Can a regulator be liable for damages for imposing an interim suspension in good faith where the concerns/allegations are later withdrawn? In Gillis v Law Society of NB et al, 2017 NBQB 212 the Court said no. Mr. Gillis was found guilty of a criminal offence. Despite his intention to appeal the criminal conviction, the regulator referred him to discipline and ordered an interim suspension pending the hearing. Afterwards the criminal conviction was set aside and a new trial was ordered. The regulator then withdrew the interim suspension as well as the referral to discipline. Mr. Gillis sued the Law Society for damages.
The Court dismissed the action for two reasons. First, Mr. Gillis did not commence the action within the two-year limitation period. Second, Mr. Gillis did not establish that the actions of the regulator were taken in bad faith (there being statutory immunity for actions taken in good faith). The Court said:
I find there was no evidence to support the argument that either Ms. MacLean or Mr. Richard [representatives of the regulator] acted in anything but good faith. There was no evidence before this Court that would support a conclusion that they had ulterior motives, or that their conduct was unlawful, or that their conduct was willful. There was no evidence that either Ms. MacLean or Mr. Richard were either careless or reckless in their behaviour. In fact, they approached this with an abundance of caution. Counsel for the defendants argued that the Law Society acted as the regulator and moved to sanction as the Act required it to do so. I agree.