Mistakes vs. Misconduct

It is generally accepted that not all mistakes by practitioners constitute professional misconduct. Sometimes drawing that line is difficult. In other cases it is relatively easy. In Strother v Law Society of British Columbia, 2018 BCCA 481, http://canlii.ca/t/hwqtx, a lawyer advised Client A that their business model was no longer possible under income tax law. Client A wound down the business as a result of the lawyer’s advice. Later Client B (a competitor of Client A) pointed out to the lawyer another approach that might make the business model feasible. The lawyer changed his opinion and went into business with Client B. Client A was not informed of either the change of opinion or of the lawyer’s participating in a competitor’s business.

The lawyer argued that he was honestly of the view that his fiduciary obligations to Client A had ended and that this mistake should not constitute professional misconduct. The lawyer suggested the line between mistakes and misconduct should be articulated as follows:

… professional misconduct is conduct that no reasonable and well-informed lawyer acting with care and deliberation would fail to recognize as wrong; that is, conduct on which there could be no serious dispute among reasonable and well-informed lawyers that it was a breach of professional obligations.

The Court indicated that this formulation was too restrictive. The Court described the actual test as follows:

However, in my view, it is important to state with clarity the accepted test for professional misconduct. The test is that articulated by the Law Society in Martin and Lawyer 12: a hearing panel will consider whether the lawyer’s conduct was a marked departure from the conduct expected of lawyers. Put another way, the lawyer’s conduct must display culpability of a gross or aggravated nature, rather than a mere failure to exercise ordinary care. While I agree with Mr. Strother that not every breach of professional obligations constitutes professional misconduct, the operationalized definition he proposes adds a different focus.

The Court also said that comments by judges in a civil case as to whether the conduct of the lawyer was unlawful were irrelevant to the issue of whether his conduct was unethical or unprofessional.

Given the finding of the hearing panel that the lawyer had failed to make disclosure to Client A because of his own financial interests, the finding that the lawyer had a conflict of interest was upheld. So was the five month suspension order.

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