Courts have repeatedly indicated that guidelines can assist regulators when they are exercising discretion. Guidelines can ensure that decision-makers are reminded of the considerations that should go into the decision so as to facilitate consistent (and therefore, less arbitrary) decisions. However, in Aubin v. Law Society of Ontario, 2026 ONSC 4377 (CanLII) the Court identified three ways in which the use of guidelines can go awry.
A lawyer sexually harassed a vulnerable client and attempted to extort sexual favours from her in exchange for legal services. When she reported him to the Law Society, he publicly defamed her and threatened to kill her. The conduct resulted in a criminal conviction (with a four-year prison sentence) and a civil judgment in favour of the client for approximately $200,000. When the client could not collect on the judgment, the client sought compensation from the regulator’s compensation fund. The regulator refused compensation on the basis that the claim was outside of the parameters of the guidelines it had established.
The legislation provided the regulator with extremely broad discretion as to when payment would be made from the fund. The breadth of this discretion highlighted the need for guidelines. In fact, the Court acknowledged the value of guidelines to assist in making compensation awards. However, in this matter, the regulator had “fettered its discretion”. The Court said that “a decision-maker cannot abdicate a statutorily-imposed responsibility to exercise its discretion to guidelines or policies that do not have the force of law….”
First, while the guidelines did state in its preamble that it was not binding on the committee, the remainder of the document used inappropriately mandatory language. For example, it “defined” the loss for which compensation was available “to losses of money paid by the claimant to the lawyer which are not earned, accounted for or returned to the client.” That description is narrower than what was permitted by the legislation.
Second, the language of the committee’s decision and reasons indicated that it treated the guidelines as binding. The committee’s use of language included a statement that compensation was “governed” by the guidelines and that it did not have “jurisdiction” to make the requested award.
Third, the committee did not address the factors available under the legislation that would support an award: “Such factors could (but do not have to) include the egregiousness of the lawyer’s dishonest conduct, the causal connection between the misconduct and the loss, the extent to which the loss was connected to the lawyer’s professional business, and the Law Society’s duty, pursuant to s. 4.2 of the LSA, to “advance the cause of justice” and “protect the public interest” ….” This defeated the purpose of developing a guideline to facilitate consideration of all relevant factors.
This fettering of discretion made the decision unreasonable. The matter was returned for a new decision in accordance with the Court’s direction.
This decision will assist regulators in developing and applying guidelines appropriately.
