In its recent judgment rendered in Green v Law Society of Manitoba[1] (“Green”), the Supreme Court of Canada continued the deferential approach it has taken in earlier jurisprudence to regulatory rules enacted by professional regulatory bodies.

The judgment in Green arose from a challenge to rules enacted by the Law Society of Manitoba, requiring practising lawyers to complete 12 hours of Continuing Professional Development (“CPD”) each year, and imposing suspensions on lawyers who failed to do so. The applicant had practised law in Manitoba for more than 60 years. When he failed to report any CPD hours in 2012 and 2013, the Law Society’s CEO asked the applicant to comply with the CPD requirements within 60 days, failing which he would be suspended.

The applicant sought a declaration that the foregoing rules were invalid. He argued that the relevant rules were not authorized by the Legal Profession Act (the “Act”)[2], and also violated the rules of natural justice since they authorized the Law Society to suspend lawyers without any hearing or right of appeal.[3]

Standard of Review Applicable to Rules and Regulations Passed by Professional Regulatory Bodies

The majority opinion[4] found that the standard applicable to the review of rules passed by the Law Society was reasonableness. Such delegated legislation to be set aside only if “no reasonable body informed by [the relevant factors] could have [enacted]” them. In other words, “the substance of [law society rules] must conform to the rationale of the statutory regime set up by the legislature.”[5]

The majority opinion also outlined the rationale for adopting a deferential standard to the review of rules passed by the Law Society. Such rules are akin to bylaws passed by municipal councils. Municipal bylaws affect the general community and are legislative rather than adjudicative in nature. Analogously, the Legislature had delegated to the Law Society a broad discretion to regulate the legal profession based on a number of policy considerations related to the public interest. The Law Society benchers were thus acting in a legislative capacity when they passed rules of general application to the profession.[6]

Furthermore, the general principles with respect to standard of review also supported the adoption of a deferential standard. The Law Society had acted pursuant to its enabling statute in passing the rules mandating CPD and imposing penalties for non-compliance. Self-governing professional bodies have particular expertise in deciding the policies and procedures which govern the practice of their professions.[7]

Reasonableness of Professional Development Requirements and Penalties for Non-Compliance

The majority opinion found that the CPD requirements and the automatic suspension of lawyers who failed to comply were reasonable. The Law Society has a broad statutory mandate to protect the public interest in the delivery of legal services. In pursuing that purpose, the Act required the Law Society to establish standards for the education of persons practicing law in Manitoba, vested the Law Society with rule-making authority to achieve public interest objectives, and expressly permitted the Law Society to establish a CPD program. The Act also authorized the Law Society to establish consequences for violations of the Act or the derivative rules enacted by the Law Society. A suspension was a reasonable way to ensure that lawyers complied with the CPD program.[8]

The majority opinion also concluded that it was reasonable for the rules to suspend a lawyer who failed to comply with the CPD requirements without a hearing or a right of appeal. The suspension was administrative and not disciplinary in nature. It was reported and recorded differently than suspensions of a disciplinary nature, and would come to an end as soon as the lawyer complied with CPD requirements. The rules vested the CEO with some discretion to reduce the harshness of any action. Particularly, prior to suspension, the CEO could send a letter to the lawyer giving him or her 60 days to comply with the CPD requirements.[9]

Although the relevant rules authorized the Law Society to automatically suspend a lawyer who failed to comply with CPD requirements, the Court noted that the rules were not to be interpreted as displacing the common law duty of procedural fairness. Generally, the duty of procedural fairness was to be treated as supplementary to duties which were expressly outlined in delegated legislation. Therefore, on judicial review, the courts could examine the specific procedure followed when a lawyer was suspended in order to determine whether the duty of procedural fairness had been violated. In Mr. Green’s case, there has been no infringement of the duty of procedural fairness since the Law Society had been prepared to grant him an extension to satisfy CPD requirements.[10]

The dissenting opinion[11] concluded, for two principal reasons, that an automatic suspension for failure to comply with the CPD requirements was unreasonable. Firstly, the rules left little discretion with the Law Society’s CEO when CPD requirements were breached. Other than granting more time to fulfil the requirements, the CEO had no option but to automatically suspend a defaulting lawyer “for the least serious professional misconduct possible – failing to attend classes.” The lack of procedural fairness stood in stark contrast to other instances of alleged professional misconduct, which provided far more protection to the member.

Secondly, the penalty of suspension was not simply “administrative” in nature. A suspension impacted the reputation and the livelihood of the member, and undermined public confidence in the lawyer’s professionalism. Therefore, the imposition of an automatic suspension was inconsistent with the Law Society’s duty to protect the public interest.[12]

Implications for Professional Regulatory Bodies

The Supreme Court of Canada’s judgment in Green indicates that the courts are likely to accord significant deference to professional regulatory bodies when they enact general rules and bylaws in furtherance of their governance mandates. The majority opinion noted that “[a]lthough the impugned rules could have included more extensive procedures … [t]his Court’s role is not to rewrite the Rules so as to include every procedural protection imaginable.” Rather, the Court’s role was “to determine whether impugned rules are reasonable in light of the Act.”[13]

In our opinion, the approach taken by the majority is consistent with a standard of reasonableness. Although the dissenting judges agreed that a standard of reasonableness applied to review of rules enacted by the Law Society, in practice they appear to have taken a less deferential approach, almost akin to a standard of correctness.

However, there remains a note of caution for professional regulatory bodies in the majority opinion. Rules and bylaws will likely be interpreted as incorporating and not abrogating common law principles of procedural fairness. Accordingly, professional regulatory bodies will still have to exercise due care in ensuring that their rules are applied to individual members in accordance with principles of procedural fairness.