LSO tribunal allows lawyer accused of theft to practise in-house pending merits determination

Tribunal found full suspension not likely to reduce risks associated with legal work

LSO tribunal allows lawyer accused of theft to practise in-house pending merits determination
Gavin MacKenzie says interim orders in disciplinary proceedings are meant to protect the public

A Law Society of Ontario tribunal has allowed a lawyer accused of having clients send firm funds to his personal account to continue practising in-house for a family corporation until his case is decided on the merits.

The decision came in the context of the Law Society Tribunal’s denial of an LSO motion for an interlocutory order suspending Matthew William O’Neil’s license to practise law.

Gavin MacKenzie of MacKenzie Barristers Professional Corporation, a Toronto litigation boutique, and a former treasurer of the LSO, says it’s important to remember that the tribunal’s ruling was interlocutory.

“Interim relief applications related to professional misconduct allegations are analogous to bail hearings. At this point the investigation is still proceeding, and the LSO is in an advantageous position because the lawyer has had a limited opportunity to respond.”

In other words, O’Neal would not yet have had an opportunity to advance his explanation, if any, for the alleged misconduct.

“The main concern in granting interim relief is protecting the public if the public is at risk,” MacKenzie said. “That concern is significantly lessened if the lawyer’s practice is restricted to acting for one client who is fully informed and has consented to the lawyer continuing to act for them.”

Bill Trudell of William Trudell Professional Corporation in Toronto, a veteran of numerous LSO disciplinary proceedings, notes that interlocutory license suspensions in professional misconduct cases have been properly described as “draconian.”

“A full suspension, as opposed to an order imposing restrictions on practice, means that the lawyer’s license is gone so that if the hearing on the merits absolves the lawyer, it's hard for him or her to get their practice back on track."

O’Neal was an associate at Janssen Law Professional Corporation, where he had worked since his call in 2017. The firm dismissed him in August 2021 after discovering that O’Neal had allegedly diverted client funds to his own account at least 19 times and misled clients about the status of their immigration matters.

To date, O’Neal has advised the LSO that the clients funds were mistakenly deposited to his personal bank account. He has not yet provided a response to the allegations of misleading his client – allegations which the panel described as “relatively new.”

Since his dismissal, O’Neal had been a sole practitioner, with much of his practice consisting of corporate work for his family’s corporation, a wholesale electrical supply company. His other work engaged immigration matters, although he had not yet opened a trust account.

While making “no finding that the respondent engaged in misconduct,” the panel concluded that the evidence “strongly supports an inference, in the absence of a defence or explanation, that the respondent diverted the firm’s receivables to his own use . . . misled his employer and clients . . . and presented false documents.”

Permitting O’Neal to practise without restrictions pending completion of the investigation, therefore, “would present a significant risk of harm, both to the public and to the public interest in the administration of justice.”

The risks to immigration clients, a “particularly vulnerable” group, was of significant concern.

But a full suspension was not likely to reduce the risks associated with O’Neal performing legal work for his family’s corporation.

“This is a non-arm’s length relationship,” the panel stated. “It is our view that, so long as this client is fully informed of the allegations and evidence gathered in this matter and it chooses to continue to retain the respondent as its lawyer, the risk to the public is not so significant as to be unacceptable.”

The result was an order restricting O’Neal’s license on an interlocutory basis by allowing him to practise only as in-house counsel for his family’s corporation.

Although O’Neal could well deal with other members of the public in his capacity as in-house counsel for the family company, MacKenzie opines that the risks to such third parties are low.

“Presumably, the Tribunal reasoned that it was unlikely that members of the public who deal with the company, especially if they have their own counsel, will be disadvantaged or have money stolen by the in-house lawyer.”

Trudell is of similar mind.

“The decision is well-crafted and balanced, and avoids imposing the ultimate penalty of suspension before the merits are decided.”

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