"AvoidAClaim" Blog

LAWPRO's blog helps you avoid legal malpractice claims
Subscribe

LAWPRO Tales of Horror: A U.S. court decision on a a bank’s duties to a firm in a bad cheque scam

October 31, 2014 By: TimLemieux Category: Fraud prevention

Horror

Lawyer Ethics Alert Blogs has a post describing an Illinois appeals court case in which the court ruled that a law firm had no recourse against its financial institution in a counterfeit cheque matter.

While the laws dealing with financial institutions in the U.S. are different than here, the takeaway for Ontario lawyers is to make sure they’ve read the fine print of the contract with their banks (and of course, learn how to recognize the red flags of these scams). While LAWPRO counterfeit cheque coverage may offer a measure of protection if a lawyer is victimized, there is still the chilling prospect of having the bank demanding that a trust account shortfall resulting from a fraud be made good.

Things that go bump in the night: Disclosure of ghosts in Ontario

October 30, 2014 By: TimLemieux Category: Real estate

The Amityville Horror Year 1979 Director Stuart Rosenberg James Brolin Margot Kidder

Are the sellers of homes with a “stigma” required to disclose that to potential buyers in Ontario? In his blog post Things that go bump in the night: Disclosure of Ghosts in Ontario, Matthew J. Wilson of Lerners explores that question.

The short answer? Buyer beware!

Want a challenge-proof will? Think like a (wannabe) beneficiary

October 30, 2014 By: TimLemieux Category: Wills/Estates

As a lawyer, you have likely been trained to maintain a laser focus on your client’s interests and how to express and defend them. Being a fierce advocate is usually a good thing.

But when preparing a will for a client, it can be a useful exercise, once you have a good first draft, to intentionally play devil’s advocate.

At the Law Society of Upper Canada Solo and Small Firm Practice Conference in June 2014, estates lawyer Lisa Barazzutti suggested that when reviewing a newly-drafted will, it’s useful to read the will from the perspective of the beneficiaries. “Ask yourself,” says Barazzutti, “if I were a beneficiary, would I challenge this, and how?”

Putting yourself in the shoes of your client’s beneficiaries (or others who expect to benefit – but won’t) is a good way to remind yourself that a testator’s family may have expectations – valid or otherwise – about how assets will be distributed. To the extent that you can anticipate those expectations, you can identify potential areas of disappointment. The provisions in which the client’s instructions diverge from beneficiary expectations are the “stress points” where the will is vulnerable to challenge. Once you have identified those stress points, you can take steps to reinforce them.

For example, where a testator’s adult children are expecting to share equally in the ownership and management of an income property – and the testator would prefer to leave that asset to just one of the children − the will can include an explanation of the testator’s reasons: for example, that she thought it would be impractical for the children to make the necessary business decisions jointly. This explanation might limit the arguments that the “disappointed” beneficiaries can make in support of a claim for equal shares of the asset.

Provisions that explain the testator’s reasons for will decisions can also help counter challenges based on lack of testamentary capacity, because they can serve as evidence that the testator applied his or her reasoning to the implications of the particular bequests and devises. The chances of a successful capacity challenge can be further minimized by making notes in the file about discussions with the testator about his or her reasons. The lawyer can also describe, in file notes, his or her impressions of the testator’s capacity; as well as any inquiries made to ensure that the testator was not subject to undue influence.

Often, the parties most likely to challenge a will are not beneficiaries at all, but rather, non-beneficiaries: those individuals who expect to receive an inheritance, but who will not. Would-be beneficiaries who were dependent on the testator while he or she was alive will generally be able to rely on the Ontario Succession Law Reform Act (or comparable legislation in your jurisdiction) for a remedy. The trickier question is whether other, non-dependent parties may attempt to challenge the will based on the content of pre-existing wills, verbal promises, business contracts, trust doctrine, or other analyses.

To anticipate these arguments, the lawyer will need a detailed understanding of the client’s past and present relationships, marriage and/or business history, and living arrangements. Using a will interview checklist can help a lawyer remember to ask particular questions and to make notes in the file.

After reviewing those notes, read the draft will, considering the provisions from the perspective of former spouses, business partners, caregivers, and housemates. If anyone were to challenge the will, who would it be, and what would he or she argue? Once you’ve identified potential stress points, consider clarifying provisions to limit challenge arguments. Being devil’s advocate can mean being your client’s best advocate too.

What keeps family lawyers up at night? Managing your stress

October 29, 2014 By: TimLemieux Category: Family law

Like many areas of practice, family law is going through a period of change. Both clients and their lawyers are questioning traditional modes of practice. Economic woes both cause legal problems, and leave clients with limited resources with which to resolve them. Stress – for both families in crisis and for their lawyers – is a constant reality. Still, within this challenging climate, family lawyers are expected to work diligently and professionally in the service of their clients’ interests.

To understand how the bar is coping with the demands of modern family law practice, we invited a sampling of lawyers from across the province to answer the question “What keeps you up at night?”

Erinn A. Fitzpatrick is an associate lawyer at Valin Partners LLP in North Bay. She practises in the areas of family law, real estate, and wills and estates.

The problem
Like most other family law lawyers, I often work with clients who are in crisis. Clients often attend my office immediately after being blindsided by a sudden separation, or after months of careful planning to leave an abusive relationship. The fear, pain, and anger they express is very real, and my office is sometimes the first place they have had an opportunity to disclose their extremely personal problems. These accounts at times quite literally keep me up, especially when I receive multiple panicked email messages on my mobile phone from clients requesting instantaneous advice at all hours of the night.

Working with clients in crisis is rewarding, but stressful. Although our job as lawyers is to provide meaningful legal advice and not therapy, it is impossible not to be affected by the depressing and sometimes horrific narratives of our clients. As many family law lawyers have not been formally trained in dealing with crisis or trauma, I fear that we are not always able to recognize the symptoms of burnout before it is too late. I have witnessed family law lawyers become overly cynical, disengaged, frustrated, and exhausted by the difficult work that they do every day. Some suffer even more serious consequences, including depression and substance abuse.

What helps
The first step is simply to recognize that family law is very stressful, and to take precautions against burnout. Lawyers are notoriously guilty of working long hours and having poor work/life balance. Taking adequate time to spend with friends and family, to engage in favourite activities, to get enough exercise, to rest, and to eat right are all ways of ensuring wellness and preventing burnout. While these suggestions might seem self-evident, they are often surprisingly difficult to incorporate into our busy days.

Lawyers must also set appropriate boundaries between their work and private lives. Sometimes I go as far as to lock my mobile phone in my vehicle for the evening to feel completely unplugged from my office.

Advice for new lawyers
New lawyers can easily become overwhelmed by the stress of working with family law clients. It helps to keep in mind that while it is important to be patient and compassionate, it is equally important to remain professional and to avoid becoming personally engrossed in a family law client’s situation.

The full article can be found in the August 2012 issue of LAWPRO Magazine. All past LAWPRO Magazine articles can be found at www.lawpro.ca/magazinearchives

LAWPRO Tales of Horror: The Phantom Client Returns…Again and Again

October 29, 2014 By: TimLemieux Category: Civil litigation, Communication errors

officecubicleghost

Recent LAWPRO claims have driven home to us the importance of formal retainer arrangements and avoiding the spectre of the phantom client. Unfortunately, these issues are not new. In 1991,William S. O’Hara wrote an article for the Law Society of Upper Canada Errors and Omissions Bulletin entitled “Beware of the Phantom Client.” He wrote:

Of all the hazards of practising law in the late twentieth century none is more bone chilling than the phantom client who drifts into our office like an apparition, speaks to your briefly, and then disappears into the mists of time. The phantom reappears only when forgotten, to haunt you and point a bony finger at you…

A phantom client is almost always the victimof a loss by house fire, car crash, slander or anything else involving a limitation period. The apparition will always appear before the limitation period has expired. The first meeting is usually a short introductory session when the client explains the problem, asks whether you could help, and how much it would cost…. Often the client will set up an appointment to show you the policy and give you a retainer. The appointment is missed. …

You may write to the client to set up another meeting or you may phone when the client is out of town. As the weeks pass the phantom client becomes a fading memory – the client who did not come back. When the phantom client reappears to ask how the case is going you cannot recall the client’s name. There is no case at all and the limitation period has passed.…

The only way to avoid this type of claim is at the time the client is first in your office, or has just failed to show up for a follow-up appointment. After that it is too late. The way to avoid this type of claim is simple. Write to the potential client (or better yet have the client sign a form in your office) saying that you will not be retained until you receive written instructions or a monetary retainer. At the same time advise the client that if you are not retained, another lawyer should be consulted immediately because of the limitation period involved. Following these simple steps will protect you from the return of the phantom client and its plaintive calls for help….

This advice is as appropriate today as it was eighteen years ago.

Although not a recent claim, the Ontario Court of Appeal decision in Coughlin v. Comery, [1998] O.J. No. 4066 (Ont.C.A.),
(www.canlii.org/en/on/onca/doc/1998/1998canlii1222/1998canlii1222.html) provides some guidance. This case supports the proposition that the onus is on the solicitor who seeks to limit the scope of his/her retainer, and where there is an ambiguity or doubt it will, generally, be resolved in favour of the client. Fortunately for the solicitor, he was able to demonstrate that he was retained solely to pursue his client’s claim for disability benefits. He was NOT retained to prosecute his client’s tort claim. Although LAWPRO successfully defended the solicitor, it was a very costly and time-consuming lawsuit. The lesson: If a lawyer accepts a retainer, he or she should carefully document the scope of that retainer.

The red flags should also go up when one family member wishes to retain a solicitor not only on his own behalf, but purportedly on behalf of other family members. A solicitor cannot assume that it is safe to accept such instructions. The “instructing” client may have no authority to retain counsel on behalf of anyone else. Or he may have a conflict of interest with the other family members, making it impossible for counsel to represent everyone. A recent example of this scenario is Gallop v. Abdoulah matter.

Lawyers must be vigilant about documenting the existence or non-existence of retainers. If a lawyer gives advice on the telephone, she should record what advice was given. If a retainer is accepted, he should document the scope of the retainer. If a family member purports to instruct a solicitor on behalf of others, the solicitor must carefully consider whether to accept these instructions.

We are now in a new century, but these types of claims remain a perennial difficulty. The phantom client is still with us. Be aware, and take steps to protect yourself if the phantom client reappears.

This article by Debra Rolph appeared in the Fall 2008 issue of LAWPRO Magazine. All past issues of LAWPRO Magazine can be found at www.lawpro.ca/magazinearchives

What keeps family lawyers up at night? Providing effective service while managing expectations

October 28, 2014 By: TimLemieux Category: Family law

Like many areas of practice, family law is going through a period of change. Both clients and their lawyers are questioning traditional modes of practice. Economic woes both cause legal problems, and leave clients with limited resources with which to resolve them. Stress – for both families in crisis and for their lawyers – is a constant reality. Still, within this challenging climate, family lawyers are expected to work diligently and professionally in the service of their clients’ interests.

To understand how the bar is coping with the demands of modern family law practice, we invited a sampling of lawyers from across the province to answer the question “What keeps you up at night?”

Mary M.S. Fox is a partner in the Windsor firm of Ducharme, Fox LLP. She practises family law with emphasis on financial issues involving business owners and professionals.

The problem
What keeps me up at night is ensuring that I remain an effective problem-solver given factual, legal and procedural challenges in the complex area of family law. The nightmares occur when I envision complaints to the Law Society, assessment of accounts or a requirement to defend a statement of claim.

What helps
I try to remain current on the law and procedure, to manage client expectations, and to be considerate, courteous and a good listener. The real challenge is to do so in a timely and cost-effective manner given the complexities of today’s families and our duties and responsibilities. Navigating the long and winding road and minimizing professional risk and liability force me to stay focused, work hard, be realistic and find effective ways of dealing with stress while maintaining a balance in life.

The broader challenge
The most significant practical challenge the family law bar faces is maintaining its relevancy. The expectations of our clients, our roles as lawyers and the skills required to remain effective problem-solvers are changing at a rapid pace. The well-off are buying “private justice” with mediation and arbitration. Others are supported by the taxpayer: legal aid, self-represented and unrepresented. Our courthouses are akin to hospital emergency rooms: expected to serve all who enter.

The obligations on lawyers mean that the cost of legal services is prohibitive for most people. How do we deliver a quality service at an affordable price when client expectations, no matter how well managed, often remain unrealistic? When a client does not like the result, his or her first step is to complain about everyone involved, including the lawyer. Lawyers must nevertheless rise to the occasion, tackle the challenges and justify how we bring real value to the way in which we resolve complex family problems.

Advice for new lawyers
Speak to those who have done it successfully. Establish a network of individuals known for modelling best practices, and seek their guidance and advice. Most lawyers are willing to help if asked. Do not assume you can do this alone if you intend to do it well.

The full article can be found in the August 2012 issue of LAWPRO Magazine. All past LAWPRO Magazine articles can be found at www.lawpro.ca/magazinearchives

Breach of copyright agreement scam using the names Rab John and Ikeda Publishing

October 28, 2014 By: FraudInfo Category: Confirmed frauds

A North Carolina firm reported to us that they’ve been contacted by the purported Rab John of Ikeda Publishing Co with regards to retaining their services to collect on a breach of an IP agreement.

This is a classic bad cheque scam that presents as legal matter requiring the assistance of a lawyer. In this scam lawyers will be duped into wiring real funds from their trust accounts after depositing a fake cheque received as payment from the party in breach of the agreement (who is also part of the fraud). See our Confirmed Fraud Page for more of an explanation of how these frauds work and to see other names associated with it. Our Fraud Fact Sheet lists the red flags of a bogus legal matter that is really a fraud.

Ikeda Publishing Co appears to be a real company whose name is being used in this fraud.

Here is the initial contact email sent by the fraudster to the lawyer:

From: Rab John [mailto:rjohn00000@gmail.com]
Sent: Tuesday, October 28, 2014 6:13 AM
To:
Subject: Copyright Agreement

Dear Alice Carmichael Richey ,

Advise us of your availability to help us. We have a breach of Copyright Agreement matter in your jurisdiction.

Yours Sincerely

Mr. Rab John
Ikeda Publishing Co., Ltd.
43, Bentencho, Shinjuku-ku,Tokyo
TEL: 03-3269-6841
Email: ikedapublishing_th@excite.com
ikadapublishing.th@gmail.com

http://www.ikedashoten.co.jp

How to handle a real or suspected fraud Read the rest of this entry →

Demystifying condominiums with better communication

October 27, 2014 By: TimLemieux Category: Real estate

This article by Mahwash Khan (Training and Communications Counsel at LAWPRO) originally appeared in the October 10 issue of The Lawyers Weekly published by LexisNexis Canada Inc.

The single biggest problem in communication is the illusion that it has taken place.
~ George Bernard Shaw

Many people start their home ownership journey by purchasing a condominium unit. Others downsize to a condominium later in life. As first-time condominium buyers, they may be unfamiliar with the operation and documentation of a condominium corporation.

Communicating these details is key to helping clients understand what they are getting into and will help minimize your risk of a malpractice claim. As a first step: send a detailed retainer letter and ensure you set out what you will or will not be doing (e.g. providing advice on the budget and financial statements) and what the client is responsible for (e.g. viewing the parking or shared areas for adequacy). As a final step: send a reporting letter that confirms specific discussions with your client. A reporting letter can be your best defence in the event of a claim.

It may be useful to explain that condominium units are individually owned while common elements are co-owned with other unit owners. Parking and storage spaces are either created as units or they form part of the common elements (for the use of a specific dwelling unit). The condominium corporation operates the condominium, and unit owners elect a board of directors to oversee the running of the condominium corporation.

Reviewing condominium documents with your client and explaining the nuances of condominium ownership in accordance with current standards of practice is your professional responsibility. Below are some issues to keep in mind for resale condominium purchases.

Status Certificate
The status certificate (in some provinces, an estoppel or strata information certificate) is one of the most important documents in a condominium transaction. Most offers are conditional upon the review of a status certificate and it is critical to review it with your clients to their satisfaction. If the status certificate is unsatisfactory and the offer is conditional on its review – point out the option of terminating the deal. If it is not current (for example, it is more than 30 days old), it may be missing up-to-date information and it should be updated before closing. Insurance documents for the condominium, copies of the declaration, rules and by-laws, the budget for the current year and other documents respecting the condominium should be delivered with the status certificate, depending on specific requirements in individual provinces.

Some key status certificate issues for your clients to understand include:

  • whether the dwelling unit, parking and/or locker(s) match the agreement of purchase and sale;
  • arrears or contemplated increases in common expenses;
  • existing or contemplated special assessments against the unit;
  • litigation involving the condominium corporation;
  • insurance maintained by the condominium corporation;
  • amount in the reserve fund;
  • the reserve fund study and its possible impact on the reserve fund; and
  • auditors’ comments on the financial statements.

Condominium declaration, rules and by-laws
These documents make up the condominium constitution and often cause the most confusion.

It is good practice to review the condominium plans with your client – before closing – to confirm that the location and elevation of the unit meets the client’s expectations (sometimes the unit numbers and levels in the agreement of purchase and sale are incorrect). The location of the parking and locker spaces should also be reviewed to ensure that the numbers posted in the parking garage correspond with the condominium plan and/or agreement of purchase and sale. Determine whether the parking/lockers are units or exclusive use common elements. Discuss the boundaries between the unit and common elements and advise clients of their maintenance and repair obligations pertaining to each. Also draw their attention to the costs that are included in common expenses versus those that they must pay directly (for e.g. utilities, cable, etc.) and compare these to the corresponding clause in the agreement of purchase and sale for any disparity.

An opportunity to provide value added services
As their trusted advisor, your clients rely on you to give them information they may not even realize they need. Consider the following and confirm who will do what, as applicable:

  • Highlight any lifestyle or use restrictions, such as restrictions on pets or the use of the unit for business, or on the ability to sell or lease parking or locker units separately from the residential unit;
  • The condominium corporation maintains insurance coverage which only covers the standard unit as defined in the declaration. Recommend that your clients obtain their own insurance for personal effects and liability as well as for upgrades and improvements to the unit;
  • Explain that, as owners, your clients have a say in decisions of the condominium corporation through voting. To be able to vote, they must be on record and the property manager for the condominium corporation needs to be notified of the change of ownership;
  • Any changes to the common elements, including exclusive use common elements such as balconies or yards, require approval from the board of directors. If the unit being purchased has been upgraded, inquire whether the changes were approved;
  • Elevator bookings (if applicable) and move-ins need to be arranged in advance with the property manager/administrator;
  • Recommend a home inspection for the unit (if provided for in the agreement of purchase and sale); and
    Recommend title insurance with a condominium endorsement, and ensure that the policy includes the correct legal description for each of the dwelling unit, parking and lockers (assuming the parking and lockers are separate units).

Attending to these details may seem obvious but it is easy to let one or two slip through the cracks. A checklist can be a valuable risk management tool to help keep track, while enabling effective communication with clients. In Ontario, the Working Group on Lawyers and Real Estate is developing a Master Chart to help document client discussions about resale condominium purchase transactions while doubling as a checklist. Also, under development are various precedent documents for condominium transactions. Visit lawyersworkinggroup.com to view the draft documents and make comments.

Homewood Human Solutions e-Courses can now be claimed for the LAWPRO Risk Management credit

October 24, 2014 By: TimLemieux Category: Announcements, Wellness and balance

MAP

As maintaining good mental health and coping well with stress helps lawyers avoid claims, LAWPRO financially supports the Law Society’s Member Assistance Program (MAP), which is administered by Homewood Human Solutions (HHS).

As of September 16, 2014, e-Courses offered on the HHS site will now be approved for the LAWPRO Risk Management credit. The approved e-Courses address issues including managing stress, managing alcohol and substance consumption, coping with financial pressures, and managing working relationships.

All the e-courses are 2 hours, with a 60 minute video (a voice-over with slides you can navigate to different ‘chapters’) and a downloadable PDF workbook (a few examples are attached below) that takes an estimated 60 minutes to complete. Each also offers links to additional resources that tie into the subject.

Here are the e-Courses currently available:

  • Embracing Workplace Change
  • Taking Control of Alcohol Use
  • Resilience
  • Preparing For Your Retirement
  • Taking Control of Stress
  • Taking Control of Anger
  • Taking Control of Your Money
  • Fundamentals of Effective Supervision
  • Responsible Optimism
  • Taking Control Of Your Career
  • Taking Control of Job Loss and Transition
  • Taking Control of Your Mood
  • Leading the Human Side of Change
  • Managing Sensitive Employee Issues
  • Values-based Leadership
  • Resolving Conflict in Intimate Relationships
  • Respect In The Workplace
  • Stop Smoking: Get Your Life Back!
  • Supporting Respect in the Workplace
  • Foundations of Effective Parenting

The program credits can be claimed by selecting “Credit for a Homewood e-Course offered through the LSUC Member Assistance Plan” on the Risk Management Credit declaration page. One credit ($50) per policy year can be claimed for completing an e-Course.

What keeps family law lawyers up at night? High-conflict cases

October 23, 2014 By: TimLemieux Category: Uncategorized

Like many areas of practice, family law is going through a period of change. Both clients and their lawyers are questioning traditional modes of practice. Economic woes both cause legal problems, and leave clients with limited resources with which to resolve them. Stress – for both families in crisis and for their lawyers – is a constant reality. Still, within this challenging climate, family lawyers are expected to work diligently and professionally in the service of their clients’ interests.

To understand how the bar is coping with the demands of modern family law practice, we invited a sampling of lawyers from across the province to answer the question “What keeps you up at night?”

Rachel E. Baron is a sole practitioner in Toronto, practising family law with particular emphasis on marriage contracts and cohabitation agreements, custody, support and property disputes.

The problem
High conflict cases can cause a lawyer to lose sleep. In a family law crisis, clients are often overwhelmed with emotional and financial issues. Unreasonable and difficult counsel can also cause further conflict, increasing stress on the lawyer and costs for the clients.

What helps
It is important to refer clients to the appropriate resources so that they can obtain the emotional help that they require due to their situations. It is critical for the lawyer to remain objective and professional. However, one must also be aware of the client’s social problems and deal with clients effectively and with empathy at an extremely difficult time in their lives – all without losing one’s objectivity.

A trusting relationship between opposing lawyers can help the parties work towards a resolution. When other lawyers see you as cooperative, it is easier to create an environment in which constructive solutions are possible, even in circumstances where the clients cannot solve the problem themselves.

The broader challenge
I believe the most significant practical challenge for the family bar in the next decade is the diversity of our population and cultural differences in Canada. Language barriers and cultural issues and differences will become more prevalent. It will be critical that lawyers understand and communicate effectively with their clients.

Advice for new lawyers
Learn to negotiate amicably with other counsel and deal with matters with honesty and integrity. The lawyer must be cooperative and respectful of other counsel and clients, and must remain organized, conscientious, meticulous and diligent in meeting all deadlines.

The full article can be found in the August 2012 issue of LAWPRO Magazine. All past LAWPRO Magazine articles can be found at www.lawpro.ca/magazinearchives