Megan Shortreed, chair of the Professional Regulation Committee, presented a joint report from her committee and the Paralegal Standing Committee requesting Convocation adopt amendments to the Rules of Professional Conduct.
“The amendments are required as result of amendments to the province’s contingency fee regime, which came into force on January 1st of this year,” she said, noting that the new requirements put into effect with respect to the contingency fee arrangements last July were “based on reforms recommended by the Professional Regulation of Paralegal Standing Committees and ultimately approved by Convocation in October of 2020.”
Professional Regulation Committee chair Megan Shortreed
Shortreed noted that “following the launch of the new requirements in July, some licensees raised concerns that the law society did not hear during the consultations about the standard form contingency fee agreement.”
“The concerns were that it [the form] did not provide options that reflect their practice area or specific fee arrangements. The law society, in turn, raised these concerns with the Ministry of the Attorney General. At the same time, the Ontario Bar Association [OBA] recommended a full exemption from a regulations requirement for clients that are organizations as defined in the regulation,” she said, adding that the OBA had noted “the requirements can’t be operationalized, [it] added costs and provided no measure of consumer protection.”
As a result, Shortreed explained, “the government has now amended the regulation. In addition, the standard form agreement which is incorporated into the regulation, was amended to provide more flexibility and options for licensees.”
She noted that these “legislative changes came into force on January 1st” and the “new amendments streamlined the regime and target the requirements while maintaining enhanced consumer protection and improved transparency and fairness for clients.”
Shortreed said that “for the most part, the changes to the regulation of the standard form agreement do not impact the requirements in the Rules of Conduct, which relate primarily to establishing transparency in billing and marketing.”
“Therefore, significant amendments to the rules are not required. Rather the report only recommends minor amendments to address the new requirements in respect of organizational clients, specifically in instances where the client is an organizational client, which is defined using the same definition now as the regulation,” she explained.
“The proposed amendments remove the requirement under the rules to include certain prescribed information in the client’s bill, to provide the client with contingency fee consumer guide, and to disclose information about the licensees’ maximum contingency fee charge. The commentary to the lawyer rules is also amended to include a new paragraph, which clarifies that unless a lawyer markets legal services exclusively to organizational clients as defined by the rules, they must still comply with the marketing requirements to disclose their maximum contingency fee charge. The Paralegal Professional Conduct Guidelines were also amended by the Paralegal Standing Committee to include a similar clarification for paralegals,” she added.
Bencher Jared Brown said that benchers “who opposed the original motion that came up in October 2020, and was approved by Convocation, did so because we foresaw the possibility of legislating that people will understand the contracts that they sign and that they will agree to be bound by them.”
“No matter what we do to re-write Contract Law 101 the issues in this space will continue. While I applaud the attempts to clarify on what basis a contingency fee is calculated, we know these problems are not going to go away,” he said, noting that “perhaps this endeavour will allow us to finally put to rest something that comes up time and again at Convocation and that is the idea that we must follow the recommendations of our committees, that our committees get things right, that we should defer to our committee structure on any issue that’s brought forward.”
“Clearly this committee did not foresee the thunder that came from the Bay Street law firms after passing the contingency fee changes in October 2020. Let’s not mince words here, Bay Street people were pissed because they do charge contingency fees and somehow this committee neglected to realize [the] impacts on those businesses, those law firms,” he added.
“I applaud that we’re revisiting this issue. I think this is an example of how good governance should proceed, but let’s not fool ourselves. The committees are not sacrosanct, they get things wrong once in a while, they don’t see all and that is why the Convocation is here to provide… sober second thought,” he concluded.
Shortreed clarified that “the rewriting of the standard form contingency fee agreement” was “an action by the Ontario government.”
Convocation passed the motion to adopt amendments to the rules with a majority vote.
Julia Shin Doi, chair of the Tribunal Committee, presented the motion “to approve amending the Law Society Tribunal Rules of Practice and Procedure, by adding Rule 21 – Failure to Co-operate and related Forms…”
Tribunal Committee chair Julia Shin Doi
“The mischief addressed by summary hearings is, in the vast majority of cases, a failure to comply with investigations. At issue is the goal of encouraging compliance with professional obligations so that investigations can be completed while at the same time not stigmatizing and penalizing the conduct that is not professional misconduct,” she explained, noting that the committee considered whether the tribunal and resources “ought to continue to be spent on oral hearings given that the results are highly predictable, and the penalty imposed is formulaic.”
“In addition, written reasons in these cases typically add little to the jurisprudence,” she said.
Shin Doi noted that “the importance of professional accountability cannot be overstated.”
“The public maintains its confidence in self-regulation when self-regulation is itself taken seriously, when its mechanisms are effective and efficient and, we would suggest, proportionate to the activities in the desired outcomes,” she explained.
“Failure to cooperate proceedings come about as a means of ensuring licensees comply with their obligations to respond to enquiries from the regulator. The proceedings stress the importance of that obligation, but there can be many reasons why a licensee has not promptly and completely provided requested information and documents. Sometimes it’s not possible to do so, sometimes the licensee’s circumstances have made it difficult to comply. Mental health or substance use can sometimes be a factor,” she added.
Shin Doi noted that “following authorization by the Proceedings Authorization Committee and the filing of a notice of obligation by the law society, most failure to cooperate cases proceed by way of summary hearing.”
She explained that “approximately two-thirds of these summary hearings appear to have been first time applications in which the standard penalty orders are made.”
“The tribunal chair and the Tribunal Committee agree that maintaining the status quo is not optimal. Holding oral hearings when an oral hearing may not be necessary is costly. Commencing a full hearing before the tribunal provides no incentive to the licensee to comply with the request before the eve of the hearing. Once the notice of obligation has been filed, whether the licensee complies that day or the day before the hearing, nothing about the hearing changes,” she said, noting that “complying before the notice is filed, however, makes a significant difference.”
“Some licensees don’t understand their rights and obligations and the potential consequence of conduct proceedings. Providing more support in this regard is desirable,” she added.
Shin Doi said there are “two key aspects” to the proposed rule.”
“First, parties must file their summary affidavits which are used by [the] tribunal to determine whether a written or oral hearing should be held. Two, the rule encourages cooperation and reduced cost by setting out a sliding scale of consequences depending on the nature and timing of compliance with the request for information,” she explained.
She also noted that “this rule is proposed in the context of a broader initiative with the tribunal and duty counsel where duty counsel will be able to provide earlier assistance to licensees at risk of facing a failure to cooperate application.”
“Licensees will be told about their rights and obligations and potential consequences of the action. And that early involvement will also assist in identifying issues that require mental health or substance use supports,” she added.
The motion was passed with a majority vote.
Treasurer Teresa Donnelly alerted Convocation to a Metrolinx plan to establish “the Ontario line, a 15-stop subway line that will run from Exhibition Place through downtown Toronto to the Ontario Science Centre.”
Metrolinx, the Ontario government’s transportation agency, is planning “construction of a new Osgoode station,” she noted, which will “result in impacts to the green space and property at Osgoode Hall as the subway station entrance is planned to be built on the southwest corner of the property.”
“Metrolinx has released an environmental impact assessment and we will continue to update you about this,” she added.
Donnelly also noted that “the law society has been looking at the issue of additional legal service supports in family law for some time.”
“This is a complex issue involving the regulatory obligation to protect the public balanced with the need for more flexible legal service options in support of family law client needs,” she said.
Donnelly explained that the LSO released the “Access to Justice Committee report publicly on family legal service provider license” is January and received “valuable input from various stakeholders and this feedback requires further consideration.”
“As a result, that report is not, as you know, on our agenda today and I’ll be considering next steps on how to move the access to legal services forward in this important area in a way that’s realistic and achievable,” she added.
At the start of the meeting benchers Philip Horgan, John Fagan and Gerard Charette tried to address an in-camera item publicly, requesting the treasurer move an issue for discussion to the public portion of the meeting. However, Donnelly maintained that the issue must remain in-camera and returned Convocation’s attention to the publicly listed items for discussion.
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