Former Torys LLP attorneys Beth DeMerchant and Darren Sukonick are suing the Law Society of Upper Canada for damages totalling $22-million, alleging the regulatory body was malicious in its prosecution of these over alleged mistakes in their work for Hollinger Inc. over 15 years back.
Ms. DeMerchant and Mr. Sukonick faced a protracted Law Society hearing between 2010 and 2012, but were vindicated in a 2013 ruling that dismissed six counts of alleged conflict of interest against them. They have been accused of acting in a conflict of interest when advising Conrad Black’s Hollinger group on the sale of newspaper properties between 2000 and 2003.
The Law Society decided to the Law Society Tribunal Appeal Division, which dismissed the appeal in 2015. In January, 2017, the appeal division increased the costs awarded to the two attorneys from a total of $500,000 to $1.3-million to cover their legal fees.
The attorneys, both of whom have since retired, filed a lawsuit this week against the Law Society, seeking general and special damages of $21-million and further aggravated and punitive damages of $1-million.
The lawsuit alleges the Law Society knew it did not have enough evidence to prosecute the group after conducting an investigation, but pushed forward in part due to public criticism that the company had not disciplined any attorneys over controversial Hollinger company transactions.
The attorneys also allege there was “no reliable evidence on issues crucial to some conflict-of-interest prosecution” presented in their hearing, and that the Law Society “simply had no signs of its conflict-of-interest allegations.”
Additionally, it complains that a statement issued by the Law Society after its loss from the case in 2013 was defamatory because it indicated that they were, in reality, guilty and the tribunal judgment was incorrect. In the announcement, the regulator said it was disappointed with the decision and it had initiated the proceeding after “a thorough investigation” into issues about a breach of the principles of professional conduct.
Law Society spokeswoman Susan Tonkin said the organization just got the lawsuit on Tuesday and is now reviewing it. It’s not yet filed its defence in the case.
Both the first ruling and the appeal judgment in the event concluded that the prosecution was originally justified, but the situation should have been reassessed and shut down early after the attorneys’ expert witnesses gave evidence that the Law Society couldn’t contradict.
Courts have generally ruled that defendants in legal proceedings can’t sue regulatory bodies and tribunals for prosecuting them in good faith, even if the prosecution doesn’t succeed and the accused are cleared. However, some cases have succeeded if there’s evidence of negligence or wrongdoing by prosecutors.
The Supreme Court of Canada ruled in 2004, as an instance, the Barreau du Québec, which regulates lawyers in that state, failed to act appropriately in a disciplinary situation for decades despite several complaints about a attorney. The top court said the “virtually complete lack of this diligence called for in the situation” amounted to “gross carelessness and severe negligence.”
Courtesy: The Globe And Mail