Anti-SLAPP motion dismissed in law firm’s libel action against occupational therapist

Not every transaction made by a lawyer is a matter of public interest: Court of Appeal

Anti-SLAPP motion dismissed in law firm’s libel action against occupational therapist
Jonathan Lisus, Lax O’Sullivan Lisus Gottlieb LLP.

A law firm’s defamation suit will go ahead, with the Court of Appeal confirming the lower court’s dismissal of the defendant’s anti-SLAPP motion.

The case stemmed from a referral relationship that went sour between the personal injury law firm Sokoloff Lawyers and Tru-Path Occupational Therapy Services. Sokoloff would refer injured clients to Tru-Path, which would be paid by the client’s insurance provider. Sokoloff would hold the insurance funds in trust until the clients authorized their payment to Tru-Path. The relationship broke down as the firm began to question certain charges. Tru-Path terminated the referral arrangement and have an ongoing action in court concerning the alleged unpaid funds.

The defamation occurred when Troy Campbell, president of Tru-Path, picketed outside Sokoloff Lawyers’ offices, on two occasions, with signs that said the firm had “seized” around $1.3 million in unpaid fees. “SOKOLOFF LAWYERS USED OUR COMPANY’S REHAB SERVICES TO HELP MANY OF THEIR CLIENTS’ AB CLAIMS BUT WON’T PAY,” read another of Campbell’s signs.

The key question in Sokoloff v. Tru-Path Occupational Therapy Services Ltd., 2020 ONCA 730 was the whether the defamatory statements concerned the law firm’s “publicly scrutinized conduct” as lawyers or the two parties’ private commercial interests. In a decision delivered Nov. 17, Court of Appeal Justices Grant Huscroft, Benjamin Zarnett and Steve Coroza confirmed it was the latter.

“Importantly, [the decision] makes it clear that simply because professionals – in this case lawyers – happen to be subject of the expression, that doesn't make the expression automatically in the public interest. The court really has to look at what the expression is about in its complete context,” says Jonathan Lisus, who acted for Wendy Sokoloff and Sokoloff Lawyers.

Ontario introduced the law seeking to prevent strategic lawsuits against public participation – anti-SLAPP – in 2015, by adding s. 137.1  to the Courts of Justice Act. The legislation’s purpose is to encourage expression and debate on matters of public interest, and ensure litigation is not used to silence it. When a person defending against a defamation claim brings a motion under s. 137.1, the proceeding against them is supposed to be dismissed if the judge is satisfied the expression at issue relates to a matter of public interest.

Finding the defamatory expression was about a private, commercial matter, Superior Court Justice Edward Morgan dismissed Campbell’s motion. On appeal, Campbell argued Morgan had incorrectly taken into account Campbell’s presumed motives and how he chose to express the issue, made a qualitative assessment of the impact of Campbell’s expression and failed to consider that Campbell’s expression could relate to multiple issues. The way a regulated profession renders service to clients and the arrangements it makes with health-care providers it incorporates into clients’ claims is ”undoubtedly a subject that some members of the public have an interest in knowing about,” Campbell said.

The Supreme Court of Canada has held that the question of whether an expression relates to matter of public interest is a “contextual inquiry,” said Sokoloff. The respondents argued the motion judge properly considered the circumstances that led to Campbell’s picket –alleged unpaid accounts – as well as his own “professed indifference to the public interest.” During his cross-examination, Campbell said he did not care about the ethical responsibilities of lawyers. He was asked if he knew lawyers have a duty of loyalty to their clients and that they cannot pay out trust funds without client authorization. He replied: “No, and it doesn’t concern me” and “I really don’t give, you know, any nasal snots about that.”

In September, the Supreme Court of Canada delivered two decisions on Ontario’s anti-SLAPP law. Citing one, 1704604 Ontario Ltd. v. Pointes Protection Association, the Court of Appeal said: There is no single test for identifying the public interest and the interpretation of whether an expression relates to it must be “broad and liberal” and “generous and expansive.” Though in Sokoloff, the Court of Appeal said Morgan had erred by taking into consideration irrelevant factors such as “the merits or manner of the expression,” they agreed that the heart of s. 137.1(3) – What is the expression really about? – was correctly identified as being about a private dispute.

“The expression at issue at issue here, when viewed in its complete context, was really about the appellants trying to pressure the respondents to pay monies that they claimed were owed by their mutual clients,” says Lisus, a litigator at Lax O’Sullivan Lisus Gottlieb LLP. “There wasn't any larger issue about legal ethics, or professionalism. The expression really occurred in the context of a private commercial dispute, which happened to involve the lawyer and an occupational therapist, both regulated professionals, but that didn't of itself engage a public interest.”

“Plainly, the public has an interest in the ethical conduct of lawyers. But it does not follow that every lawyer’s transactions are a matter of public interest,” said the Court of Appeal’s decision.

The other of the two anti-SLAPP SCC decisions delivered in September was Bent v. Platnick, 2020 SCC 23. In Platnick, the defamation was a mass email sent by the then-president-elect of the Ontario Trial lawyers’ Association which accused a doctor and frequent medical expert in insurance litigation had been dishonest. Campbell referred to Platnick and argued the public has an interest in lawyers being held to their undertakings, the alleged failure of which was the subject of the expression. But the Court said the two cases were “in no way similar.” Campbell raised “no general concerns about the importance of lawyers respecting their undertakings,” and while, in Platnick, the defamatory email was sent to OTLA members who have an interest in the credibility of medical experts, Campbell’s picketing was not directed at those with an interest in Sokoloff Lawyers’ conduct, said the Court.

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