Steinecke Maciura LeBlanc Barristers & Solicitors


	Newsletters
	Grey Areas


	Investigation Powers
	by Richard Steinecke
	November 2006 - No. 105

	One of the more intrusive powers regulators have is to conduct investigations. Investigations result in the disruption of professional practices as documents are requested and witnesses interviewed. Investigations can become known to clients and the wider community as those asked to assist learn about the official inquiry. Those who are the subject of investigations often find it to be a stressful experience. The October 26, 2006 decision of the Supreme Court of Canada of Pharmascience Inc. v. Binet, 2006 SCC 48 provides useful insights from Canada’s highest court on investigations by professional regulators. The Supreme Court of Canada re-affirmed the broad right and, indeed duty, of regulators to conduct wide-ranging investigations. The case arose in 2003 when a scandal involving a large number of Quebec pharmacy owners received extensive coverage in the Quebec media. It was alleged that the owners had unlawfully received rebates, discounts and other financial benefits from generic drug manufacturers in exchange for orders for drugs. The office that conducts investigations and initiates discipline proceedings in Quebec, the syndic, wanted to inquire into the concerns. In addition to media reports, the syndic had information from a court case and from a government agency indicating that there had been widespread conferral of benefits to pharmacists by drug companies. If true, the conduct would be a conflict of interest. However, the syndic did not know which pharmacists were involved. The syndic requested the drug companies, particularly Pharmascience, to provide information about any benefits it conferred. Pharmascience refused. The syndic sought an injunction compelling Pharmascience to provide the information. The majority of the Supreme Court of Canada upheld the granting of the injunction. The first issue was whether the duty to provide information applied to third parties, or just to the regulated members. The authorizing provision was ambiguous. It read as follows: 122. The syndic and assistant syndics may, following an [sic] information to the effect that a professional is guilty of an offence contemplated in section 116, inquire into the matter and require that they be provided with any information or document relating to such inquiry…. In resolving this ambiguity, the majority of the court considered the importance of effective professional regulation and the purpose of the investigative powers. The majority said as follows: The lodging of a complaint with the committee on discipline is a possible outcome of the syndic’s inquiry. For the professional concerned, the mere fact that a complaint has been lodged can sometimes have a serious impact on his or her reputation and ability to practise. In order to conduct an effective investigation while bearing in mind and upholding the rights of everyone with an interest in the outcome, the syndic must be able to require relevant documents and information from anyone, not just from professionals…. Obtaining information in the possession of third parties appears often to be essential to the effective conduct of a syndic’s inquiry. Although only the professional accused of a violation of the Code of ethics might eventually be summoned before the committee on discipline, situations likely to give rise to disciplinary complaints will often involve third parties in one way or another. The majority went on to say: The offence for which certain pharmacists are being investigated in the case at bar, that is, “receiv[ing] . . . [a] benefit, allowance or commission” (s. 3.05.06 Code of ethics), is no exception [to the concept that third parties may be involved in investigations]. The benefit is received from another person. Logically, an inquiry into the commission of an offence would therefore have to extend to third parties. Other examples can be used to illustrate this. For instance, a syndic might need to obtain information from a nurse or orderly who witnessed certain events in order to determine whether a sexual harassment complaint should be lodged against a doctor. Also, a syndic’s investigation might require access to information held by a bank or an accountant on a lawyer’s improper use of a trust account. A second issue was whether the syndic had to identify an individual practitioner before it could launch an investigation. In other words, could an investigation begin before the syndic knew which practitioners were likely involved? The majority stated as follows: The information upon which a syndic relies must raise a suspicion that an offence has been committed. However, at this stage, the syndic need not be in a position to identify exactly which professionals are under suspicion. The individualized process provided for in the Professional Code is the lodging of a disciplinary complaint with the committee on discipline. The syndic’s inquiry precedes this process and is aimed at determining whether a complaint should be lodged. The Court also had no difficulty with the fact that the investigation was instituted without someone first making a formal complaint: The Code does not specify the nature or the source of the information that may justify holding an inquiry. As a general rule, a member of the public will contact a professional order to complain about a professional. In making the receipt of “information” a precondition, however, the legislature contemplated the possibility of the likely commission of an offence being brought to a syndic’s attention by other means. It would have been surprising if this were not the case, given the fact that the syndic may act on his or her own initiative. Thus, there is nothing to prevent a syndic from personally taking cognizance, by reading newspapers or court pleadings, for example, of information that might give rise to an inquiry. In some respects, the Court’s view of the investigative powers of professional regulators flows from its decision of Finney v. Barreau du Québec, [2004] 2 S.C.R. 17. In that case the Court upheld the civil liability of the professional regulator for failing to act on a timely basis on serious concerns of a lawyer’s professional misconduct. If professional regulators are to be held accountable for their inaction, they need to be given the tools to do their job: … it should be expected … that individuals with not only the power, but also the duty, to inquire into a professional’s conduct will have sufficiently effective means at their disposal to gather all information relevant to determining whether a complaint should be lodged. The Pharmascience case must be read cautiously. The result turned on the wording of the provisions authorizing and supporting the investigation. Those provisions are different for each regulator. For example, some provisions appear to require the identity of the practitioner being investigated. The case is also interesting in its description of the legal framework for the regulation of professions in Quebec. The Quebec system is unique in Canada. The historical bases for the development of that regulatory system are also described in the judgment. A copy of the Pharmascience case may be found at: http://scc.lexum.umontreal.ca/en/2006/2006scc48/2006scc48.html.



	Subscribe to this newsletter

	FOR MORE INFORMATION This newsletter is published by Steinecke Maciura LeBlanc, a law firm practising in the field of professional regulation. If you are not receiving a copy and would like one, please contact: Richard Steinecke, Steinecke Maciura LeBlanc, 401 Bay Street, Suite 2308, P.O. Box 23, Toronto, ON M5H 2Y4, Telephone: 416-626-6897 Facsimile: 416-593-7867, E-Mail: rsteinecke@sml-law.com WANT TO REPRINT AN ARTICLE A number of readers have asked to reprint articles in their own newsletters. Our policy is that readers may reprint an article as long as credit is given to both the newsletter and the firm. Please send us a copy of the issue of the newsletter which contains a reprint from Grey Areas.