April 9, 2017

Governance: deference by courts for bylaws made by professional regulators

Professional Regulation

The Supreme Court of Canada has upheld rules of the Law Society of Manitoba which automatically suspended a senior lawyer – one who had been practising for over sixty years –  for his failing to comply with continuing professional development (CPD) credits for 2012 and 2013. The court applied a “reasonableness” standard of review, and upheld rules that provided for an automatic administrative suspension, in Green v. Law Society of Manitoba, 2017 SCC 20.

In many ways, the decision represents a bonanza of legal propositions that confirm the wide discretion of governing bodies of self-regulating professions when passing bylaws to regulate their professions. For governing bodies in British Columbia, the Green decision effectively confirms the discretion the BC Court of Appeal accepted as applying to bylaw reviews in Sobeys West Inc. v. College of Pharmacists of British Columbia, 2016 BCCA 41 (which we examined here).

A majority of the SCC in Green accepted a reasonableness standard of review – one that provides for deference to governing bodies, such that the court should only set aside a rule or bylaw if it is one “no reasonable body” could have enacted [20]:

  • Rules made by law societies (and by extension, rules or bylaws made by other governing bodies) are “akin to bylaws passed by municipal councils” [21], in that the legislature gave the Law Society a broad discretion to regulate based on “a number of policy considerations related to the public interest”; [22]
  • The benchers of the Law Society (and by extension, elected members of councils or boards of other governing bodies) are elected, and courts must respect “the responsibility of elected representatives to serve the people who elected them”; [23]
  • The Law Society made rules by acting under its “home statute”, such that the appropriate standard is presumed to be reasonableness, and the courts had to afford it “considerable latitude in making rules based on its interpretation of the ‘public interest’ in the context of its enabling statute”; [24] and
    The Law Society has “expertise in regulating the legal profession”. [25]

Given the Law Society’s public-interest mandate, [28-29] its broad rule-making authority [31-32] and its authority to establish a system of legal education, [33] it had a power to create a CPD scheme, and necessarily had a power to enforce its standards. [42] A suspension was a reasonable way to ensure universal compliance. [47] The only remaining question was whether the rules could reasonably suspend a member without a right to a hearing or a right of appeal. [51] As the member did not judicially review the decision to suspend him, but only the reasonableness of the CPD rules, the court declined to examine the procedural fairness of the decision to suspend. [56-57]

The court found an “administrative” suspension without a right of hearing or a right of appeal reasonable. [58] The suspension was not disciplinary: “A reasonable member of the public would understand that a temporary suspension for failing to complete CPD hours is not akin to a more serious disciplinary suspension.” [59] Rather, the suspension was “administrative” in nature, as members are solely in control of complying with the rules, and report on their own compliance. A suspension ends immediately when a member complies. [62] Further, the CEO of the Law Society has discretion to ensure that the effect of the rules is not overly harsh in any given situation. [64]

(Notably, two dissenting justices objected to the automatic nature of the suspension under the Law Society’s rules [70 onward], as distinct from rules applied by law societies of other provinces [91-93], and found such provisions to be unreasonable. [96])

In response to the decision, Green told CBC News that, “It proves that even the Supreme Court of Canada can be wrong,” and said he would proudly go into retirement continuing his resistance (Mar. 30, 2017, here).

Green v. Law Society of Manitoba, 2017 SCC 20

Lisa C. Fong and Michael Ng