News

The Federation of Law Societies of Canada has serious concerns about the future of independent lawyer regulation in British Columbia following the tabling on April 10th Bill 21 – Legal Professions Act by the Government of British Columbia.

Based on a preliminary review of the proposed legislation, the Federation shares the concerns of the Law Society of British Columbia that the tabled legislation, which will create a single regulator for lawyers, notaries public and regulated paralegals, fails to adequately ensure the independence of the legal professions and their regulation, in keeping with core democratic principles.

In correspondence to the BC Attorney General earlier this year, Federation President Erin Kleisinger, K.C. urged the government to engage in meaningful consultation prior to finalizing its proposal for a single regulator of the BC legal professions.

“Now that the bill has been tabled, it will be important for the democratic process to play out in a way that allows robust consultation and debate on its specific provisions,” said President Kleisinger.

Addressing the significance of the proposed regulatory reform for legal regulators across Canada, President Kleisinger said, “Legislative intrusion upon the independence of the legal professions has serious national implications. The Federation will be consulting with its members as it considers a possible further response to the Bill.”

The Federation of Law Societies of Canada is the national association of the 14 law societies mandated by the provinces and territories to regulate Canada’s legal profession in the public interest. It is the body through which Canada’s law societies collaborate at the national level, share information on trends and issues affecting the legal profession, and engage in collective action and decision-making.

The Federation is also the law societies’ national and international voice on important issues related to the regulation and core values of the legal profession. For more information on the Federation, please visit our web site at www.flsc.ca.

For more information about this release, or to acquire a high-resolution photograph of the Federation President, please contact:

Alex Bolt
Director, Policy and Public Affairs
Federation of Law Societies of Canada
abolt@flsc.ca

The Supreme Court of British Columbia has ruled that there will be no retroactive application of the mandatory disclosure provisions of the Income Tax Act that are the subject of a constitutional challenge launched by the Federation of Law Societies of Canada. An application for an injunction suspending application of the provisions to legal professionals pending the outcome of the litigation was granted in late November 2023.  

A disagreement over the scope of the injunction delayed the issuing of the official Order by the Court. On March 13, 2024 Justice Warren ruled in the Federation’s favour, dismissing the government’s argument that in the event the constitutional challenge fails, legal professionals would be required to file disclosures for any reportable transactions occurring while the injunction was in effect. As a result, should the Court rule against the Federation on the merits of the challenge legal professionals would be required to make disclosures only for transactions for which the reporting obligation arises after the date of the final decision. A copy of the injunction Order is available here.

The Federation launched its challenge to amendments to the Income Tax Act expanding mandatory disclosure obligations and creating a new category of notifiable transactions in September 2023.  The amendments came into force at the end of June 2023. The provisions, which require taxpayers and advisors, including legal counsel, to report to the CRA on transactions that may constitute aggressive tax planning, purport to compel legal counsel to disclose confidential and potentially privileged client information to the government and undermine the duty of loyalty owed by members of the legal profession to their clients.

A date has not yet been set for a hearing on the merits of the Federation’s petition. A Backgrounder with additional information on the constitutional challenge is available here.

The Standing Committee on the Model Code of Professional Conduct of the Federation of Law Societies of Canada has extended the review period for proposed changes to the Model Code of Professional Conduct from May 31, 2024 to November 29, 2024 to ensure there is adequate time for meaningful consideration and discussion of the proposed changes.

The Model Code was developed by the Federation to synchronize, as much as possible, the ethical and professional conduct standards for the legal profession across Canada. The proposed amendments address the issues raised in and underlying the Truth and Reconciliation Commission’s Call to Action 27. The consultation invites input on the proposed amendments from a broad spectrum of Canada’s legal community including Indigenous individuals and organizations, the legal academy, law societies, and practitioners. Comments should be sent to consultations@flsc.ca

The Supreme Court of British Columbia today (November 24, 2023)  granted an injunction suspending the application of recently expanded mandatory reporting obligations in the Income Tax Act to members of the legal profession pending the outcome of litigation challenging the constitutionality of the provisions.  

The Federation of Law Societies of Canada filed the legal challenge on September 11, 2023. A consent injunction obtained by the Federation was scheduled to expire on December 1st, 2023.

The Federation is challenging the constitutionality of amendments to the Act that expanded existing mandatory disclosure obligations, created a new category of notifiable transactions, and delete a provision that relieved parties from the disclosure obligation when it had been fulfilled by another party to the transaction. The amendments came into force at the end of June. 

The provisions, which require taxpayers and advisors, including legal counsel, to report to the Canada Revenue Agency on transactions that may constitute aggressive tax planning, purported to compel legal counsel to disclose confidential and potentially privileged client information to the government and undermine the duty of loyalty owed by members of the legal profession to their clients. A copy of the November 24th decision is available here.

A Backgrounder with additional information on the Federation’s constitutional challenge is available here. The Federation’s pleadings are here. The government’s pleadings are here.

The Federation of Law Societies of Canada is pleased to announce the launch of its online learning program, “Anti-Money Laundering and Terrorist Financing in the Canadian Legal Profession”.

Developed as part of the long-standing commitment of the Federation and its members, Canada’s legal regulators, to the fight against money laundering and the financing of terrorism, the program is designed to enhance the ability of legal professionals to understand and respond appropriately to money laundering and terrorist financing risks.

“The Federation and the law societies take seriously their responsibility to address money laundering and terrorist financing risks faced by legal professions and have demonstrated their commitment in this area by developing and implementing robust anti-money laundering regulation,” said Federation President Jill Perry.

“Providing comprehensive educational materials for legal professionals is another key element of our anti-money laundering work. This online program is an important addition to the resources available to legal professionals.”

The program consists of five interactive modules. Together, the modules provide an overview of the problem of money laundering and terrorist financing, the risks that may be faced by legal professionals, key due diligence obligations under law society anti-money laundering and terrorist financing rules and regulations, proper use of trust accounts, and restrictions on cash transactions.

This educational program is part of a suite of initiatives undertaken by the Federation over the past 20 years to address the risks of money laundering and terrorist financing that can arise in the practice of law. These initiatives include the development of model rules limiting the ability of legal professionals to accept cash, imposing extensive client identification and verification obligations, and limiting the use of professional trust accounts; providing guidance to law societies on the enforcement of those rules; providing guidance and educational materials to the profession; and engaging with the Department of Finance to ensure that Canada’s anti-money laundering regime is strong.

The program is available on the Federation’s public website.

The Federation is the national association of the 14 regulators of the legal profession in Canada. Our member law societies are mandated by legislation in each province and territory with the responsibility for regulating more than 141,000 lawyers, 3,850 notaries in Quebec, and Ontario’s 10,600 licensed paralegals in the public interest. An important role of the Federation is to express the views of the law societies on national and international issues relating to the administration of justice and the rule of law.