LSO tribunal's professional misconduct penalty for misleading advertising includes fine of $100,000
A Law Society Tribunal disciplinary panel says that Toronto personal injury lawyer Jeremy Diamond must not practise law for three months – and has been fined $100,000 - after being found guilty of professional misconduct for misleading advertising.
But it’s not an outright “suspension,” according to the order issued last week, and Diamond’s lawyer, Brian Greenspan, says his client intends to appeal the ruling.
Due to the “extraordinary circumstances” of the facts in this case, the panel decided to prohibit Diamond from practising law or providing legal services for three months, but he “was not suspended,” the March 29 panel decision says.
Still, Diamond “must comply, as if suspended, with ss. 2 and 4 of the Law Society’s Guidelines for Lawyers Who are Suspended or Who Have Given an Undertaking Not to Practise.”
The tribunal, an independent body that hears and decides regulatory cases between the Law Society of Ontario and Ontario lawyers or paralegals, further ordered that during those three months, set to start April 28, the firm’s website is to prominently indicate that Diamond is not permitted to practice law or provide legal services.
Diamond must also not be referred to “in new or renewed marketing or advertising, in any form, that had not been arranged for prior to the date of these reasons.”
The $100,000 fine imposed on Diamond is the maximum permitted, the panel said, adding that it decided not to only fine Diamond as it concluded: “A fine would be seen just as a mere cost of doing business which would not sufficiently serve the penalty goals of specific deterrence, general deterrence and maintaining public confidence.”
While of "limited impact," the panel says, the order that Diamond not practice for three months is “necessary to convey to the professions and the public that the professional misconduct that was admitted and found is treated seriously by the tribunal.” It also informs the public that the penalty reflects the seriousness of the offence.
Paul Harte, primary author of the Ontario Trial Lawyers Association's Code of Conduct, says that the tribunal's decision "is a welcome one." It is "one of a series of recent decisions appropriately condemning the use of false and deceptive marketing" and "appropriately recognizes the need for general deterrence to reduce and hopefully eliminate false and misleading marketing practices amongst unscrupulous lawyers who put profits ahead of professional responsibility."
He notes that Diamond is not a member of the OTLA, which he describes as the "leading professional organization for plaintiff personal injury lawyers." The code says that when a member engages in marketing, the member should adhere to the same responsibilities for professional conduct and must not mislead or deceive. They also should avoid comparing themselves to other lawyers and should market in accordance with justifiable expectations and achievable results.
Exceptional circumstances in finding the right penalty
The panel acknowledged that the decision to prohibit Diamond from practicing law or providing legal services “is an exceptional decision made in exceptional circumstances.” It adds that “ordinarily, a suspension order would be made rather than a prohibition order” then explains why the panel took this approach.
“The effect of a suspension on Diamond & Diamond marketing would appear to be very significant given that . . . Diamond has been the main face of the firm,” the decision says. On the other hand, it does not appear that Diamond provides much legal services to clients. “His work is mostly managing the firm. A suspension of Diamond “would have a much greater effect on the other lawyers” in Diamond & Diamond than on Diamond himself.
According to an agreed statement of facts, Diamond’s role consisted “mainly of managing the business of the firm.” He typically reviews cases and determines whether the firm will take on the file, then passes it on to lawyers who would do the legal work.
“Diamond pays for all Diamond & Diamond marketing through his professional corporation. Diamond (or his professional corporation) did not receive any fees for client work done by him. His income came from fees for referring work to others within Diamond & Diamond and to other firms.”
The panel says it made its decision “with some hesitation considering the use that might be made of this decision in future cases.” It adds: “We regard this as a truly exceptional case and our approach to be truly exceptional. Our intent is that our decision will only be of precedential value in similarly exceptional cases, should any occur.”
Among the reasons for taking this approach is that it will avoid the collateral consequences of a suspension order on other lawyers at Diamond’s firm by not suspending his licence.
The panel’s decision says suspending a lawyer who provides limited legal services in a firm that operates by mass marketing and referral fees does not have the same effect as suspensions in typical proceedings before the tribunal.
“Ordinarily, a lawyer who is not permitted to practise through a suspension suffers a resulting loss of work and income. Ordinarily, the effects of restrictions on marketing only impact the subject lawyer and are in support of that suspension. This case is very different from the ordinary case.”
The public face of Diamond & Diamond
Diamond is the face of Diamond & Diamond, known for billboards, bus ads, and TV and radio spots with slogans such as “nothing is tougher than a diamond.” Yet Diamond earlier admitted to engaging in professional misconduct in marketing the firm, with the tribunal decision saying “it was false and deceptive to market legal services that the Lawyer did not in fact provide and to market himself as an expert personal injury lawyer.”
In 2021, Diamond admitted before the panel that between 2013 and 2017, he improperly marketed personal injury legal services by failing to disclose “clearly and prominently” that Diamond & Diamond referred thousands of potential clients to other lawyers for fees.
He later sought to revoke that admission after the tribunal, led by chair Malcolm Mercer, said a reprimand, as recommended by both prosecutors and Diamond’s defence team, was too lenient “in the context of failures of honesty and integrity in communications to very large numbers of potential clients over a lengthy period of time.”
However, the panel determined last August that Diamond should not be permitted to withdraw his admissions of professional misconduct” and would decide the appropriate penalty.
Misleading marketing and advertising
Following a penalty hearing in February regarding Diamond’s conduct, the panel found professional misconduct based on an agreed statement of facts, affidavit evidence and Diamond’s admissions. The admission says that:
- Diamond has marketed legal services that could “mislead, confuse, or deceive” and is not in the best interests of the public.
- Diamond improperly marketed the provision of legal services as a personal injury litigation lawyer that he did not provide. Between January 1, 2013, and December 31, 2017, Diamond did not enter into retainer agreements with clients to provide legal services as a personal injury litigation lawyer. He referred all potential clients to other lawyers.
- Diamond’s advertisements failed to disclose the practice of Diamond & Diamond of referring potential clients to other licensees for a fee.
- Diamond improperly marketed himself as an expert personal injury litigation lawyer when he did not represent, or provide legal services to, retained clients. His experience did not include conducting trials in personal injury litigation cases.
- Between January 1, 2013, and December 31, 2017, Diamond’s advertisements claimed he had “expertise in representation of injured persons” and “significant experience in all aspects of personal injury litigation.”
- Diamond improperly marketed legal services through claims suggesting that he and Diamond & Diamond are superior to other lawyers. Since January 1, 2013, the marketing has included such descriptions as “most-trusted” and “top-rated.”
- Diamond improperly marketed the services of Diamond & Diamond by referencing, monetary amounts recovered in personal injury cases without explaining that past results are not necessarily indicative of future results outcomes vary according to the facts of individual cases.
Diamond’s position was that a reprimand was the appropriate penalty. In the alternative, he said a significant fine of as much as $100,000 would be appropriate. His position was that an outright suspension “would be inappropriate given the significant unintended consequences that would arise from a suspension.”
In imposing the fine and not allowing Diamond to practice law for three months, the panel decision said it was essential to set an example in cases of misconduct such as those he committed. “As is obvious, given . . . Diamond’s marketing budget, personal injury law can be big business if undertaken as by Diamond & Diamond.
“Where some market participants proceed and are successful, based on improper marketing, other market participants are potentially incentivized to similar misconduct whether to compete or simply to be successful themselves. If not effectively penalized, misconduct of this kind has the potential to encourage misconduct by others.”
The decision adds: “Whether as a matter of moral responsibility or given the purposes of specific and general deterrence and maintaining public confidence, financial gain can be a relevant consideration both in considering the misconduct and the professional.”
Diamond’s lawyer Greenspan said in an emailed statement to the Toronto Star said: “Having improperly rejected the joint submission of the Law Society and counsel that a reprimand was both fair and appropriate, the Tribunal imposed a purely punitive and unjustifiably harsh penalty which will be appealed,” Greenspan wrote in an emailed statement.
He also told the Star that while his client intends to appeal the ruling, the order “does not affect or impact the operation of Diamond & Diamond nor of its 65 lawyers across the country.” It “only requires that Jeremy Diamond not personally attend at his office or personally take on new clients or personally provide legal advice for three months.”
Dale Orlando of McLeish Orlando LLP says he can’t speak for the thoughts of most PI lawyers," but all lawyers in Ontario are bound by the Rules of Professional Conduct. Rule 4.2-1 requires that statements made in advertising and marketing must be true, accurate and verifiable. The rule also explicitly says that the communications must not be misleading or deceptive and must be consistent with a high standard of professionalism.
"I haven’t conducted any kind of survey but I would expect that all lawyers, with perhaps the exception of a limited few personal injury lawyers, find the Rule eminently reasonable and good for both the public and the profession itself."