Lawyer to face disciplinary hearing for overbilling survivors

A Winnipeg lawyer who overbilled 26 residential school survivors for his services could face disbarment.

“This is certainly a case which is serious and, yes, I would say there is a potential for (disbarment). I don’t know yet what the appropriate penalty would be and what the panel would decide but (disbarment) is certainly not off the table,” said Allan Fineblit, CEO with the Law Society of Manitoba.

The lawyer, who cannot be named because of a pending disciplinary hearing, has until May 30 to repay $388,477 into a trust account.

“So far all the (interim) payments have been made and the money is back in the trust account. We expect the last payment before the end of the month. He has paid more than half of it already, because he was required to,” said Fineblit.

The over-billing was brought to the law society’s attention in May 2010 by Daniel Ish, chief adjudicator for the Independent Assessment Process, which was set out by the Indian Residential School Settlement Agreement. Ish’s office was contacted when claimants discovered a discrepancy in the fees paid to the lawyer and the amount of compensation they should have received.

“The best way that I or my office can discover irregularities in billing is if claimants advise me,” said Ish.

As Ish does not have regulatory power over lawyers, he reported his concerns to the law society. As a result, the society filed disciplinary charges against the lawyer.
“We charged him with professional misconduct and we did something a bit unusual. We do have the jurisdiction before a hearing to require a lawyer to do certain things we think are necessary to protect the public. It was a large amount of money that had to be repaid and we were concerned because the money was not in his trust account any more,” said Fineblit.

Initially, the society’s Complaints Investigation Committee gave until March 9, 2011, 30 days from meeting with the lawyer, to repay the funds. The lawyer appealed the CIC’s decision and the CIC granted an additional 30 days. Claiming April 9 was a hardship, the lawyer took the matter to the Court of Queen’s Bench asking for a stay. In a 30-page written ruling, Justice Shane Perlmutter dismissed the motion for a stay, saying, “I am not satisfied that (the lawyer) would, unless the stay is granted, suffer irreparable harm. Rather … any irreparable harm would appear to stem from his own lack of diligence in satisfying the CIC that he has exercised all due diligence in attempting to repay the trust funds. He has not provided compelling evidence that he cannot repay a substantial amount of these trust funds, if not all of these trust funds, by the deadline imposed by the CIC.”

The lawyer returned to the CIC and May 30 was set as the deadline. The lawyer took the matter back to Perlmutter, again arguing hardship for payment. Perlmutter rendered an oral decision April 28, ruling May 30 would remain as the deadline for repayment.

The residential school settlement agreement gives adjudicators the authority to assess legal fees for “fairness and reasonableness…. If the adju-dicator varies the amount to be charged, the lawyer is bound by that ruling. If a lawyer charges more than the ruling amount, that is an over-billing,” said Ish.

While there was a case in British Columbia in which irregularities raised questions, an investigation cleared over-billing concerns.

“The situation involving the Winnipeg lawyer … is the only situation of over-billing of which I am aware,” said Ish. “However, although it involved only one lawyer, it involved numerous clients.”

Perlmutter noted that the lawyer “did not challenge the jurisdiction of the adjudicator or (appeal) the decisions.”

Fineblit said a date has yet to be set for the lawyer’s disciplinary hearing. This will be the second time the lawyer has faced such action. A year ago, he pled guilty to not depositing retainer fees into a trust account and was suspended for 70 days beginning in mid-June. Fineblit said the lawyer’s prior record, nature of conduct and “what went on” will be taken into consideration before a penalty, which could be a fine, suspension or disbarment, is leveled by the three-person panel.

Said Perlmutter in his written ruling, “(The lawyer) was representing clients who were extremely vulnerable, in that they were undergoing a very personal and often traumatic process…. (The lawyer) flagrantly ignored numerous decisions of adjudicators in respect of his fees ….”