Tuesday, November 7, 2017

No Joke

A paralegal license was revoked by the Law Society of Upper Canada Tribunal Hearing Division 

 Mr. Lee misappropriated $31,000 from trust funds. There was no mistake or accounting error. He used a client’s trust funds for office expenses and to pay himself. He has not paid the money back to the client. Mr. Lee does not accept that his actions constitute misappropriation but he recognized that the panel has made the finding after hearing considerable evidence.

 There are no exceptional circumstances. Mr. Lee blames his training. He submitted that paralegals should not be held to the same standards as lawyers in respect of trust account infractions because paralegal education does not include information and teaching on trusts or trust account obligations. He maintained that paralegals are members of a new profession and that the entrance requirements for the paralegal program are a joke.

We do not accept that proposition. Whether or not trust account obligations are specifically taught at the colleges where they pursue legal studies, paralegals know they must comply with the Paralegal Rules of Conduct and with the By-Laws under the Law Society Act, RSO 1990, c. L.8, which set out requirements for handling trust and client monies. Paralegals are legal professionals. Clients must be able to count on paralegals to handle monies entrusted to them with complete honesty. Integrity is essential to the privilege of providing legal services to the public and to the privilege of calling oneself a paralegal licensed by the Law Society of Upper Canada.

Mr. Lee blamed his lawyer partner, Mr. Freeman. He said that the trust account was the law firm’s account, not his, and that the lawyer should be the one responsible for its operational deficiencies. We disagree. Those are not the rules nor should they be the rules. If paralegals are to provide legal services to the public, they need to be authorized to hold clients’ monies as retainers or for payments to others. Further those are not the facts. It was Mr. Lee who was the managing partner and who handled the trust account. He cannot blame his partner for actions that squarely fell within his duties within the firm.

 Mr. Lee also blames the Law Society for his lack of educational training, and its lack of oversight and audits. He said that he never understood the principles of trust and that many paralegals do not understand trust funds. With this submission, Mr. Lee disrespects his many paralegal colleagues who run their practices with honesty and integrity and in accordance with the rules.

Mr. Lee takes no responsibility for taking his client’s money and using it for purposes other than those she specified. He said that he did not understand it was trust money. He says that she did not have clean hands, which has no basis in the evidence. He blames the Law Society for not auditing his firm to ensure that it was following the rules. In making these submissions, Mr. Lee demonstrates that he cannot be trusted to serve the public as an honest and trustworthy paralegal.

None of the factors on which Mr. Lee relies constitutes an exceptional circumstance that would justify a departure from the presumptive penalty of revocation in cases involving misappropriation.


The Law Society submitted a bill of costs including fees, as set out in the tariff, and disbursement for $125,913.27. This includes costs for the interlocutory motion resulting in a suspension of Mr. Lee’s licence that preceded this hearing. The Law Society is seeking costs of $103,143.27, payable within two years. Reduced costs are being sought on account of the transfer of the file after the interlocutory motion and in recognition of there being two counsel at the hearing on the merits.

Mr. Lee did not dispute time spent or the discount for duplication. He submitted, however, that paralegals should be used to prosecute paralegals and that if lawyers perform that function, they should be charged at paralegal rates rather than at the tariff rate for lawyers. The Law Society uses paralegals to prosecute lawyers and lawyers to prosecute paralegals depending on the complexity of the case and internal considerations. As set out below, we have concluded that this matter was reasonably complex. We cannot say that the Law Society’s decision to use a lawyer was unreasonable in the circumstances.

The Law Society proved all of its allegations and is entitled to costs. The only issue is the amount. There are a number of factors to consider including the amount of money at issue, the complexity of the matter and importance of the issues, the duration of the hearing, conduct that would increase or decrease the time for the hearing and whether any steps were improper.

The proceeding against Mr. Lee involved misappropriated funds of over $30,000. It was reasonably complex in that it involved allegations with respect to a number of clients. The Law Society submits that the complexity of the matter was increased by the need for both Somali and Mandarin interpreters for four witnesses involved in the proceeding. We accept this as true. It takes more time to elicit evidence through a translator than directly and there are costs to hire a translator. Mr. Lee argues that, translation services are necessary to eliminate barriers in a diverse society and that the costs associated with them should be borne by the Law Society rather than the licensee. We agree with Mr. Lee and have adjusted costs accordingly.

The allegations were serious. They included dishonesty, incivility with clients and other counsel and lack of loyalty to clients. The hearing lasted 10 days including penalty submissions. The Law Society submitted a Request to Admit and ultimately proved most, if not all, of the facts in it. Mr. Lee denied many facts that the Law Society ultimately proved.

The Law Society submitted evidence by affidavit and produced witnesses for cross-examination, which was efficient. Mr. Lee’s cross-examination of witnesses was mostly ineffectual or unnecessary. He was repeatedly warned to limit his cross-examination to relevant considerations. He was often repetitive with his questions to no effect. Although he had been cautioned during his cross-examination that he must put contradictory facts to the witnesses if he wished to lead different evidence than they were giving, Mr. Lee repeatedly tried to testify to his version of events without having given witnesses a chance to respond. He also called a witness who added nothing to his defence. This witness was allowed to testify by telephone because she felt Mr. Lee had threatened her.

(Mike Frisch)


Bar Discipline & Process | Permalink


Post a comment