“It is not a right. Self-regulation is very much a privilege.” So declared Premier Christy Clark at the end of June when she announced that the BC government would take over regulation of the real estate industry in that province.
As those in BC know, the BC housing market has been on fire over the past year. Potential home buyers face a crisis of affordability. Questionable practices by some real estate agents and a failure to respond by the Real Estate Council of British Columbia (RECBC) fuelled a crisis of confidence in the regulator. And the government stepped in.
We need to be cautious about any lessons to be drawn from the BC real estate experience. It is certainly not fair to attribute the crisis of affordability to alleged lax regulation by the self-regulating RECBC. The RECBC was, perhaps, an easy target in the midst of a political firestorm. 2017 is an election year in BC and it is likely that housing affordability will continue to be a top campaign issue.
But yet self-regulation of the legal profession in Canada faces remarkably similar vulnerabilities. We have a largely unaffordable justice system where costs continue to spiral out of control. It is surprising that no grassroots indignation has yet to boil over into the political realm. Law Societies purport to regulate lawyers’ fees (Model Code Rule 3.6) but have completely abdicated responsibility on this front. The public may rightly ask why?
To their credit, Law Societies have belatedly embraced access to justice as a regulatory concern. But as cases like Groia in Ontario and Laarakker in BC show, Law Societies continue to be distracted by concerns that are unlikely to be priorities to clients or members of the public. Christy Clark could have been reminding law societies when she lectured: “The point of regulation is to protect people, to protect consumers.” All regulators need to heed this lesson, but particularly those who are self-regulating like Canadian law societies.
Law Societies have never had a problem articulating their mission; it has been uniform and consistent for over two hundred years in Canada – to regulate the practice of law in the public interest. What has been more problematic historically is how Law Societies have interpreted this mission and how they have arguably strayed from it. Regulating legal services in the public interest means protecting the public and protecting consumers; it does not mean protecting the profession against competition or protecting it against reputational harm. For everything that Law Societies do, they should be judged against this public interest mandate. Law Societies should be asked – and should be asking themselves – how their actions in a particular area and in any case protect people or protect consumers. This is why I find cases like Groia and Laarakker so frustrating. In Groia, the Law Society of Upper Canada has spent a decade prosecuting a lawyer for conduct in the courtroom that had no impact on the public or on clients. The cost to the Law Society in terms of staff time, bencher time and legal fees must be enormous; the opportunity cost of what could have been done in its stead staggering. On Laarakker, the Law Society of British Columbia completely missed the boat, targeting a lawyer who stood up for members of the public against a practice described by Alice Woolley as “extortion with letterhead”. Law Societies should be going after the abusive practice of shoplifting demand letters that has been well-documented by my colleague Amy Salyzyn. Instead, they have done nothing and allowed this abusive practice to persist for decades.
Law Societies would be wise to remember Premier Clark’s words or they may end up finding themselves listening to a similar lecture from another premier one day.