Innovative lawyer behind Real Estate Lawyers.ca LLP cleared again of advertising misconduct
Law Society Tribunal's appeal division backs decision to dismiss all allegations against Shayle Rothman, grant him $46,000 in costs
The defence counsel for a real estate law innovator cleared of professional misconduct says he hopes the Law Society of Ontario has finally ended its pursuit of his client after a disciplinary appeal panel upheld the decision to dismiss the case against him.
Gavin MacKenzie acted for Shayle Rothman, the founder of Real Estate Lawyers.ca LLP, as he successfully resisted a professional misconduct case over the firm’s aggressive advertising strategy at the Law Society Tribunal’s original hearing in 2019, and more recently before its appeal division.
Judicial review at the Divisional Court would be the next stage of the process if the LSO wishes to pursue another appeal - a spokesperson for the regulator says the decision is still under review.
“I’m sure it will not go any further,” MacKenzie, the founder of MacKenzie Barristers in Toronto, tells Court Report Canada. “In fact, I was very disappointed that they decided to appeal the original decision. In retrospect, I’m sure the law society agrees it was a mistake to take it any further after the tribunal decided there was nothing to the case.”
MacKenzie also hailed the appeal panel’s decision not to interfere with a $46,000 costs award made in favour of Rothman by the original hearing panel after it concluded that most of the allegations against him were “unwarranted.”
Still, that amounted to just a fraction of Rothman’s actual defence costs, which totalled $190,000 before the appeal had even begun.
In addition, MacKenzie says the case directly interfered with Rothman’s practice over many years because certain mortgage lenders refuse to deal with lawyers who have conduct proceedings pending.
“I think it’s important that officials at the law society be sensitive to the devastating effect on a lawyer of commencing a discipline proceeding, and that they only be brought where the allegations are serious and supported by the evidence,” he says. “The law society has rightly pursued lawyers who said misleading or untrue things in their advertising, but this isn’t that kind of case at all.
“It’s a mystery to me why Mr. Rothman is the lawyer that the law society decided to target,” MacKenzie adds.
According to the tribunal’s rulings, Rothman launched his real estate practice under the name Parnes Rothman LLP following his 2007 call to the bar. Within years, he was running what the hearing division called a “21st Century law firm,” having developed a competitive fixed-price service based on a high volume of business, a provincewide network of offices, expansive marketing and online access.
However, the law society began to take notice after Rothman purchased the domain name realestatelawyers.ca and started building his brand around the website in 2014.
At the tribunal, the LSO was anxious to emphasize that it had no issues with Rothman’s attempted innovations, but claimed he went over the top with some of his advertising practices in a series of allegations and sub-allegations.
However, a majority of the hearing panel was not convinced by the law society’s claim that the firm name Real Estate Lawyers.ca LLP was misleading for suggesting a directory of real estate lawyers in Canada, as opposed to a specific law firm. A dissenting member of the tribunal concluded the descriptive and generic nature of the firm’s name would confuse an ordinary consumer of real estate legal services, but the five-member appeal panel backed the majority’s finding.
Both divisions of the tribunal also rejected the LSO’s allegation that the firm’s claim it “specialized” in real estate violated the rule against lawyers advertising themselves as “specialists” in particular fields unless they have been certified as such by the law society.
Indeed, the appeal panel took the opportunity to close the debate on the issue, which had drawn divergent rulings from hearing panels in disciplinary cases, by narrowing the prohibition in cases where lawyers focus much of their practice on one area of law. In Rothman’s case, 90 per cent of his work involved real estate.
“Rule 4.3-1, targeted at a particular certification designation, lends itself to a specific prohibition, and that has been done: the use of the word ‘specialist,’” wrote Linda Rothstein, the appeal panel chair. “What is prohibited, in other words, is the use of a term of art, not the truthful and accurate use of everyday language. Saying ‘I specialize in this area’ is a common representation that is made, for example, across the commercial, professional and educational world.”
The single sub-allegation established by the law society concerned two 2016 mailers in which Rothman advertised his legal fees without specifying that disbursements were extra. However, having dismissed the rest of the law society’s allegations, the original hearing panel converted the proceeding to an invitation to attend and dismissed the entire professional misconduct case against Rothman, concluding that it would never have been authorized had this “minor mistake” been the only infraction alleged against him.
When it came to the costs award, the appeal division could find no error in the hearing panel’s conclusion that Rothman had met the extremely high threshold required for such an award.
The original panel found most of the law society’s allegations were unwarranted, meaning they were launched without reasonable justification. These included groundless particulars related to marketing content regarding the pricing, size and experience of the firm, as well as a claim that Rothman had flouted an earlier bencher committee ruling on the firm’s name.
“In our view, the panel applied the relevant rules and well-established costs principles in making a highly discretionary ruling. Its application of the established law to the circumstances before it deserves great deference. The panel made no error in principle, and no palpable and overriding error within the meaning of the jurisprudence,” wrote Rothstein for the appeal panel.
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