Clear and rigid rules are easiest to apply. For example, discipline panels would have an easier time if there was never a requirement to prove intent before making a finding of professional misconduct. It would also be easier if a registrant’s mental condition was relevant only to sanction and not to whether a finding of professional misconduct should be made, or if a registrant could not rely upon the legal advice they received when defending their actions. However, strict rules are also inflexible and can be unfair. As a result, courts increasingly require regulators to apply a contextual analysis, an expectation illustrated by British Columbia’s highest court in Gregory v. The Law Society of British Columbia, 2024 BCCA 350 (CanLII).
A lawyer was found to have engaged in professional misconduct for taking steps in court on behalf of a client who appeared to be using the lawyer to facilitate money laundering. The lawyer acknowledged that there were suspicious circumstances but argued that he was simply deferring his duty to make inquiries. The Court upheld the finding because the lawyer should not have advanced the litigation without first making those inquiries. For example, the lawyer filed an affidavit that, on cursory scrutiny, contained false information. The matter was returned to the regulator to assess the sanction that should be imposed.
The Court indicated that a contextual approach should be taken to determine whether the lawyer’s omission amounted to a “marked departure from expected practice”. Moral turpitude was not required. Some delay by the lawyer in making the necessary inquiries might be tolerated, but not where active steps were taken to advance the litigation as those steps could facilitate dishonesty and fraud. While the “marked departure” test was largely objective, some subjective elements (e.g., the lawyer’s understanding of the facts) were part of the context. The Court found that, even applying the contextual approach, the lawyer’s conduct was a “marked departure”.
The Court also agreed that, generally, mental health issues were primarily relevant to sanction. However, the Court said: “While circumstances where mental health issues are critical at the facts and determination phase may be rare, there will be cases in which they weigh heavily at that stage.” However, in this case the evidence did not establish that the lawyer was prevented to fulfill his professional obligations by their condition:
While it is true that the appellant was having a great deal of difficulty focussing on the file, the evidence did not suggest that his mental difficulties rendered him incapable of making reasonable inquiries, yet capable of advancing the file. In the circumstances, his priority had to be in making the inquiries and receiving satisfactory responses.
Similarly, the Court indicated that a lawyer’s reliance on legal advice can sometimes be considered in determining whether there was professional misconduct:
Again, it is important to recognize that a hearing panel must consider all of the circumstances before reaching a conclusion as to whether a lawyer’s practice falls markedly below professional norms. Particularly in the case of complex and specialized transactions, lawyers may have little choice but to rely on more specialized or experienced lawyers to guide them through parts of a transaction. It cannot be categorically stated that reliance on such advice will, in all cases, be a marked departure from acceptable practice, even if the underlying advice turns out to be quite wrong. The analogy to criminal and to quasi-criminal offences is incomplete, and, in my view, not particularly helpful.
However, in this case, there was no clear legal advice given to the lawyer that justified his continuing to advance the litigation without making the necessary inquiries.
Regulators should take a contextual approach when determining whether a registrant’s conduct falls below generally accepted standards of practice or otherwise constitutes professional misconduct.