The Law Society of British Columbia has suspended S.D., a practicing lawyer in Vernon, B.C., for five months due to multiple instances of professional misconduct, including the misappropriation of client funds and serious accounting violations.
The suspension is effective from June 1, 2024, to October 31, 2024.
The Chair of the Discipline Committee accepted a consent agreement proposed by S.D. under Rule 3-7.1 of the Law Society Rules. According to the agreement, S.D. admitted to a series of misconducts between 2014 and 2023. These infractions included depositing retainer and invoice payments directly into his personal bank account instead of a trust or business account, failing to report trust shortages exceeding $2,500, and providing false information in his annual Trust Reports.
S.D.’s improper handling of client funds was a primary concern. He admitted to withdrawing funds from his trust account when there were insufficient funds and failing to maintain proper accounting records. For instance, he failed to record approximately $13,000 in e-transfer payments related to client files and improperly deposited around $10,000 in retainer funds into his personal account. Such actions led to significant trust shortages that were not corrected or reported to the Executive Director of the Law Society, contravening multiple rules, including Rule 3-74.
Further compounding these issues were S.D.’s false representations in his Trust Reports from 2015 to 2020, where he incorrectly certified that his practice had filed and remitted GST, PST, employee payroll source deductions, and Trust Administration Fees in full and on time. S.D. acknowledged that his misrepresentations were due to extreme stress and anxiety.
The Discipline Committee also noted S.D.’s improper use of his trust account to receive and disburse funds unrelated to legal services. This included over $76,000 in government loan payments and wage subsidy payments. S.D. now recognizes that, with certain exceptions, funds deposited into a trust account must be directly related to legal services provided.
As part of the consent agreement, S.D. will be subject to further oversight upon his return to practice. He will only be allowed to operate a trust account with a second signatory, approved by the Executive Director of the Law Society, to prevent future misconduct.
In considering the appropriate disciplinary action, the Chair of the Discipline Committee reviewed an Agreed Statement of Facts dated April 25, 2024, S.D.’s prior professional conduct record, and recommendations from the Practice Standards Committee. The decision underscores the importance of strict adherence to trust accounting rules and the severe consequences of failing to uphold professional responsibilities.
For more information, see https://www.lawsociety.bc.ca/news-and-publications/news/vernon-lawyer-m-shane-dugas-suspended-for-five-months/
