Tuesday, July 16, 2019
The Law Society of British Columbia Hearing Panel rejected ignorance of ethical obligations as a defense to the rule violations of having the client (a now-deceased close friend of his mother) name him a beneficiary in her will and accepting gifts without independent advice
But the Respondent contends that these two breaches do not constitute professional misconduct. The crux of his argument is that, during the time period in question, he was unaware of the prohibitions in rules 3.4-39 and 3.4-38, which had only come into force as part of the new BC Code on January 1, 2013. He says that his actions would not have constituted professional misconduct under the rules previously in force, and that lawyers should be entitled to a reasonable amount of time to gain familiarity with new Law Society requirements.
For the reasons set out below, we do not accept the Respondent’s argument, and we conclude that the Law Society has met its onus of proving professional misconduct with respect to both of the allegations in the Citation.
He was admitted in 1991.
JB was born on July 10, 1929 and died on January 21, 2016. The Respondent’s mother was her very close friend for many years, and since childhood the Respondent and his sister had viewed JB as their aunt. JB attended their extracurricular events and supported their endeavours.
In late 2012, JB fell in her home. She was a large woman, weighing about 300 pounds, and the injuries from the fall reduced her mobility and resulted in her staying in Lions Gate Hospital in North Vancouver for a number of months, at which point she moved to a care centre in West Vancouver.
The Respondent did not learn of JB’s predicament until June 2013, when she called him expressing unhappiness with her situation at the care centre. He provided JB with a great deal of assistance in the months that followed, often to her benefit and enjoyment. During much of this period, the Respondent and his firm also acted as JB’s lawyer in a number of matters, including preparing a power of attorney, drafting a new will, representing her in a divorce and handling the conveyance of her house.
The offending will was drafted by a junior lawyer in his firm
while the Respondent discussed the conflict of interest issue with another lawyer, that other lawyer, Mr. de Vries, was a very junior associate who reported directly to the Respondent. The Respondent did not consult with the senior counsel at Sager LLP who was particularly experienced in estate matters, or with any other senior lawyer in the firm. Nor did he seek advice from a Law Society practice advisor, a bencher or a senior and respected colleague from another firm. It is worth adding that the Respondent raised the conflict issue with Mr. de Vries only after JB had arrived at the office to discuss the will, which would have placed some pressure on Mr. de Vries, as a junior lawyer, to agree to act for JB.
As to the gifts
We agree that the Respondent’s acceptance of the gift of $75,000 from JB in July 2014 breached rule 3.4-39. The gift was more than nominal, and JB was the Respondent’s client at the time. In fact, the gift was made on the same day as Sager LLP issued JB an account for fees and disbursements incurred in connection with the sale of the house, and the Respondent was still acting for JB regarding her divorce. JB did not receive independent legal advice before making this gift.
By contrast, the gift of $25,000 was made in December 2015, 13 months after the last account rendered to JB by Sager LLP, and 15 months after the last legal service provided to her by the Respondent or any member of his firm. The fact that the Respondent and members of his firm had provided various legal services to JB over a year before does not establish that they were still in a solicitor-client relationship when JB made her gift to the Respondent in December 2015. There is no evidence of a continuing retainer. The Respondent’s continued association with JB is explained by virtue of his relationship with her as a long-standing family friend whom he viewed as an aunt.
Given these circumstances, we find that the Law Society has not met its burden of establishing that JB was the Respondent’s client when the second gift was made. Accordingly, his acceptance of the gift from JB in December 2015 did not breach rule 3.4-39.
As to the claim of ignorance
for many years prior to the BC Code coming into force, the Canadian Bar Association Code of Professional Conduct (the “CBA Code”) has prohibited a lawyer from preparing an instrument giving a lawyer or associate a substantial gift from the client, including a testamentary gift (Chapter VI, Conflict of Interest Between Lawyer and Client). While never governing the conduct of lawyers in this province, until recently the CBA Code was often looked to by lawyers for additional guidance on ethical matters. The long-standing CBA Code provision addressing testamentary gifts to a lawyer is therefore some indication that rule 3.4-38 of the BC Code, which is similar in nature albeit not exactly the same, did not create an ethical obligation that was previously completely alien to lawyers in this province. In the same vein, see our comments at paragraph 151 below, as well as Lawyers and Ethics: Professional Responsibility and Discipline, §22.3, as it read in 2012, at p. 22-13 (now p. 22-11), noting that lawyers who have drafted wills in which the lawyer is named as beneficiary without at least insisting that the client obtain independent legal advice have been found guilty of professional misconduct (citing unreported Ontario disciplinary decisions from 1985 and 1991)
And becoming a beneficiary
the seriousness of the conflict that arises when a lawyer is asked to prepare a will in which the lawyer is to receive a substantial benefit is patently obvious. The lawyer is in a fiduciary relationship with the client and must be unremittingly loyal to the client’s best interests (rule 3.4-1, Commentary 5, BC Code; R. v. Neil, 2002 SCC 70 (CanLII),  3 SCR 631 at paras. 16, 25-26). This duty of loyalty is necessarily threatened where a lawyer is to be a beneficiary in a will that the lawyer is tasked with preparing for the client. There is a real possibility that the lawyer’s duty to act as the client’s loyal adviser will be negatively impacted by the lawyer’s own interest in obtaining a benefit under the will. This concern is particularly acute where the client is elderly and infirm, and thus vulnerable, which we find as a fact was the case with JB. Even where the lawyer does not act improperly, the mere spectre of undue influence may cause harm to the client’s best interests by triggering a challenge to the will or causing disharmony in the client’s family. The risk of such harm is particularly acute where the introduction of the lawyer as beneficiary concomitantly works to reduce or eliminate the share of the estate left to other family members under a previous will.
The findings and conclusions do not designate the sanction, which presumably will be addressed in a subsequent order. (Mike Frisch)