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Law society’s role when lawyers breach court orders | David Latner

Tuesday, January 05, 2021 @ 11:35 AM | By ​​​​​​​David Latner

David Latner %>
David Latner
In March 2020 much of the court system, and the Family Responsibility Office (FRO) the government agency charged with enforcing court orders for support, substantially shut down, performing only urgent work and magnifying already long delays. With little risk of enforcement, some debtors simply stopped paying.

What role can the Law Society of Ontario (LSO) play when lawyers breach court orders or help others evade them?

Consider a hypothetical. X, a senior partner at a Bay Street law firm, is obliged by a court order to pay monthly spousal, and periodic child, support. When the courts and FRO largely shut down, X immediately stopped paying and has paid nothing since. As a litigator, he is well aware that there will be no effective enforcement by FRO or the courts for years to come.    

X may be diverting his income (to a professional corporation or otherwise,) so he can claim he personally has no income. His firm might not care to whom it pays “his” compensation, so long as X generates sufficient income for the firm. It may think he is just (legally) deferring tax or income splitting. But if the firm suspected the income diversion was facilitating violation of a court order, could the LSO discipline the managing partner?

Consider the defaulting lawyer and the firm in turn.

The LSO has the ability — and obligation — to regulate the profession, in our professional and personal lives, if our behaviour brings the administration of justice into disrepute. It has disciplined lawyers for “conduct unbecoming” for hiding assets from creditors, supplying heroin to a friend, filching money as an executor of a sister’s estate and ignoring court orders (to pay damages to the estate), arranging financial affairs to avoid paying a civil judgment, and, in a recent Saskatchewan court of appeal decision, the Law Society of Saskatchewan disciplined a lawyer both for directly breaching a court order, and for counselling and/or assisting someone to evade an order, even though the advice and implementation assistance (a loan) would have otherwise been legal, absent the court order.

Additionally, all lawyers have a duty of candour, requiring us to use honest, legal tactics and to act with integrity. Lawyers have been sued or disciplined for misleading courts on evidentiary issues and for knowingly letting a court operate on a mistaken assumption.

If an FRO clerk asks the law firm if X is getting paid, and the law firm says “no,” knowing that X would be getting compensation, had X not arranged his affairs to divert income; e.g., to a  professional corporation or another lawyer, would that technically correct “no” violate the duty of candour? Would the FRO phone call be enough to put the firm on notice that X was in breach of a court order?

The LSO’s goal is to ensure the administration of justice is not brought into disrepute. Disrepute occurs not only when lawyers behave unethically at work, but also if they are unethical in their personal lives. Ultimately, if people see a lawyer flouting a court order for support (or otherwise), without suffering any consequence, why wouldn’t those people suspect the “justice” system was rigged against them? 

A lawyer may advise a client on how to minimize tax but cannot counsel tax evasion, fraudulent preference schemes or evasion of court orders. A fortiori, a lawyer subject to a court order, in his personal life, cannot do what he could not counsel others to do: breach (and repeatedly breach a court order). Breach of a court order is a strict liability offence justifying LSO discipline. Strict adherence to a court order is central to a lawyer’s ethical conduct.

Compounding the breach by arranging one’s affairs to evade the order would be a separate reason to discipline.

As to X’s firm, if the firm knew (or should have known) the arrangements in which it was participating would likely be used by X to facilitate his breach of a court order, then it is facilitating a breach, and the managing partner should be subject to discipline. Once put on actual notice that X is in breach, and that the “arrangements” (income diversion from X to his professional corporation or spouse) may be facilitating that breach, it should refuse to permit the funds to be diverted.  

Public trust depends upon the LSO disciplining unethical lawyers. Discipline must be public, substantive and applied whenever miscreants are found, lest the public believes that most breaching lawyers go unpunished. (That is, that the LSO’s promise to discipline breaching lawyers, is honoured more in the breach than in the observance.) To ensure the administration of justice is not brought into disrepute, a lawyer repeatedly flouting a court order, for personal benefit, should be subject to LSO discipline.  

While civil and criminal contempt and costs awards may apply to lawyers that don’t uphold their duty to the court, the recourse is rarely imposed by judges, diminishing their deterrent value, particularly where there are long delays. The LSO rules and disciplinary process can — and should — fill the vacuum left by the inadequate, and rarely applied, mechanisms of the judiciary and FRO, when a lawyer breaches a court order.

David Latner is a co-founder of Advocan Law LLP, a boutique focused on IT and medical technology, acting for startups, their founders and investors. You can reach him via LinkedIn.

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