trans-action very quickly.

� The client is a new client and prom-ises to refer more transactions tothe lawyer.

� The client arranges the mortgagethrough a broker, and the broker-age fee is unusually high.

� The client is prepared to payhigher legal fees than normal forthe lawyer’s services.

� The purchase price is much higherthan the purchase price of recenttransfers of the same property.

Practice Tips … from page 15

� There are large and unusual ad-justments in the Statement of Ad-justments (e.g. a large credit forrenovations or work to be done).

� The statement of adjustments doesnot reflect the terms of the agree-ment of purchase and sale and anyamendments thereto.

� The title indicates a pattern ofmortgages being registered anddischarged shortly afterwards.

� All of the funds required to closethe transaction come from an insti-tutional lender.

� The name of the client in the identi-fication produced by the clientdoes not match the name of the cli-ent in other documents in thetransaction.

Mortgage proceeds

� There is a surplus of mortgage pro-ceeds after the closing of the trans-action to be paid to the borrower orto a third party.

� The client directs part of the mort-gage proceeds to third parties (e.g.off-shore recipients, currency ex-change).

� The client instructs the lawyer thatit is unnecessary to prepare writtendirections authorizing the pay-ment of funds to third parties.

� The mortgage is a cash-back mort-gage and the cash-back is the fullamount of the equity in the prop-erty.

� The client directs the lawyer to re-bate a portion of the mortgage sur-plus to the vendor.

Client is a facilitator

� A new client (facilitator) refers anumber of real estate files to thelawyer, and the client, althoughnot a party to the transaction, con-trols the transaction (e.g. gives in-structions to the lawyer orarranges for the parties to the

transaction to sign documents)and directs the parties in the trans-action.

� The client does not have a personalcheque for his or her pre-autho-rized debit plan but provides ablank “counter cheque.”

� The lawyer is instructed to pay theexcess mortgage proceeds to thefacilitator even though the facilita-tor does not appear to have an in-terest in the transaction.

Flip transaction

� The vendor acquires the propertythe same day that it is being soldfor a higher purchase price (fliptransaction).

� The lawyer is asked to act for boththe purchaser and the vendor inthe flip transaction (see ProfessionalConduct Handbook, Appendix 3).

� A bank loans money on thestrength of the consideration con-tained in the flip agreement.

� The client instructs the lawyer notto disclose to the lender that thetransaction is a flip or that thelender is lending money on thehigher consideration.

� The transfer signed by the originalvendor contains a lower consider-ation and is manually altered priorto closing to match the consider-ation set out in the agreement ofpurchase and sale.

Multiple transactions

� A new client begins referring anumber of real estate files to thelawyer, and the same parties (pur-chasers and vendors) are involvedover and over in transactions.

� The client indicates that he or she isin the business of renovatinghomes.

� The same real estate agency ap-pears regularly on the agreementsof purchase and sale.

� The mortgages arranged in thesetransactions are high-ratio mort-gages with mortgage insurance.

� The lawyer is instructed to use theexcess mortgage proceeds for thepurchase of another property.

Corporations

� The original minute book for thecompany is not available or is in-complete.

Conclusion

Real estate fraud is but one type offraud that can target lawyers. Upcom-ing Practice Tips columns will addressfraud in other practice areas and fraudbeing perpetrated via the Internet.One thing is clear: every type of fraudinvolves someone motivated by thelove of money who will seek to cheatby exploiting any weaknesses in ourday-to-day systems.

Resources

www.lsuc.on.ca/news/pdf/convmar05_mortgage_fraud.pdf – Law Societyof Upper Canada’s report to Convoca-tion on mortgage fraud.

www.lsuc.on.ca/services/pdf/july2304_fraud_indicators.pdf – Law So-ciety of Upper Canada’s practice tipson real estate transactions.

www.lsuc.on.ca/services/pdf/july2304_fraud_scenarios.pdf – Law Soci-ety of Upper Canada’s real estatefraud scenarios.

www.lsuc.on.ca/services/real_es-tate_fraud.jsp – Law Society of UpperCanada’s website on fighting real es-tate fraud.

* * *

I gratefully acknowledge materialsprepared by LAWPRO and by the LawSociety of Upper Canada that wereadapted and summarized in this col-umn, with permission, for the benefitof BC lawyers.�


Practice & Ethics


Practice & Ethics

Services to members

Practice and ethics advice

Contact David J. (Dave) Bilinsky, Practice Management Advisor, to discuss practice management issues, with an emphasis on technology, strate-

gic planning, finance, productivity and career satisfaction. Email: [email protected] Tel: 604 605-5331 or 1-800-903-5300.

Contact Felicia S. Folk, Practice Advisor, to discuss professional conduct issues in practice, including questions on undertakings, confidentiality

and privilege, conflicts, courtroom and tribunal conduct and responsibility, withdrawal, solicitors’ liens, client relationships and lawyer-lawyer rela-

tionships. All communications are strictly confidential, except in cases of trust fund shortages. Tel: 604 669-2533 or 1-800-903-5300 Email: advi-

[email protected].

Contact Jack Olsen, staff lawyer for the Ethics Committee, on ethical issues, interpretation of the Professional Conduct Handbook or matters for re-

ferral to the Committee. Tel: 604 443-5711 or 1-800-903-5300 Email: [email protected].

—————————————————

Interlock Member Assistance Program – Confidential counselling and referral services by professional counsellors on a wide range of personal,

family and work-related concerns. Services are funded by, but completely independent of, the Law Society, and provided at no cost to individual BC

lawyers and articled students and their immediate families: Tel: 604 431-8200 or 1-800-663-9099.

—————————————————

Lawyers Assistance Program (LAP) – Confidential peer support, counselling, referrals and interventions for lawyers, their families, support staff

and articled students suffering from alcohol or chemical dependencies, stress, depression or other personal problems. Based on the concept of “law-

yers helping lawyers,” LAP’s services are funded by, but completely independent of, the Law Society and provided at no cost to individual lawyers:

Tel: 604 685-2171 or 1-888-685-2171.

—————————————————

Equity Ombudsperson – Confidential assistance with the resolution of harassment and discrimination concerns of lawyers, articled students,

articling applicants and staff in law firms or legal workplaces. Contact Equity Ombudsperson, Anne Bhanu Chopra: Tel: 604 687-2344 Email:

[email protected].

2005 Pacific Legal Tech Conference coming this fallMark your calendars now

for the 2005 PacificLegal Technology

Conference. Thed a y - l o n gevent takes

place on Friday,October 14, 2005 at the

Vancouver Convention &Exhibition Centre.

Pacific Legal Tech is your opportunityto explore many of the practical ad-vantages that the latest technology of-fers your own law practice, asdemonstrated in presentations byleading lawyers, legal administrators,librarians and technologists.

This year’s conference is not to bemissed. Watch www.pacificlegaltech.com for updates.�


Practice & Ethics

Remember your professional development in 2005BC lawyers are reminded of therequirement to report to the LawSociety in 2005 on their professionaldevelopment (continuing legal educa-tion) activities for the preceding 12months.

Each practising lawyer reports thisinformation as part of an AnnualPractice Declaration at the same timehis or her law firm files its annualTrust Report. Filing deadlines in 2005vary from firm to firm, and the LawSociety’s trust review staff providesmore information to all firms inadvance of their respective dates.Practising lawyers who are exemptfrom insurance, such as in-housecounsel and Crown Counsel, will filetheir Annual Practice Declaration inSeptember.

The Benchers encourage each practis-ing lawyer in BC to complete a mini-mum of 12 hours of coursework (theequivalent of two full course days)and 50 hours of self-study each year.The targets are set as minimum expec-tations for the profession and are notmandatory.

For BC lawyers, staying current on thelaw has always been a matter of pro-fessional responsibility. Rule 1, Chap-ter 3 of the Handbook provides that,with respect to each area of law inwhich a lawyer practises, he or she

must acquire and maintain adequateknowledge of the substantive law,knowledge of the practice and proce-dures by which that substantive lawcan be effectively applied and skills torepresent the client’s interests effec-tively.

By setting recommended minimumexpectations for professional develop-ment coursework and self-study andby requiring BC lawyers to report ontheir professional development, theBenchers have affirmed their commit-ment and that of the profession tocontinuing legal education and tocollecting comprehensive data fortracking continuing education in theprofession and determining the futureneeds of BC lawyers.

A lawyer who does not meet the rec-ommended minimum expectationsfor professional development, or takesno professional development over thecourse of a year, faces no conse-quences on reporting that fact to theLaw Society — with one exception. Ifcomplaints or concerns have arisenover a lawyer’s competency, and if thePractice Standards Committee ordersa review of that lawyer’s practice, thelawyer’s record of professionaldevelopment activities may be consid-ered in the course of the practicereview and be noted in the resultingpractice review report. As a result, the

issue could be considered by the Prac-tice Standards Committee or by a hear-ing panel should the lawyer’s conductor competence ultimately warrant aformal hearing.

Lawyers will be asked to report thecontinuing legal education coursesand programs they have attended inthe preceding 12 months, and also tospecify how much of that time wasdevoted to professional ethics or prac-tice management material. They willalso be asked to report on the hoursthey devoted to self-study during thatperiod, excluding any research or re-view of material undertaken in con-nection with specific files in theirpractice.

The Lawyer Education Task Force isdeveloping guidelines to assist law-yers in determining what constitutescoursework and what constitutesself-study. In general terms, it is antici-pated that reported hours of course-work will include time a lawyer hascommitted to:

� live programs, workshops andconferences, such as those offeredby the CLE Society of BC, TrialLawyers Association of BC, Cana-dian Bar Association, Federation

From the CourtsBC Supreme Court

A two-year pilot project will begin inthe Vancouver, Victoria, PrinceGeorge and Nelson Supreme Courtregistries beginning September 1 tostreamline cases under $100,000.

Supreme Court Rule 68 sets out thenew procedures and is available on theSupreme Court website at www.courts.gov.bc.ca/sc. Chief Justice

Brenner has issued a notice to the pro-fession, “Rule 68: Expedited LitigationProject Rule,” which is available atwww.lawsociety.bc.ca/N-SCC-Rule68.pdf.

BC Court of AppealThe BC Court of Appeal has advisedthe profession that, under Rule 40(9),there are lists of authorities that theparties need not reproduce in their

book of authorities. Instead, when oneof these authorities is being reliedupon, the Court of Appeal requiresthat the party reproduce only theheadnote and the passage relied upon.The authorities are set out as “fre-quently cited authorities” under“What’s new” on the BC Court of Ap-peal webpage: www.courts.gov.bc.ca/ca.�



Practice & Ethics

PLTC material now onlineThe Professional Legal TrainingCourse Practice Material is now avail-able online for articled students, BClawyers and lawyers from other prov-inces who are seeking to transfer to BCor practise here temporarily.

The material provides an overview oflaw and practice in British Columbia,in the following areas:

� civil litigation

� commercial

� company

� creditors’ remedies

� criminal procedure

� estates

� family

� professional responsibility

� practice management

� real estate

The material is in PDF format in the Li-censing & Membership section of thewebsite at www.lawsociety.bc.ca.

It can be viewed on screen or down-loaded and printed for private re-search and study and for supportingthe lawful practice of law by BClawyers and by lawyers from otherprovinces who are practising in BC.

Please note that the material may notbe copied, modified or distributed in

any way without the permission of theLaw Society.�

Restructuring JusticeThe CLE Soci-ety of BC isholding a newt w o - d a ycourse, Re-s t r u c t u r i n gJustice , onJune 9 and 10

in Vancouver to help lawyers preparefor changes ahead in the resolution ofcivil disputes. Under the theme of“getting on with business,” this coursefocuses on finding solutions to thecost, delay and complexity of civildisputes.

Co-chairs of the BC Justice ReviewTask Force, Allan Seckel, QC (Deputy

Attorney General) and Chief JusticeDonald I. Brenner of the BC SupremeCourt, will provide opening com-ments and invite feedback on the di-rection of civil justice reforms in BC.

Panels of experienced counsel, judgesand international guests will lead pre-sentations on civil justice today, in-cluding the tools that lawyers need tomeet the needs of different clients. Ses-sions include Shifting Family Law Awayfrom the Adversarial Framework, New Re-forms in the Supreme and ProvincialCourts (a closer look at expedited liti-gation and Small Claims changes) andWhat Do Clients Really Want from theSystem and from their Lawyers?

A choice of presentations and break-out discussions will explore both prac-tice and business implications — suchas how reforms will affect your bottomline and how you can provide servicesproportional to a particular dispute.Course participants can also delve intothe details of specific litigation re-forms of interest to them, such assettling complex cases, environmentalADR, the Court of Appeal settlementinitiative and child protection media-tion.

For details on all sessions and to regis-ter, see “courses” on the CLE websiteat www.cle.bc.ca.�

Check it out — the 2005 practice checklists are a click awayNew on the Law Society’s website thisspring are the 2005 practice checklists,ready for BC lawyers to download,print or adapt as required.

Highlights of the 2005 update include

procedural notes relating to the Busi-ness Corporations Act, LLP legislation,preliminary inquiries, the NationalSex Offender Registry, collections,Land Title Office e-filing and changes

in probate practice.

Ready to update your copy? Just clickon Practice Support atwww.lawsociety.bc.ca.�


Regulatory

Special Compensation Fund claimsThe Special Compensation Fund,funded by all practising lawyers in BC,compensates persons who suffer lossthrough the misappropriation orwrongful conversion of money orproperty by a BC lawyer acting in thatcapacity.

The Special Compensation Fund Com-mittee makes decisions on claims forpayment from the Fund in accordancewith section 31 of the Legal ProfessionAct and Law Society Rules 3-28 to 3-42.Rule 3-39 (1)(b) allows for publicationto the profession of summaries of thewritten reasons of the Committee.These summaries are published withrespect to paid claims, and withoutidentifying the claimants.

Special Compensation Fund Com-mittee decision involving claims20020107, 20020233, 20020260,20020402, 20020444, 20020517

Decision date: March 31, 2004Report issued: March 31, 2005

Claimant: A BankPayment approved: $145,527.99($132,412.57 and $13,115.42 interest)

Claimant: B Credit UnionPayment approved: $347,660.56($318,479.85 and $29,180.71 interest)

The V Drive propertiesB was the owner of property in Van-couver. He obtained a $136,000 loanfrom A Bank, secured by a mortgageregistered against the property. B latersubdivided the property into two lots.

In February, 2001 B entered into a con-tract to sell one of the lots to W and L.He contracted to sell the other lot toMr. and Mrs. W.

B obtained an inter alia mortgage for$200,000 and assignment of rents (infavour of N) against the two lots. Hearranged a further inter alia mortgagefor $323,610, registered in favour of BCredit Union.

On June 7, 2001 Mr. Wirick providedwritten undertakings to the lawyersrepresenting the purchasers in the saletransactions to pay out and dischargethe A Bank, B Credit Union and Nmortgages from both properties.

In both transactions, the purchasersobtained new mortgage financing: Mr.

and Mrs. W obtained financing from DBank, while W and L obtained financ-ing from E Bank.

With respect to the lot purchased by Wand L, Mr. Wirick received in trust$214,989.08 from their lawyer. Withrespect to the lot purchased by Mr. andMrs. W, Mr. Wirick received in trustfrom their lawyer $205,262.48. In nei-ther transaction did Mr. Wirick use thefunds to pay out the mortgage, but in-stead used the funds for other pur-poses, contrary to the undertakings hehad given.

As a result of Mr. Wirick breaching hisundertakings, the mortgages re-mained on title, other than the N mort-gage, which was discharged in 2003.

The Special Compensation Fund Com-mittee found that, while not everybreach of undertaking is fraudulent,the circumstances of this case did notsuggest negligence or error, but anintention to deceive. Mr. Wirickknowingly paid out money in breachof his undertakings and the Commit-tee was satisfied that he had misappro-priated or wrongfully converted thefunds.

The Committee decided that it wouldnot require the claimants to exhaust

Unauthorized practice actionsUndertakings Injunction

On application of the Law Society, theBC Supreme Court has ordered thatMark Edward Grimwood, a formerlawyer of Vancouver, be permanentlyenjoined from appearing as counsel oradvocate; from drawing documentsfor use in a judicial or extra-judicialproceeding or a proceeding under astatute, documents relating to real orpersonal estate for a fee or wills, trustdeeds, powers of attorney or estate

documents; from negotiating in anyway for the settlement of a claim or de-mand for damages; from giving legaladvice or from offering or holdinghimself out as qualified or entitled toprovide any of these services for a fee:February 24, 2005.

The Court further ordered that theLaw Society be awarded costs.�

Martin WirickVancouver, BCCalled to the Bar: May 14, 1979Resigned from membership: May 23,2002Custodian appointed: May 24, 2002Disbarred: December 16, 2002 (seeDiscipline Case Digest 03/05)



Regulatory

their civil remedies in this case by ob-taining a judgment against Mr. Wirick,given that there was little hope of re-covery from him.

The Committee allowed the claim of ABank and B Credit Union, subject tocertain releases, assignments and con-ditions, including the requirementthat they discharge their mortgages.The Committee also exercised its dis-cretion to pay on these claims interestat the contract rate to May 24, 2002 andthereafter to the date of the decision atthe applicable rate to a maximum of6% per annum.

Following this payment and dischargeof the prior mortgages, the purchasersMr. and Mrs. W, the purchasers W andL and their mortgagees (D Bank and EBank) would suffer no loss. Accord-ingly, these separate claims for com-pensation were denied.

Special Compensation Fund Com-mittee decision involving claims20035004, 20035005, 20035006

Decision date: June 9, 2004Report issued: September 1, 2004

Claimant: MPayment approved: $256,729.85($239,390.63 plus mortgage interest

and costs)

In May, 2003 Mr. Skagen acted for Mwho had agreed to sell his property inAbbotsford to N and W. The property

had two mortgages on title, one for$240,000 in favour of a trust companyand one for $32,000 in favour of H Cor-poration.

Mr. Skagen gave an undertaking to thenotary representing the purchasers (Nand W) that, upon receipt of funds inthe transaction, he would pay out anddischarge the two mortgages from ti-tle. He used some of the funds to payout the H Corporation mortgage anddischarge it but, contrary to his under-taking, he failed to use the funds to payout the trust company mortgage.

In October, 2003, the trust company’ssolicitors demanded payment fromthe vendor M, and also from the pur-chasers, N and W. The trust companysubsequently began a foreclosure ac-tion. An order nisi of foreclosure wasgranted on December 15, 2003, with anine-month redemption period.

The Special Compensation Fund Com-mittee found that, while not everybreach of undertaking is fraudulent,the circumstances of this case did notsuggest negligence or error, but an in-tention by to deceive by Mr. Skagenwho breached his undertaking to usethe trust funds forwarded to him in thereal estate transaction in the mannerhe had promised.

The Committee decided that it wouldnot require the claimants to exhausttheir civil remedies in this case by ob-taining a judgment against Mr.Skagen. In these circumstances, Mr.Skagen was no longer in practice.Moreover, both the innocent vendorand the innocent purchasers were be-ing pursued by the trust company onthe foreclosure action for funds thatMr. Skagen had undertaken to pay.

The Committee allowed the claim of Min the amount owing to the trust com-pany to pay out its mortgage, plusapplicable interest and costs on the or-der nisi of foreclosure. The paymentwas subject to conditions, assignmentsand releases. As a result of the pay-ment, and discharge of the trustcompany mortgage, the vendor M, the

purchasers N and W and the pur-chaser’s mortgagee (which shouldhold a first charge on the property)would all be placed in the positionsthat they had bargained for. The Com-mittee accordingly denied their sepa-rate claims for compensation.

Special Compensation Fund Com-mittee decision involving claim20000015

Decision date: September 29, 2004Report issued: November 16, 2004

Claimant: WPayment approved: $15,000

In August, 1998 Mr. MacDonald beganacting for W, a German citizen and thesole beneficiary of her sister’s estate inBC, in applying for an Order for Ad-ministration of the Estate, dealingwith assets and liabilities and distrib-uting the estate.

W contracted with Mr. MacDonald topay him 3.5% of the gross aggregatevalue of the estate for his legal servicesand to provide a $1,000 retainer fordisbursements on the proviso that Mr.MacDonald provide W with an in-voice before using money from thetrust account. Mr. MacDonald in factnever invoiced W for court disburse-ments prior to using money from thetrust account.

On December 18, 1998 Mr. MacDonaldwithdrew $5,000 from trust by chequefor deposit to his general account. Thetrust ledger for W indicated that thefunds were “to [the M estate] for pay-ment on account (advance on fees).”

On November 3, 1999 Mr. MacDonaldwithdrew a further $10,000 from trustby cheque for deposit to his general ac-count. The cheque included a note

Arthur SkagenSurrey, BCCalled to the bar: May 18, 1989Gave an undertaking not to practice:September 1, 2003Ceased membership for non-paymentof fees: January 1, 2004For a summary of Mr. Skagen’sdiscipline admission, see the MayDiscipline Digest.

Mark Edward MacDonaldVancouver, BCCalled to the bar: September 2, 1994Ceased membership for non-paymentof fees: January 1, 2001

Special Fund claims … from page 21


Regulatory

stating “advance on fees – W.”

On January 18, 2000, in a state of emo-tional crisis, Mr. MacDonald wrote anote indicating that he would stealfunds from the M estate, leave thecountry and commit suicide. Thatsame day he withdrew $50,000 fromhis trust account, a cheque payable tohimself that stated “W – A/C#1.”

Mr. MacDonald’s note was discoveredby a friend on January 21, 2000. Thatsame day, the Law Society was ad-vised that Mr. MacDonald was in astate of emotional crisis and had indi-cated he intended to steal funds. TheSociety commenced an investigation,which led to the discovery of the$50,000 misappropriation. Mr. Mac-Donald was cited and suspended onJanuary 25, 2000, pending his hearing,

and the BC Supreme Court appointeda custodian of his practice on applica-tion by the Society on January 26, 2000.

Mr. MacDonald, who had left Vancou-ver, returned on January 27, 2000. Mr.MacDonald admitted to misappropri-ating the sum of $50,000 from the M es-tate. He deposited the $50,000 to theestate trust account, thereby makingrestitution of the sum he had misap-propriated.

W retained new lawyers to completethe estate administration and they al-leged that Mr. MacDonald had misap-propriated the $15,000 from trust.

The Committee considered it relevantthat Mr. MacDonald admitted to mis-appropriating $50,000 from the M es-tate. They found that he withdrew the

$15,000 in contravention of his con-tract with W and without renderingaccounts or providing any time re-cords to support these accounts.

The Committee considered whetherMr. MacDonald’s actions in with-drawing the $15,000.00 amounted tonegligence, as distinct from fraud, andfurther whether the claim was moreproperly characterized as a fee dis-pute. The Committee concluded that itcould not credibly be claimed that the$15,000 was paid by Mr. MacDonaldto himself in connection with the pro-vision of legal services.

The Committee concluded that W’sclaim should be allowed, without in-terest and subject to W executing a re-lease and an assignment of her claimagainst Mr. MacDonald.�

Ceased membersA list of BC lawyers who ceased mem-bership during 2004 and have notsince been reinstated (as of April 18,2005) is posted in the Publications &Forms /Notices section of the Law So-ciety website at www.lawsociety.bc.ca.

The notice lists those BC lawyers whohave ceased Law Society membershipby voluntarily electing not to renewfor 2005, those who have been ap-pointed to the Bench and those whohave passed away.

Lawyers can reinstate or cease mem-bership throughout the year. Up-to-date information on the membershipstatus of any BC lawyer can be con-firmed through the BC LawyerLookup on the Society’s website.�

of Law Societies and other continu-ing legal education providers,

� in-house legal education programsoffered to employees by law firmsand in-house legal departments,

� telephone programs, such as tele-seminars,

� interactive online programs, suchas those of the CLE Society of BC,

� video replay programs in an orga-nized group setting,

� organized education discussiongroups, such as at CBA sectionmeetings,

� participation in a post-LL.B. de-gree program, and

� preparation for and teaching inPLTC, continuing professional ed-ucation programs and law schoolprograms.

Reported hours of self-study are ex-pected to include hours a lawyer hasspent in the study of legal material inthe following media:

� print material (such as publica-tions of continuing legal educationproviders, legal texts, case law andarticles in the Advocate, Law Soci-ety publications, Canadian Bar Re-view, BarTalk and other legaljournals),

� internet material, including online

versions of the publications notedabove,

� CD-ROM,

� videotape (other than in an orga-nized group setting), and

� audiotape.

As noted, lawyers will receive moreinformation on the filing of their An-nual Practice Declaration in advanceof their next filing deadline.

If you have any questions about re-porting on professional developmentactivit ies, please contact AlanTreleaven, Director of Education andPractice, at [email protected] or 604605-5354 (toll-free within BC 1-800-903-5300).�

Professional development … from page19

Contact

ELECTED BENCHERS

PresidentRalston S. Alexander, QC*

First Vice-PresidentRobert W. McDiarmid, QC*

Second Vice-PresidentAnna K. Fung, QC*

* * *Joost Blom, QCRobert C. Brun, QCIan Donaldson, QCCarol W. HickmanGavin H.G. Hume, QCJohn J.L. Hunter, QC*William JacksonTerence E. La Liberté, QCBruce A. LeRoseDarrell J. O’Byrne, QCMargaret Ostrowski, QCGregory M. RideoutG. Glen Ridgway, QCPatricia L. Schmit, QCDirk J. Sigalet, QCGrant C. Taylor, QCRoss D. TunnicliffeGordon Turriff, QC*Arthur E. Vertlieb, QCJames D. Vilvang, QCAnne K. Wallace, QC*David A. Zacks, QC

LAY BENCHERS

Michael J. Falkins*Patrick KellyPatrick NagleJune PrestonLilian ToDr. Maelor Vallance

EX OFFICIO BENCHER

Attorney GeneralGeoff Plant, QC

LIFE BENCHERS

R. Paul Beckmann, QCHoward R. Berge, QCP. Michael Bolton, QCRobert W. Bonner, QCDarrell T.B. Braidwood, QCMr. Justice Thomas R. BraidwoodCecil O.D. Branson, QCTrudi L. Brown, QCMr. Justice Grant D. BurnyeatA. Brian B. Carrothers, QCMr. Justice Bruce I. CohenRobert M. Dick, QCRobert D. Diebolt, QCUjjal Dosanjh, QCLeonard T. Doust, QCJack L.T. Edwards, QCWilliam M. Everett, QCRichard C. Gibbs, QCRobert W. Gourlay, QCDr. James J. Gow, QCArthur M. Harper, QCJohn M. Hogg, QCH. Allan Hope, QCAnn HowardMr. Justice Robert T.C. JohnstonGerald J. Kambeitz, QCMaster Peter J. KeighleyPeter Leask, QCGerald J. Lecovin, QCHugh P. Legg, QCCharles C. Locke, QCJames M. MacIntyre, QCRichard S. Margetts, QCMarjorie MartinAllan D. McEachernMeredith M. McFarlane, QCLloyd G. McKenzie, QCBrian W.F. McLoughlin, QCColin D. McQuarrie, QCKenneth E. MeredithPeter J. Millward, QCDennis J. Mitchell, QCKaren F. Nordlinger, QCRichard C.C. Peck, QC

Emily M. Reid, QCNorman Severide, QCJane S. Shackell, QCDonald A. Silversides, QCGary L.F. Somers, QCMadam Justice Mary F. SouthinMarvin R.V. Storrow, QCWilliam J. Sullivan, QCG. Ronald Toews, QCRussell S. Tretiak, QCBenjamin B. Trevino, QCWilliam M. Trotter, QCAlan E. Vanderburgh, QCBrian J. Wallace, QCKarl F. Warner, QCWarren T. Wilson, QC

MANAGEMENT BOARD

Acting Executive DirectorSholto Hebenton, QC

* * *Stuart CameronDirector, Professional RegulationSusan Forbes, QCDirector, Lawyers Insurance FundJeffrey HoskinsDirector, Policy and Legal Services/General CounselNeil StajkowskiChief Financial OfficerAlan TreleavenDirector, Education and PracticeAdam WhitcombeChief Information Officer

845 Cambie StreetVancouver, BCCanada V6B 4Z9

Telephone: 604 669-2533Toll-free within BC: 1-800-903-5300Telefax: 604 669-5232TTY: 604 443-5700Website: www.lawsociety.bc.ca

Lawyers Insurance FundTelephone: 604 682-8911Telefax: 604 682-5842

* Executive Committee

Documents

Publication: Benchers Bulletin, April-May 2005 · Practice Tips: Fighting back against fraud — the risks in real estate: page 15 Remember your professional development in 2005: