Torys LLP lawyer Darren Sukonick has a lot of catching up to do after nearly eight years of absence from a law practice he can now return to in light of a Law Society of Upper Canada hearing panel decision that found no evidence he was in a conflict of interest.
“As a lawyer, my most important asset is my reputation, and I am most gratified that this decision definitively asserts that I maintained the highest of standards of professional ethical conduct,” he says following the ruling in a case that was reportedly the law society’s longest-running disciplinary matter. “With my reputation intact, I feel confident that I can move forward to accomplish whatever I set out to do.”
For several years, his focus was on defending himself against conflict of interest allegations brought against him and his colleague, Beth DeMerchant, by the law society. The charges were in relation to work the pair did as part of the sale of Hollinger International Inc. assets between 2000 and 2003.
According to Sukonick’s counsel, the hearing itself took 135 hearing days spread across 2-1/2 years. Sukonick was 36 at the time the case began. Now 43, he and DeMerchant, who has since retired, have at last been exonerated.
In a 47-page decision, a law society hearing panel said it didn’t have sufficient evidence to find DeMerchant and Sukonick guilty of professional misconduct.
“The [lawyers’] clients are all considered to be sophisticated and before there is a finding of conflict of interest, there should be some evidence that counsel preferred the legal interests of one or more clients to the detriment of another. There was none,” wrote hearing panel chairman William Simpson.
Over the years of the proceedings, Sukonick says he remained engaged in his firm as a member of the pro bono committee and another group that oversaw renovation efforts at Torys. He even worked at some point as the interim in-house counsel at one of the firm’s public company clients.
But it remains a fact that the prime years of his career, which he could have spent honing his practice skills, are “gone forever,” as his lawyer put it.
“There is no doubt that my career path was impacted and that it will take considerable dedication and hard work to resume the type of cutting-edge corporate practice that I had and which my peers still have,” says Sukonick.
But the emotional toll of the allegations was tougher than watching the years go by, he says.
“What was most difficult for me and my family was the emotional impact and personal toll associated with the prosecution’s contention that I had lapsed ethically in serving my clients and the public nature of those allegations.”
According to a May report from the law society, the majority of cases that land on investigators’ desks finish within 10 months, although fraud and mortgage matters often take longer.
For Ian Smith, counsel for Sukonick, the length of time it took to render a decision in the case “defies the notion of justice.”
“There is no question that the transactions in question were complicated to a non-corporate lawyer and many documents were involved, as is customary with complex corporate transactions,” says Smith.
“However, this timeline defies the notion of justice.”
For Toronto lawyer Marcy Segal, who has defended lawyers as duty counsel at the law society, it appears from the ruling that the case “didn’t have a leg” and the LSUC should have withdrawn its allegations.
“It sounds like because of what happened with Hollinger and [Conrad] Black, the investigators wanted to cast a larger net around the various participants and in doing so almost ruined these two lawyers’ reputations and exemplary careers,” she says.
“It also sounds like the law society was relentless and was not prepared or did not have their eyes open to sense that this hearing was not going to be successful,” she adds, noting the LSUC should have thrown in the towel to avoid further financial and emotional damage.
The law society could have done many things differently to make the process less drawn out and wasteful, according to Smith, who says articulating the alleged wrongdoings would have been a good place to start.
His clients provided the law society with access to all documents and answers to “hundreds of specific questions,” he says.
“Once the investigation was complete, however, the law society did not articulate to our clients what they were alleged to have done wrong and did not give them an opportunity to respond to specific allegations (either factually or legally) before it sought approval from the law society’s proceedings authorization committee to commence proceedings,” says Smith.
The committee appears to have granted approval, Smith adds, after it heard about information gathered from the only witness the law society called at the hearing, Hans Marschdorf. But in its ruling, the hearing panel discredited some of the evidence he gave.
“Dr. Marschdorf’s task was difficult as he was asked to suggest conclusions when not all of the facts were known by him. After his testimony, further evidence showed that many of his suggestions could not be supported,” wrote Simpson.
The law society investigator had also suggested retaining an expert in corporate law Smith notes, “but for reasons unknown to us, this did not happen until months after the hearing started, and the person retained was withdrawn because, ironically, he himself was in a conflict of interest.”
There were other gaps, according to Smith, who notes the law society called no one involved in the case as a witness.
“To us, this shows serious flaws in the way this matter was investigated and prosecuted,” he adds.
“Had the law society been less combative and adversarial, and had the process been more transparent, we could have engaged in a productive discussion that may have narrowed both the legal issues to consider as well as the areas of factual dispute.
“Had the law society more fully investigated, they would have no doubt realized that some of their initial contentions could not be sustained.”
At the time of the decision, the law society expressed disappointment. Lisa Hall, a spokeswoman for LSUC, said the regulator agrees the case was “protracted” but noted it “carefully considers all of the information resulting from the investigation and whether a prosecution is in the public interest.”
For more, see "Lawyers for Hollinger facing discipline."