LSO Issues

Steve Sherriff's report: bad faith and abuse of process in the Law Society's prosecution of Beth DeMerchant and Darren Sukonick

Steve Sherriff spent over forty years prosecuting criminal cases in Ontario. From 1981 to 1989 he was the Law Society of Upper Canada's first Senior Counsel of Discipline, its Chief Prosecutor, running a staff of about thirty. He later became General Counsel at the Ministry of the Attorney General, led roughly eighty murder prosecutions, and was qualified as an expert on criminal investigations and prosecutions at the Kaufman Commission into the wrongful conviction of Guy Paul Morin, where Justice Kaufman quoted his evidence at length. In January 2019, counsel for Beth DeMerchant and Darren Sukonick asked him to review how the Law Society had investigated and prosecuted their clients. He started, he says at paragraph 4, with a presumption of good faith. Some history first. In late November 2005 the Globe and Mail reported that Torys LLP had settled with Hollinger International for US$30.25 million, one of the largest professional liability settlements in North American history. Two weeks later the Law Society opened an investigation into two of the firm's partners. DeMerchant and Sukonick were notified on January 9, 2006. Notices of Hearing were not issued until April 30, 2009, more than three years later. The hearing itself ran 138 days over three and a quarter years. On October 17, 2013 the Hearing Panel exonerated both lawyers on all six particulars. The Law Society appealed a month later. The costs litigation did not end until January 2017, eleven years after the file was opened. By paragraph 22 of his report, Sherriff had reached this: "much of what the Law Society did to these plaintiffs, involved a marked departure from standards, frequently motivated by intentional bad faith, for ulterior purposes." On the investigation, he found that Law Society investigators confined themselves to documents. They interviewed no one who took part in any of the transactions under scrutiny, and none of those people's counsel. They did not interview the Hollinger executives or the independent directors about the two lawyers they were investigating. They did not investigate whether anyone had been harmed. They ignored the Chicago criminal trial of Conrad Black, at which several Torys lawyers had given evidence by deposition. An expert who was not qualified in corporate and commercial law became the Law Society's only witness. Sherriff describes the investigation report that came out of all this as intentionally misleading. On motive, he points at the chief executive. Sherriff found that CEO Malcolm Heins interfered in both the investigation and the prosecution, driven by a preoccupation with the Law Society's reputation, the cost of professional indemnity insurance, and the preservation of self-government. Four senior Law Society officials had already raised concerns about Heins's involvement: Dan Abrahams, Senior Counsel Professional Regulation; Zeynep Onen, Executive Director Professional Responsibility; Lesley Cameron, then Manager of the Discipline Department; and Heins's successor as CEO, Robert Lapper. Sherriff's verdict at paragraph 549 is one sentence: "This was quite simply improper 'political' interference for ulterior motives." As he read the file, the two lawyers were "pawns in a much larger chess game between the Law Society and Torys." The prosecutor's conduct gets its own section. After the Hearing Panel ruled a May 12, 2010 letter inadmissible, prosecutor Paul Stern handed that same letter to National Post reporter Jim Middlemiss, who published its contents. The letter revealed a confidential mediation involving further claims against Torys, and had nothing to do with the allegations being heard. Three days earlier the same reporter had criticized Stern for trying to close the hearing to the public. Counsel for the two lawyers, Ian Smith and Philip Campbell, complained in writing on May 14, 2010. The Law Society never claimed the disclosure was an accident or a mistake. Sherriff calls it sharp practice and an intentional departure from ethical conduct by the prosecutor. Then there is the press release. The day after the Hearing Panel cleared both lawyers, the Law Society posted a statement on its website under the heading "For The Record" and sent it to the National Post, Canadian Lawyer and the Globe and Mail. It named both lawyers and said the Law Society was disappointed in the decision, while an appeal was being considered and the matter was still sub judice. Lesley Cameron drafted it with a public relations consultant and Zeynep Onen approved its release. The stated communications objective, in the Law Society's own internal document, was to "manage reputational risk" and frame "key issues on our terms". The statement came down only after counsel for the two lawyers objected. There was a private written apology through counsel. There was no public one. Sherriff's conclusion, at paragraph 588: "I find it troubling that I have encountered considerable evidence of bad faith, improper animus, ulterior motives, and resultant abuse of the Law Society's process in this Law Society investigation and prosecution. A Law Society investigation and prosecution should be one of the last places one would expect to encounter such evidence." And at 589: "However, I find it somewhat reassuring that the plaintiffs escaped being wrongfully convicted of professional misconduct; but not for the lack of trying." The full report is attached below. It runs 162 pages: 589 numbered paragraphs of analysis, a chronology of events at Appendix A covering January 2001 to January 2017, and a summary of Sherriff's own experience at Appendix B. It is an interim report, signed June 7, 2019, and Sherriff reserves the right to amend it. Read it yourself before you take anyone's summary of it, including this one.