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Proceed cautiously on ABS

Speaker's Corner

Ontario lawyers are currently being asked to share their opinions on alternative business structures in the province. If accepted, this would mean the delivery of legal services through civil society organizations to facilitate access to justice. 

I believe that alternative business structures — known as ABS — have the potential to have a positive effect in Ontario, especially when viewed from the perspective of increasing access to justice. At this stage, however, a number of significant issues and challenges remain and should be considered carefully prior to the Law Society of Upper Canada effecting any formal changes. It is my hope that the LSUC continues to research the effects of introducing ABS in Ontario and that consultation continues between the LSUC and members of the legal profession, as well as members of the public, before changes are made.

Civil society organizations have the potential to allow for a particularly efficient means of co-ordinated delivery of legal services alongside other existing services. This model was presented as a way to bridge the gap between the private bar and public support by providing legal services to individuals who fall somewhere in between. Under this structure, private charitable and non-profit organizations would be able to independently raise funds and employ licensees to reach and serve individuals who are currently unable to access legal services. 

There are many legal services that are inadequately provided by either the private bar or legal aid, including assistance with Ontario Works claims, Ontario Disability Support Program claims, Criminal Injuries Compensation Board claims and residential tenancy issues. Assistance with these matters could be adequately provided to the public under the civil society organizations model. 

The most vulnerable populations, such as immigrants, refugees, survivors of sexual assault and those with mental health issues, would greatly benefit from the provision of legal services in a holistic setting, allowing multiple needs to be met at once.

On the other hand, a number of concerns remain. Particularly, the personal injury bar is concerned with the ability of civil society organizations to provide legal services under the working group’s proposed “Aspire Law” model. 

This model involved a partnership between Aspire, a national British spinal cord injury charity, and a leading personal injury law firm. Under this model, Aspire channels cases to the private firm and retains a portion of the profits from the referral. Some of these profits are then directed to Aspire to be used for other social justice purposes, with the remainder of the profits going to the firm. 

This model is concerning to the personal injury bar since it is effectively allowing a lawyer to seek an advantage in the private market by providing donations to charities in exchange for referrals. Permitting the civil services organizations model in Ontario has the potential to create an ethical dilemma for licensees operating within those structures. Accepting a referral from a civil society organization under these circumstances would violate the LSUC’s Rules of Professional Conduct and the Paralegal Rules of Conduct about referral fees. Exempting organizations from these rules would greatly disrupt the regulation of the legal profession.

This regulatory challenge also has the potential to tarnish the reputation of the legal profession in the eyes of the general public and ultimately serve against the public interest. Permitting sponsorships and associations can lead to conflicts of interest. For example, an organization may direct clients to a particular firm because of a sense of obligation created by the financial support received, without regard to the competency of the lawyers at the firm to meet the clients’ needs. This could result in sacrificing the quality of legal services provided in favour of minimizing costs and maximizing profits for the civil society organization and a failure to uphold the high standards and values of the legal profession.

The topic has been brewing for a while. In September 2014, the Law Society of Upper Canada released a discussion paper on the topic of alternative business structures in Ontario. In response, an LSUC working group presented four potential models for the provision of legal services permitting non-licensees to own law firms to varying degrees. 

After soliciting responses to this proposal from members of the legal profession and the general public and receiving mixed responses, the working group focused on allowing the delivery of legal services through civil society organizations to facilitate access to justice. Again, the LSUC welcomed members of the legal profession and general public to comment on this issue, prior to discussing the motion to implement the civil services organization model at Convocation.

This past June, the working group recommended that the LSUC’s bylaws be amended to permit the civil society organizations structure in Ontario. The working group outlined the following principles to guide the framing of any changes to the bylaws, that licensees have control over the delivery of their professional services, that solicitor-client privilege will be protected and that the fundamentals of professionalism, including independence, competence, integrity and service to the public good through client relationships and responsibilities to the administration of justice will be safeguarded.

The Ontario Trial Lawyers Association provided submissions on this topic, outlining some of the benefits but noting significant challenges. In the submissions, a fourth principle was suggested, that the civil society organizations cannot directly or indirectly charge any fee from clients in respect of any legal service provided by the civil society organizations to them through its embedded licensees, nor can the organization take any fee or receive any donation directly or indirectly for referring any matter to a licensee not employed by the civil society organizations.

The addition of this principle is necessary to ensure proper implementation and successful regulation of the civil society organizations structure in Ontario.  We are currently at a pivotal point in the profession’s regulatory history. After receiving numerous submissions on this topic, it will be interesting to see how the LSUC responds and, if alternative business structures are ultimately permitted in Ontario, whether these challenges will be minimized. Hopefully, the LSUC will thoroughly consider the submissions received and the challenges presented by the civil services organization model prior to passing the motion and altering the bylaws.           

Charles Gluckstein is a specialist in civil litigation and partner with Gluckstein Personal Injury Lawyers in Toronto. He is the past president and current active member of the Ontario Trial Lawyers Association.

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