While the arrest of lawyer Meerai Cho last week is certainly a major concern for the property buyers who’ve lost their deposits, the case is a good opportunity to look at options for protecting the public.
The case isn’t the first one where trust money has gone missing. Last year, the Heydary group of law firms collapsed after lawyer Javad Heydary, now deceased, disappeared amid allegations of missing client funds. In Cho’s case, it’s unclear exactly what happened as she maintains she mistakenly transferred the money to the developer before she should have while police who laid 75 charges against her last week cast doubt on her claims when they said they’d seen no evidence to back them up.
But in light of the case, lawyers are asking whether it’s time to institute a rule requiring two signatures on trust accounts. It’s not a panacea since the second person could still go along with a dubious withdrawal or transaction but it would add an extra layer of protection. Many law firms require more than one signature, something that’s of course more feasible when there are lots of lawyers and staff who work there. Putting such a rule in place would be challenging for many sole practitioners.
But with cases like Cho’s and the Heydary situation casting doubt on whether the rules truly do protect the public, it’s time for a discussion on additional measures. Most lawyers presumably could find someone else they can trust to sign on their accounts, and in those rare instances where that’s impossible, such as in very remote areas, there are probably exemptions and other protections the Law Society of Upper Canada could put in place.
While there’s no proof of Cho’s guilt in the matter, the case is a reminder of lawyers’ authority over significant sums of money with the concomitant prospect of losing it either by mistake or by design. While such cases are rare enough, we have up to 141 property buyers who’ve lost millions of dollars and will now likely be bringing claims to LawPRO and the LSUC’s compensation fund. It’s time for a look at whether the law society should do more to prevent these situations. While the most recent case is troubling, it’s also a chance to consider further options to protect the public.
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Glenn Kauth
For more, see "
Actions against Cho proliferate" and "
Lawyer under fire after $15M in condo deposits goes missing."
