The Supreme Court of Canada recently decided that, generally speaking, regulators cannot be held responsible for losses caused by professionals regulated by them. However, a recent case in Quebec suggests that regulators may not have as much protection as the Supreme Court cases suggest. In Finney v. Barreau du Quebec, the Quebec Court of Appeal ordered the Quebec Law Society to pay $25,000 in damages to a Montreal schoolteacher for failing to adequately regulate a lawyer.

The case arose out of a ten-year legal battle that a teacher (Finney) waged against a Montreal lawyer, Belhassen. Belhassen was a Montreal lawyer whom Finney alleged drove her to near financial ruin, and subjected her to dozens of lawsuits and legal seizures while representing her ex-husband.

Finney and her lawyers lodged a number of complaints with the Law Society, beginning in the fall of 1990, over Belhassen’s alleged unethical tactics which included fabricating evidence, intimidation and threatening to drive a lawyer representing Finney into bankruptcy. Belhassen had a fairly lengthy history with the Law Society, including findings that he was incompetent, constituted a danger to his clients, was a discredit to his profession and undermined the authority of tribunals. Unfortunately, the Law Society only required that he take a 12-months training program as well as supervision.

Finney’s lawsuit was originally thrown out on the basis that she failed to prove that the Law Society acted in bad faith. However, the Court of Appeal reversed, finding that statutory immunity does not constitute a shield protecting an organization from all interventions by the Court. The Court of Appeal found that by failing to properly govern Belhussen, the Law Society "ignored its mandate, an option it did not have the discretion to choose." The Court of Appeal held that the more serious the conduct of a member is accused of, the less discretion a regulator has. The breach constituted a "civil blunder", for which the Law Society must be held accountable.

This case stands as a reminder that, despite the Supreme Court of Canada’s recent decisions, regulators can still be sued and, theoretically, sued successfully. If someone who has suffered serious damages can prove that a regulator either acted in bad faith or essentially failed to perform its functions, it may well be that a plaintiff could succeed in a civil action against the regulator for damages caused by one of its members. However, if the regulator proves that they did not act in bad faith and at least made some effort to govern a member, it will likely still be very difficult to sue regulators successfully for the actions of their members.

Professional Practice and Liability on the Net is a monthly internet newsletter addressing issues of interest to a wide range of professionals. Please consult with a lawyer for specific legal advice. If you wish to be removed from the list of subscribers, please simply reply to this email. If you wish to reprint this article, please provide appropriate credit, and send a copy of the publication to, Steinecke Maciura LeBlanc, 401 Bay Street, Suite 2308, P.O. Box 23, Toronto, ON  M5H 2Y4. Or, call 599-2200, ext. 232, or email bleblanc@sml-law.com. Comments and suggestions are also welcome.