Some (Unintended?) Implications of the New Rules of Professional Conduct for Environmental Lawyers Ian Richler Gowling Lafleur Henderson LLP

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1 Some (Unintended?) Implications of the New Rules of Professional Conduct for Environmental Lawyers Ian Richler Gowling Lafleur Henderson LLP Prepared for the Ontario Bar Association Institute February 4, 2015 This is an updated and expanded version of an article called Law Society Tells Lawyers: Stop Snitching that was published on the OBA Environmental Law Section website on October 22, 2014

2 Some (Unintended?) Implications of the New Rules of Professional Conduct for Environmental Lawyers Ian Richler (Gowling Lafleur Henderson LLP) Let s say you re retained by a nice young couple whose home has been impacted by a spill at the gas station next door. Is it unethical to send a demand letter to the gas station saying, clean up my clients property or else I ll ask the Ministry of the Environment and Climate Change ( MOE ) to issue an order? Most environmental lawyers would probably say no. The tactic is not uncommon. And it is hard to see anything improper about it. If a lawyer believes approaching the MOE would be a more expedient way of getting the gas station to clean up the problem than launching an expensive and lengthy civil claim, why shouldn t the lawyer be free to write the demand letter? Alas, recent amendments to the Law Society of Upper Canada s Rules of Professional Conduct should make us all think hard about whether that intuition is correct. On October 1, 2014 the new Rules of Professional Conduct came into force. The new rules largely adopt the most recent Model Code of Professional Conduct developed by the Federation of Law Societies of Canada. The former rule against threatening criminal or quasi-criminal proceedings to gain a benefit for a client has been broadened. Now threatening to make a complaint to a regulatory authority is prohibited as well. Curiously, it is the threat of a complaint, not the complaint itself, that is proscribed. 1 (The full text of both the old and new versions of the rule are set out in the appendix to this paper. 2 ) There is an exception to the new rule: it does not apply to an application made in good 1 The old rule prohibited both the threat and the actual bringing of a prosecution. 2 It should also be noted that apart from the Law Society rules, there is a rule in the Canadian Bar Association s Code of Professional Conduct against threatening or bringing a criminal, quasi-criminal or disciplinary proceeding in order to secure a civil advantage for a client: Chapter III, rule 9. The CBA rule does not refer to complaints to a regulatory authority. 1

3 faith to a regulatory authority for a benefit to which a client may be legally entitled. 3 The commentary below the rule explains the exception as follows: Where a regulatory authority exercises a jurisdiction that is essentially civil, it is not improper to threaten to make a complaint pursuant to that authority to achieve a benefit for the client. For example, where the regulatory authority of the office dealing with employment standards covers non-payment of wages, it is not improper to threaten to make a complaint pursuant to the relevant provincial statute for an order that wages be paid failing payment of unpaid wages. What does this mean for you in your hypothetical gas station case? Is asking the MOE to intervene merely an application for a benefit to which your client may be legally entitled? Possibly. But it seems that such an interpretation puts some strain on the ordinary meaning of those terms. There is certainly no MOE application form that can be filled out to request an order. 4 And the order itself is not exactly a benefit that your client is entitled to in the same sense that an employee is entitled to unpaid wages. The issuance of an order is a matter of discretion on the part of the MOE even where there are statutory grounds for an order, the MOE may decide not to issue one. 5 Moreover, it is debatable whether the MOE is a regulatory authority that exercises a jurisdiction that is essentially civil within the meaning of the commentary. In the sense that civil jurisdiction contrasts with criminal or quasi-criminal jurisdiction, then yes, the issuance of a cleanup order can be characterized as a civil matter. But is that really the sense the term was meant to connote? After all, if the rule against threatening proceedings were meant to be confined to threatening criminal or quasi-criminal proceedings, the old rule would have done the trick. It seems, rather, that the very purpose of the amendment was to capture threats to complain to regulatory authorities 3 Rule This exception does not appear in the Federation of Law Societies of Canada s Model Code of Professional Conduct; it was added by the Law Society of Upper Canada. The Law Society determined, after public consultation, that there may be circumstances in which the threat of a regulatory complaint is appropriate : Report to Convocation of the Professional Regulation Committee, October 24, 2013, at para There is, however, a form that can be submitted to the Environmental Commissioner of Ontario to request an investigation into an alleged environmental contravention pursuant to section 74 the Environmental Bill of Rights. 5 For example, sections 17 and 18 of the Environmental Protection Act use the permissive may rather than the mandatory shall the MOE may issue an order under those provisions but is not required to do so. 2

4 with a mandate that is not strictly penal. Further complicating the analysis is the fact that the MOE wears more than one hat. In addition to its order-making jurisdiction, which may or may not be characterized as civil, it also has the power to lay charges, which is clearly criminal or quasi-criminal. To return to the gas station example, the spill might give rise to a cleanup order or a prosecution for an unlawful discharge, 6 or both. The lawyer advising the MOE of the contamination cannot control which if any of those tools the MOE will pick. If threatening the gas station with an MOE prosecution is clearly improper, why should threatening the gas station to notify the MOE of the mere facts of the spill which could foreseeably lead to a prosecution be any better? Another way you might try to justify writing the demand letter would be to say that the rule only prohibits threats in an attempt to gain a benefit for a client, and an MOE cleanup order would not be a benefit for your clients. This is the approach taken by the Canadian Bar Association s Competition Law Section, which advised its members that the new rule generally does not prohibit making threats to complain to the Competition Bureau to seek a remedy in respect of allegedly anti-competitive conduct, because such a remedy should not be considered a benefit. 7 Accordingly, it suggested that the new rule is not expected to materially alter the practice of CBA Section members. I am not convinced. If the remedy (whether it is granted by the Competition Bureau or the MOE) is not for your client s benefit, why would you be seeking it? 8 All this is to say that the scope of the new rule is uncertain. The commentary, with its 6 For example, under section 14 of the Environmental Protection Act. 7 Change to the Law Society of Upper Canada Rules of Professional Conduct (undated), posted on the Canadian Bar Association s Competition Law Section website ( The document adds that, in the alternative, threatening to complain to the Competition Bureau should be considered to be captured by the language permitting an application made in good faith for a benefit to which a client may be legally entitled. For the reasons above, I question that interpretation. 8 At the risk of over-parsing, I would add that the term benefit arguably has a different connotation in Rule ( A lawyer shall not, in an attempt to gain a benefit for a client ) than it does in Rule ( Rule 3.2-5(b) does not apply to an application made in good faith to a regulatory authority for a benefit to which a client may be legally entitled ). The former would seem to capture benefits in the broad sense of advantages or positive results ( a new playground would be a benefit for those kids ), whereas the latter would seem to be confined to benefits in the narrower sense of entitlements ( she collects welfare benefits ). 3

5 confusing reference to regulatory authorities with an essentially civil mandate, clouds more than clarifies. It is not immediately obvious what problem the new rule is trying to solve. The old rule against threatening criminal proceedings seems to have been derived largely from concerns about abuse of process. As noted by the Ontario Court of Appeal in R. v. LeRoux, [1928] 3 D.L.R. 688, The criminal law was not enacted for the assistance of persons seeking to collect civil debts. 9 The new rule too seems concerned with abuse of process. The commentary notes that It is an abuse of the court or regulatory authority s process to threaten to make or advance a complaint in order to secure the satisfaction of a private grievance. Even if a client has a legitimate entitlement to be paid monies, threats to take criminal or quasicriminal action are not appropriate. 10 But do complaints to a regulatory authority always trigger the same alarms about abuse of process as do complaints to bring criminal charges? The MOE s mandate, after all, clearly includes the protection of the property and health of spill victims such as the nice young couple in our hypothetical scenario. 11 Asking the MOE to fulfill its statutory mandate in such circumstances can hardly be characterized as an abuse of process. Threatening the polluter with making such a bona fide request just seems like good 9 The case is cited in a bulletin entitled Criminal Law may not be Used to Collect Civil Debts in the Law Society of Upper Canada Gazette (Vol. II, No. 4), December See also Wilson v. Law Society of British Columbia (1986), 33 DLR (4 th ) 572, where the British Columbia Court of Appeal, referring to the rule against threatening criminal proceedings, said, The purpose of the rule is to prevent the criminal law from being used as a lever to enforce the payment of a civil claim. 10 There is a different rule, 5.1-2(n), saying a lawyer shall not, when representing a complainant or potential complainant, attempt to gain a benefit for the complainant by threatening the laying of a criminal charge or by offering to seek or to procure the withdrawal of a criminal charge. The commentary to this section explains: It is an abuse of the court s process to threaten to bring an action or to offer to seek withdrawal of a criminal charge in order to secure a civil advantage for the client. See also rules and and accompanying commentary. There is also a more general rule against abuse of process: Rule states that a lawyer shall not abuse the process of the tribunal by instituting or prosecuting proceedings which, although legal in themselves, are clearly motivated by malice on the part of the client and are brought solely for the purpose of injuring the other party. 11 For example, section 17 of the Environmental Protection Act authorizes the MOE to order a polluter, inter alia, to repair or prevent any injury or damage to property or human health or safety resulting from the discharge. 4

6 advocacy. 12 By contrast, it would surely be improper and quite possibly criminal 13 to threaten to go to the MOE to obtain an advantage for a client in an unrelated matter. A lawyer can t say, I will ask the MOE to issue a cleanup order against you unless you hire my client s nephew. Unfortunately the new rule does not distinguish clearly between threats to ask a regulatory authority to exercise its powers in accordance with its statutory mandate for a legitimate purpose, and threats to use a regulatory process for collateral or ulterior motives. It therefore seems overbroad. Even threats that are not frivolous and would not result in an abuse of process risk being captured by the rule. So should you write the demand letter to the gas station or not? I wouldn t. On the face of the new rule, threatening to ask the MOE to issue a cleanup order sounds like a threat to complain to a regulatory authority, and although there is a reasonable argument that it falls under the exemption as a good faith request for a benefit, the argument is far from watertight. Writing the letter seems like a big risk to be taking on personally. But playing it safe may have consequences for your clients. It means you will have one less tool at your disposal to achieve a favourable result for them. It is hard to imagine that was what the Law Society intended. Perhaps what is needed is for the Law Society to amend the rule to distinguish more clearly between threats that are legitimate and those that are not. For that matter, maybe the rule should just be repealed. That is what the American Bar Association did when it issued the Model Rules of Professional Conduct in 1983, which have since been adopted in whole or in part by every state except California. It chose to leave out the rule against threatening criminal proceedings that had appeared in the predecessor Model Code of Professional Responsibility. The American Bar Association 12 As Prof. Paul Daly has asked on his Administrative Law Matters blog, What could possibly be wrong about asking a regulator to do something that is lawful? ( Lawful Threats: Regulatory Law and Professional Conduct, December 17, 2014). 13 See section 346 of the Criminal Code (extortion). Note that there is an exemption from the extortion provision for threats to institute civil proceedings, but no such exemption for threats to make a complaint to a regulatory authority. 5

7 determined that the concerns which the rule had been meant to address were adequately covered by other rules, and that the rule might unduly interfere with lawyers zealous advocacy on behalf of their clients. 14 The rule was seen as redundant or overbroad or both. 15 Our new rule could well be described in the same way. 14 Ernest F. Lidge III (2009), Client Interests and a Lawyer s Duty to Expedite Litigation: Does Model Rule 3.2 Impose Any Independent Obligations? St. John s Law Review: Vol. 83: Iss. 1, at pp Geoffrey C. Hazard and W. William Hodes, The Law of Lawyering, A Handbook on the Model Rules of Professional Conduct (Prentice Hall Law & Business, 1990), quoted approvingly in Committee on Legal Ethics v. Printz, 416 S.E.2d 720 (W. Va. 1992). 6

8 Threatening Criminal Proceedings Appendix The New Rule, as of October 1, A lawyer shall not, in an attempt to gain a benefit for a client, threaten, or advise a client to threaten: (a) to initiate or proceed with a criminal or quasi-criminal charge; or (b) to make a complaint to a regulatory authority Rule 3.2-5(b) does not apply to an application made in good faith to a regulatory authority for a benefit to which a client may be legally entitled. Commentary [1] It is an abuse of the court or regulatory authority s process to threaten to make or advance a complaint in order to secure the satisfaction of a private grievance. Even if a client has a legitimate entitlement to be paid monies, threats to take criminal or quasi-criminal action are not appropriate. [2] It is not improper, however, to notify the appropriate authority of criminal or quasi-criminal activities while also taking steps through the civil system. Nor is it improper for a lawyer to request that another lawyer comply with an undertaking or trust condition or other professional obligation or face being reported to the Law Society. The impropriety stems from threatening to use criminal or quasi-criminal proceedings to gain a civil advantage. [2.1] Where a regulatory authority exercises a jurisdiction that is essentially civil, it is not improper to threaten to make a complaint pursuant to that authority to achieve a benefit for the client. For example, where the regulatory authority of the office dealing with employment standards covers non-payment of wages, it is not improper to threaten to make a complaint pursuant to the relevant provincial statute for an order that wages be paid failing payment of unpaid wages. Threatening Criminal Proceedings The Old Rule [2.02] (4) A lawyer shall not advise, threaten, or bring a criminal or quasi-criminal prosecution in order to secure a civil advantage for the client. [No commentary on this provision.] 7