Most regulators require applicants for registration to be candid and accurate in their communications. Most regulators also require applicants to demonstrate some form of good character. Also, most regulators will impose consequences where it appears that a candidate on a registration exam may have received inappropriate assistance. However, it is not always clear what procedure should be applied by the regulator where the expectation of accuracy and candidness appear not to have been met.
Thus Mirza et al. v. Law Society of Ontario, 2023 ONSC 6727 (CanLII), will be of significant interest. In that case the regulator discovered that the integrity of some of its exams were compromised. It learned that a tutoring agency had obtained copies of the exams and obtained four answer sheets that appeared to have been in circulation through this agency. The regulator retained a data forensic expert who reported that there were anomalies in about 10% of the exam results strongly suggesting access to the answer sheets.
The regulator voided the exam results for those candidates with significant anomalies, removed their applications from the registration process, prevented them from re-applying for a year, indicated that if they did re-apply they would be facing scrutiny under the good character requirement, and notified other Canadian regulators of what had occurred. These measures were done administratively, without a hearing. Several of the candidates sought judicial review on the basis that the regulator’s actions were unreasonable and that a fair procedure had not been followed.
The Court held that voiding the exam results was reasonable because the regulator had clear evidence that the integrity of the exam was compromised. It was also reasonable for the regulator to only void the results for those candidates with marked statistical anomalies. The regulator could act in these circumstances even if it had no additional evidence of “cheating”. In light of the public interest at stake, relying solely upon accurate exam results to void exam results did not require a hearing.
However, the Court concluded that the other sanctions imposed on the applicants required more procedural fairness than had been offered. In the circumstances, even though the regulator had made no formal finding of cheating or a lack of good character, it was relying on analogous grounds, such as the applicants making a “false or misleading representation or declaration” respecting their application. The communications from the regulator and its actions amounted to a determination with serious consequences for the individuals. As a result of the actions, some candidates would have to repeat their experiential training (e.g., articling or a law practice program). The regulator took the position that the candidates’ involvement in the examination anomalies would be investigated if they re-applied for licensure. The Court said that they would suffer “a permanent stain on their reputation”. As noted, the regulator had made disclosure of the matter to other regulators. The Court also relied, in part, on the specific provisions in the regulator’s enabling legislation and the communications made by the regulator throughout the process to find that it raised legitimate expectations that a hearing would be provided before action was taken.
The Court set aside the sanctions (other than voiding the exam results) and sent a strong message that the regulator needed to act promptly if it was going to proceed with good character hearings. The regulator was also required to tell the regulators to which it had disclosed information about the Court’s decision.
This decision offers some guidance as to when regulators can take unilateral administrative action in registration matters and when they must offer enhanced procedural protections before doing so.