It's your opinion, you sign it

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"It's Your Opinion, You Sign It"
and other Valid Responses from Clerks to Lawyers
Simon Crawford, Partner, Bennet Jones
Scott Azzopardi, Articling Student, Bennett Jones
NOW that the turmoil attendant upon the transference of power from one great
party in the State to another has subsided, people may be permitted to devote
their minds to a consideration of those sectional questions which are not less
important for the welfare of the persons concerned, than are the great national
issues upon which they have just pronounced judgment. Among such persons we
count the considerable body of clerks who pursue their careers of usefulness in
the law offices of the kingdom. No set of workers does better work for the
community, or does it with less display and with less hope of material reward. The
law clerk spends his life in unselfish devotion to the interests of his principal and
of his principal's clients. His labours are arduous, his responsibilities are great, but
his pay is comparatively small, and his glory nil. No one who knows him and his
work with any degree of intimacy would venture to assert that the position he
occupies in the estimation of the public is commensurate with the services that
he renders to the public, or that his remuneration reasonably approximates to the
value of such services.1
It is no secret that non-lawyer staff do an incredible amount of the heavy lifting in law firms of all
sizes and specialties. However, of all areas of law, real estate likely relies most heavily on
delegating specific tasks to skilled non-lawyer staff. There is nothing wrong with delegation. In
1
"Know All Men by These Presents" (1906) 1:1 The Law Clerk IV at IV.

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fact, delegation is a precondition to, not a consequence of, success in practice;2
and a properly
implemented systematized approach to delegation can reduce risk.3
That said, however heavily
we rely on our clerks, it is not appropriate to delegate to them all facets of real estate work. In
2016, real estate was the costliest and second most claimed in area of law for LawPRO. Clerical
and delegation errors accounted for 8% of all claims in this area.4
The rationale of upholding public confidence in the regulation of the real estate system, and
promoting the public confidence in the role of lawyers requires that delegation be managed very
carefully.5
Our obligation as lawyers is to ensure that clerks are appropriately trained and
supervised for work that can be delegated, and to bear the ultimate responsibility for our
practices.
Part I: The Supervisory Framework
(a) Clerks are not Independently Regulated
Unlike paralegals, law clerks are not separately regulated. They are indirectly regulated,
and from the perspective of the Law Society, the supervising lawyer is responsible for
their actions.
2
Edward Poll, "The Nuts and Bolts of Delegation in Law Firms: Build the Right Relationships for the Best Results" Canadian Bar Association
(September 18, 2014), online: https://www.cba.org/Publications-Resources/CBA-Practice-Link/Young-Lawyers/2014/The-Nuts-and-Bolts-of-
Delegation-in-Law-Firms-Buil.
3
See e.g. Kathleen A. Waters and Maurizio Romainin, :the Law Society of Upper Canada Residential Real Estate Transactions Practice Guidelines:
A Systematized Approach to Residential Real Estate" Quirky Conveyancing – Tools for the Modern Real Estate Lawyer (Ontario Bar Association,
February 4, 2016), online: http://www.practicepro.ca/information/doc/A-systemized-approach-to-residential-real-estate.pdf.
4
LAWPRO, "Real Estate Claims: Malpractice Fact Sheet", online: https://www.practicepro.ca/information/doc/RealEstate-FactSheet.pdf.
5
Law Society of Upper Canada v Martin Ronald Zaretsky, 2013 ONLSHP 54 at para 121.

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Law clerks may voluntarily join the Institute of Law Clerks of Ontario ("ILCO"). ILCO clerks
are subject to a Code of Ethics, which creates the following duties:
• Clerks are at all times subject to the supervision of their employing lawyer or firm, and
shall at no time represent themselves to a client as a lawyer. Clerks will not give legal
advice without the authority of the supervising lawyer;
• Clerks must discharge their duties to their lawyer and to the ultimate client with
honesty and integrity;
• Clerks should provide services to the lawyer at a minimum quality of what a lawyer
would generally expect of a competent law clerk;
• Clerks are subject to hold all information acquired in the course of the professional
relationship in strict confidence, and should not divulge any information unless
expressly authorized or required to do so;
• Clerks owe a duty to their lawyer to observe all rules and laws regarding the
preservation and safekeeping of client property entrusted to the lawyer;
• Clerks should assist in maintaining the integrity of the legal profession, and participate
in its activities to the extent permitted by the Law Society or other governing body;
• Clerks' conduct toward lawyers must be characterized by courtesy and good faith; and
• The law clerk must observe the rules set out in the Code of Ethics in spirit and in the
letter.6
By contrast, paralegals are the subject of mandatory regulations under the Law Society
Act. The license required to practice as a paralegal (P1), is one of four licenses which may
be granted under the Act.7
6
Institute of Law Clerks of Ontario, By-Law No. 16, s 1.1, online: http://www.ilco.on.ca/docs/default-source/ilco-bylaw/bylaw16.pdf?sfvrsn=4.
7
See By-Law 4, last amended February 23, 2017, ss 1(1), 5 made under s. 62(0.1) of the Law Society Act, RSO 1990, c L 8. ("LSA). Unless
otherwise noted, hereafter all references to By-Laws are to those made under the LSA.

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In 1999, when there was no entrenched distinction between clerks and paralegals,8
the
Government of Ontario invited the Law Society of Upper Canada (and others) to assist it
in analyzing issues regarding the delivery of legal services by non-lawyers, including the
issue of regulation.9
In 2000, the Law Society's Paralegal Task Force issued a report
recommending that non-lawyers be regulated for the purposes of appearing before a
court or tribunal, in accordance with procedures established by the court or agency
itself.10
Importantly, the Task Force justified its position with recourse to the rationale
that non-licensees do not generally require regulation because they are directly
supervised, and therefore regulated through, the supervising lawyer.11
From the outset, the Task Force recommended that independent paralegals be prohibited
from practicing in the area of real estate.12
The reason for this is that real estate engages
a number of complex and intersecting areas of law (often for clients who are unable to
assess the level of expertise required for their transaction), particularly where on title
risks arise. Such risks almost invariably require the provision of expert legal advice.13
In
addition to the complexity of the field, the Task Force viewed the growing risk to the
public posed by faulty or fraudulent transfer of title to be unacceptable for paralegals to
8
See Paralegal Task Force, "Final Report" Law Society of Upper Canada (March 2000) at 185, online:
http://www.lsuc.on.ca/media/paralegalfinalrept_en.pdf
9
Ibid at 4.
10
Ibid at 173-175.
11
Ibid at 173, 185.
12
Ibid at 134-135.
13
Ibid (task force final report). The Task Force provided a number of non-title or off-title risks which may arise in the context of real estate
transactions: a) whether the consumer should or should not close a deal; b) examination of the survey and advising clients of irregularities, c)
advice about mortgage terms such as, pre-payment clauses, d) advice on title insurance policies, e) building Code and variance problems; f)
Land Transfer Tax problems including possible refunds; g) sales tax. issues; h) the vendor’s liability in certain contractual situations; i) the
legality of rental income from a separate apartment in the dwelling; and. j) construction lien problems.

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assume. Importantly, the report specifically identifies that the economics of conveyancing
might necessitate delegation, and accepts that supervised delegation, for example, in title
searching and closing, is appropriate by virtue of the supervision and ultimate
responsibility of a lawyer.14
In the course of determining the appropriate regulatory framework for paralegals, the
Task Force considered and rejected ILCO's proposal that it become the formal regulator
of clerks. The Task Force rejected this proposal, because:
"law clerks are already regulated because lawyers supervise them. They
are covered by the lawyer’s insurance and the supervising lawyer is
responsible for their conduct and competence. Lawyers who fail to
adequately supervise their law clerks are in breach of the Rules of
Professional Conduct."15
Given this pervasive rationale for not regulating clerks at the professional level, it
becomes important to identify the regulatory framework under which the lawyer may (or
may not) delegate certain tasks.
(b) The Trickle-Down Regulation of Lawyers
Rule 6.1-1 of the Rules of Professional Conduct ("Rules") is the starting point for effective
delegation in the practice of real estate.16
Under this rule, a lawyer must fulfil two
foundational duties with respect to their practice of law, "assume complete professional
14
Ibid at 135.
15
Task Force on Paralegal Regulation, "Report to Convocation" Law Society of Upper Canada (Policy Secretariat: September 23, 2004) at paras
146-147, online: http://www.lsuc.on.ca/media/convsept04_paralegal_report.pdf.
16
It is beyond the scope of this paper to exhaustively discuss how each rule might impact a given task in a real estate transaction. For a brief
overview on how more broadly applicable rules can effect a real estate practice, see Caterina Galati, "Update on the Amended Rules of
Professional Conduct" Six Minute Real Estate Lawyer (Law Society of Upper Canada: Continuing Professional Development 2014).

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responsibility for their practice" and "directly supervise non-lawyers to whom particular
tasks and functions are assigned." The lawyer remains responsible to review this work,
and must do so frequently to ensure it is complete, timely, and correct.17
Generally, if a non-lawyer is competent to do work in connection with a law practice, and
supervised by a lawyer, it is permissible for the lawyer to delegate such work.18
Sole or
part time practitioners must ensure that matters which require professional skill or
judgment are dealt with by competent lawyers, and that legal advice is not provided by
unauthorized persons in connection with their practice.19
The Federation of Law Societies of Canada's Model Code of Professional Conduct, on
which the current Ontario Rules are based expressly recognizes that if "a non-lawyer has
received specialized training or education and is competent to do independent work
under the general supervision of a lawyer, a lawyer may delegate work to the non-
lawyer."20
However, this Commentary is not included in the current Ontario Rules.
For real estate lawyers, Commentaries 5.3 and 5.4 to rule 6.1-1 (to which we will return
below) set out the scope of permissible delegation. The commentaries read:
[5.3] Real Estate - A lawyer may permit a non-lawyer to attend to all
matters of routine administration, assist in more complex transactions,
17
. Rules of Professional Conduct, rule 6.1-1 ("Rules"). Unless otherwise noted, hereafter all citations to rules are to the Rules of Professional
Conduct
18
Ibid, Commentary [1]
19
Ibid, Commentary [2]
20
In Gavin MacKenzie's view, such recognition is also present in the Ontario Rules. He writes the "Ontario rules recognize that there exists a
category of non-lawyers, generally referred to as law clerks, who have received specialized training or education and are therefore capable of
doing independent work under the general supervision of a lawyer." It appears Mackenzie is resting this conclusion in part upon the
commentary which is only contained in the Model Code. Gavin MacKenzie, Lawyers and Ethics: Professional Responsibility and Discipline
(Thomson Reuters, Loose Leaf, 2016 Rel 3) at 25-22.

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draft statements of account and routine documents and correspondence
and attend to registrations. The lawyer must not assign to a non- lawyer
the ultimate responsibility for review of a title search report or of
documents before signing or for review and signing of a letter of
requisition, review and signing of a title opinion or review and signing of a
reporting letter to the client.
[5.4] In real estate transactions using the system for the electronic
registration of title documents ("e-reg"™) only a lawyer may sign for
completeness of any document that requires compliance with law
statements.21
In addition, rules 3.2-9.4 through 3.2-9-7 govern the lawyer's obligation to neutrally
assess all reasonable options to secure title in a conveyancing transaction, and if TitlePLUS
is discussed, to advise the client of the relationship between the profession and, the law
Society and LawPRO. Rules 3.2-9.8 and 3.2-9.9 require a lawyer acting for a lender of a
loan secured by real property to finally report on the transaction, with a copy of a
registered mortgage, to the lender within 60 days of registration, or as otherwise
instructed by the client. Even if the lawyer has paid to satisfy prior encumbrances to
insure the priority of the mortgage, and the lawyer has obtained an undertaking to
register the discharge thereof, the lawyer must deliver the report within the specified
time where the discharge remains unregistered.
Rules 6.1-5, 6.1-6 (for the electronic registration of title documents), 6.1-6.1 (Title
Insurance) and 6.1-6-2 (the permissible use of the electronic registry) essentially govern
the integrity of the electronic land registry. These are discussed below, but for ease of
reference are reproduced here:
21
Rule 6.1-1., Commentaries [5.3] and [5.4].

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Electronic Registration of Title Documents
6.1-5 When a lawyer has a personalized specially encrypted diskette to
access the system for the electronic registration of title documents ("e-
reg" ™), the lawyer
(a) shall not permit others, including a non-lawyer employee, to use the
lawyer's diskette; and
(b) shall not disclose their personalized e-reg ™ pass phrase to others.
6.1-6 When a non-lawyer employed by a lawyer has a personalized
specially encrypted diskette to access the system for the electronic
registration of title documents, the lawyer shall ensure that the non-
lawyer
(a) does not permit others to use the diskette, and
(b) does not disclose their personalized e-reg ™ pass phrase to others.
Title Insurance
6.1-6.1 A lawyer shall not permit a non-lawyer to
(a) provide advice to the client concerning any insurance, including title
insurance, without supervision,
(b) present insurance options or information regarding premiums to the
client without supervision,
(c) recommend one insurance product over another without supervision,
and
(d) give legal opinions regarding the insurance coverage obtained.

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Signing E-Reg™ Documents
6.1-6.2 A lawyer who electronically signs a document using e-reg™
assumes complete professional responsibility for the document.22
These real estate specific rules are particular instances of the overarching principle of
delegation from rule 6.1-1: the lawyer is wholly responsible for their practice. The Law
Society appreciates that it would be impractical to run a viable conveyancing practice
without the delegation of routine matters. This reality does not relieve the lawyer of the
burden of their ultimate responsibility.
There is one additional rule which should be kept in mind when a lawyer is determining
whether to delegate a given task: the lawyer is under a positive duty to assist in
preventing the unauthorized practice of law and the unauthorized provision of legal
services.23
The rationale for this rule is the same used to prevent paralegals from
practicing in real estate – the protection of the public.24
In addition to the Rules, a lawyer must also comply with the Law Society By-Laws. By-Law
7.1, allows the lawyer to assign tasks to non-lawyers in connection with their practice.25
It reiterates the lawyer's ultimate responsibility for their practice, and ensures non-
lawyers are appropriately supervised.26
The By-Law clarifies the general rule permitting
the delegation of tasks to non-lawyers. A lawyer (or other licensee) shall:
22
Rules 6.1-5, 6.1-6, 6.1-6.1, and 6.1-6-2
23
Rule 7.6-1.
24
Ibid, Commentary [1]. As explained by Gavin MacKenzie, the duty to assume complete responsibility for one's practice is a corollary of the
duty assist in the prevention of unauthorized practice. Gavin MacKenzie, supra note 20 at 25-21.
25
See By-Law 7.1, s 3(1).
26
Ibid, s 3(2).

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(a) not permit a non-licensee to accept a client on the licensee’s behalf;
(b) maintain a direct relationship with each client throughout the
licensee’s retainer;
(c) assign to a non-licensee only tasks and functions that the non-licensee
is competent to perform;
(d) ensure that a non-licensee does not act without the licensee’s
instruction;
(e) review a non-licensee’s performance of the tasks and functions
assigned to her or him at frequent intervals;
(f) ensure that the tasks and functions assigned to a non-licensee are
performed properly and in a timely manner;
(g) assume responsibility for all tasks and functions performed by a non-
licensee, including all documents prepared by the non-licensee; and
(h) ensure that a non-licensee does not, at any time, act finally in respect
of the affairs of the licensee’s client.27
In addition, the By-Laws require a lawyer to verify the identity of most clients.28
There are
additional client identification requirements where the lawyer engages in or gives
27
Ibid, s 4(2). The By-Law further prohibits the following tasks from being delegated: (a) to give the licensee’s client legal advice;… (c) to conduct
negotiations with third parties, other than in accordance with subsection 5 (2); (d) to sign correspondence, other than correspondence of a
routine administrative nature; or (e) to forward to the licensee’s client any document, other than a routine document, that has not been
previously reviewed by the Licensee. Further, a lawyer may not allow permit a non-licensee to use their personalized diskette to access to the
electronic registration system, and except under certain circumstances a non-lawyer may not send a collection letter. See Ibid, ss 6-7. It is of
course permissible for a non-lawyer to have individualized access to this system. In such cases, it is incumbent upon the lawyer to emphasize the
importance of the security of the personalized diskette and pass phrase. See rule 6.1-6, Commentary [1].
28
Ibid, s 21, 22. Lawyers who do not have to verify the identity of clients at the beginning of the retainer, or meet the enhanced requirements
relating to the transfer of funds include those (a) acting on behalf of their employer; (b) acting as agent for another licensee or lawyer who has
already complied with the requirements; (c) received a referral for the client from a licensee or lawyer who has already complied with the
requirements; or (d) duty counsel under the Legal Aid Services Act, 1998 (except where the transfer of funds is concerned. See By-Law 7.1, s.
23.

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instruction is respect of the receipt, payment, or transfer of funds (that is to say, virtually
all real estate transactions).29
The underlying concern, which is evident throughout the regulatory framework, is to
ensure that the general public is protected from unregulated staff through the highly
regulated legal profession. The lawyer is, in all circumstances of permissible delegation,
required to ensure non-lawyer staff members are: (1) competent for a given task; and (2)
appropriately supervised. Most importantly, the final responsibility for their practice rests
with the lawyer.
(c) Supervision Gone Wrong
Before we turn to identifying areas of appropriate delegation in a real estate transaction,
it is useful to situate the discussion by first looking at circumstances which do not
represent appropriate delegation to non-lawyer staff.
While the majority of our clerks are and will remain essential pillars of our practices, a
lawyer must remain vigilant to the possibility of being the "dupe" of a non-lawyer,
regardless of whether that non-lawyer is an employee.30
At worst, a non-lawyer employee
turned fraudster can prey upon vulnerable clients seeking legal assistance, and may do so
through their connection to an otherwise legitimate law practice.31
29
See By-Law 7.1, s 22(1)(b).
30
This obligation stems from rules 3.2-7 and 3.2-7.1, and Commentaries [1] and [2] thereunder. Note that the commentaries specifically avert to
the need for the lawyer to guard against being used in connection with, inter alia, mortgage fraud. In addition, because a competent lawyer is
expect to comply with both the spirit and the letter of the Rules, a minimum requirement of competency is that a lawyer conduct himself or
herself in a manner that guards against unwittingly participating in fraud. See Law Society of Upper Canada v Selwyn Milan McSween, 2012
ONLSAP 3 at para 41.
31
See e.g. R v Kassam, 2017 ONSC 74 ("Kassam"), where a non-lawyer employee, Inayat Kassam, essentially functioned as a paralegal (though
not being licensed to do so), possibly without the knowledge of his employer. Kassam first robbed his employer, and then defrauded potential
clients by holding himself out to be licensed to practice law. He managed to find employment with three separate firms, and had even appeared

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In the context of disciplinary actions relating to mortgage fraud, where a lawyer fails to
properly supervise their non-lawyer staff, the Law Society decisions term such failures
"abdication" and "dupe" cases. These cases represent situations where a lawyer or other
licensee engages in misconduct short of participation or assistance in the fraud.32
Generally, abdication is a more pervasive pattern of misconduct, whereas being "duped"
is professional misconduct only where the lawyer's conduct is otherwise blameworthy.33
Even within the category of abdication there is a spectrum of blameworthiness, where
the "extent of moral blameworthiness attributed to abdicating one's professional
responsibilities is informed by the extent to which a lawyer abdicates his or her
professional responsibilities."34
While these terms are useful analytical tools for analyzing
the abrogation of a lawyer's responsibility, they should not be employed too strictly.35
Of course, a licensee clearly abdicates their responsibility where they wholly cede the
practice of real estate law to their clerk.36
For example, in Dillon, a technologically
illiterate lawyer expanded his practice to include real estate. The lawyer's wife and law
clerk assumed functional responsibility for the real estate practice, and the practice's
finances. After Ontario moved to the electronic registration system, unbeknownst to the
lawyer, the clerk obtained a Teranet key on his behalf. While the lawyer reviewed cheques
and requisition letters, he made only cursory inquiries into the propriety of the
in court as counsel of record by misappropriating one of his former employers' :LSUC numbers. Note that, for the purposes of Kassam's sentencing,
the court explicitly held that at least one of his employers failed to properly supervise him. See ibid at para 4.
32
Law Society of Upper Canada v Karen Rosalee Caroline Cunningham, 2012 ONLSAP 0031 at para 16 ("Cunningham").
33
Ibid at paras 16-19, 20-21.
34
Law Society of Upper Canada v Martin Ronald Zaretsky, 2013 ONLSHP 54 at para 117.
35
Cunningham, supra note 31 at para 22.
36
See e.g. Law Society of Upper Canada v Dillon, 2016 ONLSTH 167 ("Dillon").

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transactions he acted in.37
After it was discovered the lawyer's wife was misappropriating
client funds held in trust, the hearing panel found the lawyer's conduct was an "almost
total abdication of professional responsibilities which goes to the core of the [l]awyer's
ability to practice",38
and he "purported to carry on a real estate practice without any
appreciation, training, or knowledge of real estate law…".39
It is unlikely that anyone reading this paper will be surprised that the situation in Dillon
was found to be professional misconduct in violation of current rule 6.1-1. Apart from
confirming that a modicum of specialized knowledge is required to hold oneself out as a
real estate lawyer, Dillon helpfully identifies the contours (albeit at their most extreme)
of appropriate supervision. It was not alleged that the lawyer knowingly participated in
any wrongdoing, and the lawyer even admitted he failed to properly supervise his
practice. However, the hearing panel confirmed this conduct was both inherently
dishonest (as the clients were not receiving the services they expected) but also a
necessary precondition to the wife's ultimate criminality.40
Therefore Dillon shows us that
the failure to supervise one's employees is intricately connected with the importance of
protecting the public confidence in the practice of law generally.
There are less dramatic iterations of a lawyer's failure to properly supervise employees.
For example, LawPRO has noted a "sharp increase in 'inadequate investigation'
claims…[resulting] from busy lawyers not spending enough time on a file."41
There is an
increasing number of errors, not because a lawyer has assigned a task to a person not
37
Ibid at paras 30-34.
38
Ibid at para 81.
39
Ibid at 82.
40
Ibid at paras 92-93.
41
LawPRO, LAWPRO, "Real Estate Claims: Malpractice Fact Sheet", supra note 4.

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qualified to perform it, but potentially because they are assuming non-lawyer staff can
function as a safeguard to ensure a transaction is properly closed. While LawPRO does
not provide any detail into the resolution of these claims, real estate lawyers should
remember that even work delegated to competent and supervised staff requires the
lawyer's final review.42
In addition, a lawyer is liable for the negligence of their non-lawyer employees. In Fram
Developments Corp., the court determined a lawyer was negligent where he instructed
his secretary to fax a notice of extension for a service permit to another firm. While the
court found the secretary did not follow those instructions, it still held the lawyer was
negligent in not taking steps to confirm that the fax was received, including by again
following up with the secretary.43
Importantly for present purposes, liability does not flow
from the lawyer to the non-lawyer staff.44
How can a lawyer prevent these types of issues? Before we engage with the particular
elements of a real estate transaction, there is one point which must be emphasized:
effective delegation can and should be structural. For example, ensuring staff have
comprehensive and specific job descriptions is an essential precondition for effective
delegation.45
Similarly, ensuring work is delegated with clear instructions (for example, by
42
See e.g. Raymond Leclair, "Ways Title Insurers Can Respond to Claims", Six Minute Real Estate Lawyer (Law Society of Upper Canada: Continuing
Professional Development, November 21 2012). Interestingly, Leclair points out that the general indemnity under the Release and Indemnity
Agreement protecting lawyers from above limit claims is limited to transactions in Ontario, and does not protect a grossly negligent lawyer. Ibid
at 4-10.
43
835039 Ontario Inc v Fram Development Corp, 1994 CarswellOnt 4224 at paras 81-82, 245-246 (Gen Div).
44
See 1013952 Ontario Inc v Sakinofsky, 2009 CarswellOnt 6870. In this case, Pierce RSJ held that a student was not bound to supervise the end
work product of the principal.
45
See Kassam, supra note 31 at para 4, where the Court noted that the scope of Kassam's work for his first employer was known to the employer.
This situation could have been avoided with a clear and concise job description.

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employing shared priority management systems) ensures that the lawyer is able to
consciously discharge his or her duties under the Rules.46
Ensuring there are structural protections which inhere in all delegated work ensures that
the non-lawyer is, among other things, appropriately prepared for the tasks which are
assigned to them. Encouraging or facilitating a clerk's ILCO membership is another way to
help ensure staff is adequately prepared and able to make meaningful contributions to
your practice.47
Such structural protections routinize the essential elements of delegation,
including ensuring the employee is competent, appropriately instructed and regularly
reviewed.48
Structural protections may also assist in the most efficient delegation. For
example, a lawyer can properly instruct a non-lawyer to give or accept undertakings, or
take instructions from a client, as long as they are authorized to do so in advance.49
In addition, so-called "red flags" may arise at any stage in a client file, and therefore,
addressing red flags at a structural level will help ensure you are complying with your
obligations concerning mortgage fraud. At their simplest, red flags are pieces of
information which alert the lawyer to impropriety or an increased likelihood of fraud or
other wrongdoing in connection with their practice. Commentaries [4.1] and [4.2] to Rule
3.2-7.3 identify common indicia of fraud in real estate transactions:
[4.1] A lawyer representing any party in a real estate transaction should be
vigilant in identifying the presence of "red flags" and make inquiries to
46
See e.g. JoAnn Alberstat, "Working Effectively with Support Staff Worth the Time, Effort" Canadian Bar Association (April 12, 2016), online:
https://www.cba.org/Publications-Resources/CBA-Practice-Link/2015/2016/effectively.
47
Stephanie Sroka, "Using Law Clerks Effectively: Five Ways to Effectively Use Your Law Clerk" Six Minute Real Estate Lawyer (Law Society of
Upper Canada: Continuing Legal Education, 2005).
48
See Real Estate Practice Guide for Lawyers (Law Society of Upper Canada, June 2010) at 23 ("Practice Guide").
49
See By-Law 7.1, s 5(1)(a) and (c).

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determine whether it is a bona fide transaction. Red flags include such
things as
(a) purchase price manipulations (revealed by, for example, deposits
purportedly paid directly to the vendor, price escalations and "flips" in
which a property is sold and re-sold within a short period of time for a
substantially higher price, reductions in the balance due on closing in
consideration of extra credits or deposits not required by the purchase
agreement, amendments to the purchase price not disclosed to the
mortgage lender, the acceptance on closing of an amount less than the
balance due, a mortgage advance which approximates or exceeds the
balance due resulting in surplus mortgage proceeds, and so on);
(b) a nominal role for one or more parties (fraud is sometimes effected
through the use of "straw people", who may not exist or whose identities
have either been purchased or stolen, as well as through the suspicious
use of powers of attorney);
(c) the purchaser contributes no funds or only a nominal amount towards
the purchase price or the balance due on closing;
(d) signs that the parties are concealing a non-arm's length relationship or
are colluding with respect to the purchase price;
(e) suspicious or repeated third-party involvement (for example, giving
instructions, supplying client directions or identification, and providing or
receiving funds on closing); and
(f) the proceeds of sale are disbursed or directed to be paid to parties who
are unrelated to the transaction.

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[4.2] The red flags listed above are not an exhaustive list. Further
information regarding red flags is available from many sources, including
the "Fighting Real Estate Fraud" page within the "Practice Resources"
section of the website of the Law Society. Fraudulent real estate schemes
and the red flags associated with such schemes are numerous and
evolving. Lawyers who practise real estate law have a professional
obligation therefore to educate themselves on an ongoing basis regarding
the red flags of real estate fraud
Ensuring staff are equipped to recognize potential red flags, (once discovered), and to
bring them to your attention will help you discharge your duty to bring any red flags to
your client's attention.50
Indeed, in the disciplinary context, the hearing panel has
accepted, inter alia, the lawyer must "train staff about the indicators of mortgage fraud"51
The failure to adequately identify red flags (and therefore discover a fraud) can give rise
to an action in professional negligence against the lawyer responsible for identifying
them.52
Part II: Delegation, Supervision, and Responsibility in a Real Estate Transaction
While every real estate transaction is unique, there are a set of common features required to
effectively convey title to a given real property. In order to formulate broadly applicable guidance
to lawyers practicing in all areas of real estate, I have commented on some of the common
50
Law Society of Upper Canada, "Red Flags that Should Prompt Questions and Due Diligence When Dealing with Real Estate Transactions", online:
http://www.lsuc.on.ca/For-Lawyers/Manage-Your-Practice/Practice-Area/Real-Estate-Law/Fighting-Real-Estate-Fraud/; see also Becky Rynor,
"Avoiding Commercial Mortgage Fraud: Sweat the Small Details" Canadian Bar Association (May 1, 2013), online:
https://www.cba.org/Publications-Resources/CBA-Practice-Link/Business-and-Corporate/2013/Avoiding-commercial-mortgage-fraud-‘Sweat-
the-smal.
51
See Law Society of Upper Canada v Renata Snidr, 2013 ONLSHP 108 at para 27.
52
See Stephen Grant, Linda Rothstein & Sean Campbell, Lawyers' Professional Liability, 3rd
ed (Markham: LexisNexis, 2013) at 174).

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features of real estate transactions, and indicated where delegation to non-lawyer staff is usually
appropriate, and where it is clearly prohibited. As the particulars of a given transaction will make
it impossible to definitively state whether a given task may be delegated in all circumstances, the
information that follows should be employed concurrently with, and is not a substitute for, your
professional judgment.
For our purposes, there are three main elements to a real estate transaction. First, the
Agreement of Purchase and Sale ("APS") is negotiated and drafted. Second, the purchaser will
perform due diligence. Third, the transaction will close.
(a) The Agreement of Purchase and Sale
In a perfect world, lawyers would have a hand in negotiating and drafting the clients' APS.
In practice, at least for residential real estate transactions, many APSs are prepared by a
real estate agent.53
However, in those transactions in which the APS is drafted after the
lawyer is retained (or in any event, at the beginning of the retainer) the lawyer must
usually take steps to verify the client's identity.54
It is impermissible to delegate the task
of accepting a client to a non-lawyer,55
and the lawyer remains ultimately responsible for
verifying the client's identity. As seen above in commentary [4.1] to rule 3.2-7.3,
complying with the client verification rules may assist in the early detection and
prevention of mortgage fraud.
53
See Peter D. Quinn and Danny C. Grandilli, Real Estate Practice in Ontario, 7th ed (Markham: LexisNexis Canada, 2011) at 225.
54
For the pertinent exceptions, see By-Law 7.1, s 22(3), which exempts, inter alia, financial institutions and funds received from other lawyers'
trust accounts from the enhanced verification requirements normally applicable to organizations. These exceptions mean a lawyer who is
concurrently acting for a financial institution in respect of a conveyance need not take additional steps to verify the names directors of an
organization.
55
By-Law 7.1, s 4(2)(a).

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A retainer letter can be an indispensable tool for setting the tone with the client, and
where necessary, can request client consent to delegate certain work. It should also set
out the client's options to secure title, which is, as discussed above, a requirement under
the Rules.56
Like the APS itself, the letter can be largely standardized. This means that,
with appropriate instruction, preparing and sending the letter can be delegated to staff.57
However, where special circumstances arise, the lawyer is responsible for identifying and
addressing them. Speers notes that a retainer letter might also serve a dual purpose as a
memo-to-file, confirming his discussions with clients, and can also identify the risks with
the client's proposed course of conduct.58
While memorializing the former may be
properly delegated, at least from a practical perspective, the latter should be dealt with
by the lawyer.
If the lawyer is satisfied that a proposed APS is routine, and that the document will not
be substantially redrafted, it may be permissible to delegate the drafting of the APS to a
suitably skilled law clerk.59
Nothing in delegating the drafting alleviates the lawyer's
obligation to ensure, pending the remaining stages of a real estate transaction, the
contract is capable of formation, execution and performance. In addition, the lawyer must
ensure that the APS is legally sufficient for the needs of the client. But notwithstanding
who holds the drafting pen, the ultimate responsibility for navigating the clients' needs
cannot rest upon non-lawyer support staff.
56
See rules 3.2-9.4 through 3.2-9.7; see also Ian Speers, "Retainer Letters – How to Cover your Bases in Residential Conveyancing" The Six Minute
Real Estate Lawyer 2014 (Law Society of Upper Canada: Continuing Professional Development, November 18, 2014) at 6-3.
57
Speers, supra note 56 at 6-6.
58
Ibid. Note that a lawyer may not delegate the ability to forward to the client any document that has not been previously reviewed lawyer,
unless it is of a routine nature. See By-Law 7.1, s 6(1)(e).
59
See rule 6.1-1, Commentary [5.3].

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A more interesting question is the concept of the clerk's involvement in a "battle of the
forms". If a clerk is appropriately supervised, and the client accepts, a clerk may negotiate
with parties (here the counterparty or their counsel), and any negotiated term(s) are
subject to the final approval of the lawyer.60
To the extent that the subject matter of the
negotiation is, for example, a choice between two conventional standard charge terms in
a Vendor Take Back Mortgage.
In principle, the same rule permits a trained and supervised clerk to draft documents
which are also required depending on the role of the client in the proposed transaction.
For example, many purchasers require title directions, which have the effect of
substituting the purchaser for the individual named in the direction. Obviously, it would
be inappropriate for the clerk to advise how multiple purchasers might want to jointly
hold or transfer property.
In sum, except for formally accepting the client, a trained and supervised law clerk may
perform many of the tasks required in connection with a standard APS. However, any and
all legal advice, determinations, and finally negotiated terms, are within the sole purview
of the lawyer.
(b) Due Diligence
(i) Title Insurance
A lawyer must assess a client's options regarding title insurance (and must inform
the client that title insurance is not mandatory or the only option to protect the
client's interest).61
In order to fulfil this broad obligation, where non-legal staff are
involved in the title insurance process, the lawyer must carefully supervise them.
60
By-Law 7.1, s 5(2).
61
Rule 3.2-9.4 and the commentary made thereunder.

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A lawyer must not permit a non-lawyer to advise a client about appropriateness
of title insurance, discuss any potential premium, or to recommend a specific
insurance product without appropriate supervision.62
A lawyer must understand
the specific elements of the transaction in question, and insurance products in
order to fulfil their obligations under the rule.63
. It is of course inappropriate for a
non-lawyer to render a legal opinion on any insurance coverage the client
obtains.64
LAWPro has received errors and omissions claims in circumstances where,
"possibly due to improper delegation or inadequate supervision of support staff,
the wrong type of title insurance was obtained."65
One reason a lawyer needs to
supervise this process (apart from a their clear obligation in the rules) is to identify
the consequences from using title insurance as an alternative to title searches
(regardless of whether those searches are waived by the insurer).
(ii) Searching and Letter Enquiries
As a matter of course, a non-lawyer will likely perform the title search. As we
know, the precise searches will depend on the property and the applicable
insurance requirements, if any. Generally, a solicitor is obliged to search for
outstanding work orders under the governing municipal by-laws.66
As discussed
above, the lawyer must review the contents of the searches conducted on the
62
See rule 6.1-6.1.
63
See e.g. Ray Leclair, "Title Insurance Coverage is Like a Box of Chocolate" (2014) 13:2 LAWPRO Magazine at 31-32, online:
https://www.practicepro.ca/LawPROmag/Title_Insurance_Different_Policies.pdf.
64
Rule 6.1-6.1(d).
65
Leclair, "Ways Title Insurers Can Respond to Claims", supra note 42 at 4-9.
66
Grant, Rothstein & Campbell, supra note 52 at 188.

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property. While searching itself is generally routine, a lawyer must be live to rarer
circumstances which will require additional diligence. For example, if the
circumstances indicate specific non-standard searches be conducted, it may be
negligent to proceed without those searches.67
Apart from being the primary source of information about the property the parties
intend to convey, searches are a good example of why a lawyer must not rely too
heavily on non-lawyer staff in a transaction.
If, in response to a letter enquiry search, it becomes apparent a property is not in
compliance with a local by-law, or is encumbered with outstanding municipal
taxes, the appropriate resolution for the client likely requires the application of
specialized legal knowledge and judgment. As the resolution of either situation
would likely require substantive legal advice, such tasks should not be assigned by
a lawyer. Where certain documents are requisitioned because of a potential issue
with the property, or disclose new information about the property (for example,
a survey in the absence of insurance), the lawyer should communicate this with
the client for the same reason.68
In addition, apart from determining the scope of necessary searches and
subsearches to perform, documents registered on title may provide an important
opportunity to assess some of the most obvious red flags, including a rapid
increase in purchase price.
67
Ibid at 189.
68
Note that the lawyer may not ultimately bear responsibility for the contents of a survey, or the physical condition of a property generally. See
Ibid at 186-188.

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(iii) Title Requisitions
A properly supervised non-lawyer can draft title requisitions, with the same
qualifications of appropriate training and supervision. However, such requisitions
and requisition responses require the final approval of a lawyer with a good
understanding of the results of the appropriate searches and letter enquiries.
Therefore, all such delegated work should be lawyer reviewed.
The potential importance of title requisitions renders the language used to make
or reply to requisitions equally important. While requisitions often employ
boilerplate language, it is imperative to insure that the underlying inquiries are
appropriately tailored to the results of the searches and compliant with the terms
of the APS. Again, in principle such letters may be drafted by competent non-
lawyers, but they also must be reviewed diligently to ensure the client retains any
rights and remedies they may possess in connection with the APS.
Recall that the lawyer is prohibited from assigning the ultimate responsibility for
a review of a title search report or of documents before signing or for review and
signing a letter or requisition, title opinion, or reporting letter to a client.69
Simply
put, the lawyer may finally review the performance of such tasks himself or
herself, or they can be liable under the Rules as if such tasks had not been
performed. It should be noted that the hearing panel has held allowing a clerk to
prepare and sign requisition and reporting letters can constitute an abdication of
responsibility, at least in conjunction with evidence of inconsistent supervision.70
69
Rule 6.1-1, Commentary [5.3].
70
See e.g. Law Society of Upper Canada v Jarvis Yap Ortega, 2013 ONLSHP 91 at para 41.

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Closing
Assuming the property in question is registered under the Land Titles Act, this stage involves the
most specific framework for delegation in the entire transaction. As reproduced above, rules 6.1-
5, 6.1-6, and 6.1-6.2 govern the lawyer's use of the electronic registry. Recall, where a lawyer
signs a document on the electronic system, they assume complete responsibility for it, so it is
equally important to review any work which has been delegated (even for typographical errors).
While clerks have an integral role in the electronic registry, only lawyers may complete
compliance with law statements, and cannot delegate their access to do so to non-lawyers.71
Indeed, such a statement is quintessentially the practice of law in that it represents the exercise
of legal judgment on a given state of affairs (being the preconditions to closing). Since the
inclusion of this statement requires that only a licensee of sign for the completeness of the end
product, a lawyer, this task may not be delegated to a clerk.
In the absence of a compliance with law statement, a clerk authorized by the client may sign for
the completeness and sign for the release of a document prior to registration,72
and assuming
they are authorized to access the registry, but, as emphasized above, the lawyer remains
ultimately responsible for that document.
A law clerk may also participate in many of the necessary events prior to closing. They may
provide valuable assistance in preparing the statement of adjustments, when working for the
vendor. A clerk is entitled to provide post-closing undertakings on behalf of their supervising
lawyer, if they are expressly instructed and authorized to do so. As the clerk is giving your
undertaking in this circumstance, it would be inappropriate to instruct the clerk to disclaim
personal liability where possible. This is because there is no exception in By-Law 7.1 which would
71
See By-Law 7.1, 6(2).
72
Ontario, Ministry of Government and Consumer Services, Bulletin 2009-01(April 15, 2009), online: https://www.ontario.ca/land-
registration/2009-02-teraview-version-60-and-phase-2-system-changes-and-fraud-action-plan.

WSLEGAL0008500099717736509v1
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allow the lawyer to delegate the ability to give the client's undertaking.73
However, where the
client has confirmed the lawyer should accept a specific undertaking, it would appear appropriate
for a clerk to do so.74
Apart from the exceptions to electronic closing noted above, there is another important area
which should be attended to by lawyers only. A non-licensee is allowed to cosign for a trust
account as an internal measure, but may not have signing authority for the account, save in
exceptional circumstances.75
It is of course possible to transfer funds through Teranet, but
depending on the structure of the closing, a lawyer should ensure that the funds are held in
accordance with the written instructions of the client.
A reporting letter is required in order for a lawyer to release payment into the lawyer's general
account. Rule 6.1-1, Commentary [5.3] allows the clerk to draft the reporting letter, but not to
take responsibility for the final product. Even absent this prohibition, where a lawyer is acting
for a purchaser, the title opinion portion of the letter would render it impermissible to delegate.
As discussed, a non-lawyer is not permitted to give directions as to funds held in trust, which
would include disbursing them to the general account after the sale has closed and the reporting
letter has been sent to the client.
Conclusion
There is a level of redundancy in determining the scope and content of permissible delegation in
the Rules and By-Laws. They are understandably general in their formulation. Ironically, given
that real estate can be a formulaic and volume oriented field of practice, the fact specific nature
of delegating almost any portion of a file, even in a systematized approach will require some level
73
See By-Law 7.1, s 5(1)(a).
74
As noted above, a clerk may be authorized to take instructions from the licensee's client. See ibid, s 5(1)(c).
75
See By-Law 9, s 11(b).

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of critical thought on your part. However, we can see that no system will relieve us of the ultimate
responsibility for our practices, or from the obligations to train and supervise our staff. However,
a well-planned delegation system will help your staff gain the confidence to perform their work
and assist in improving your shared practice. Properly implemented in light of the principles
discussed above, it should also free up more of your time to ensure your client is receiving the
value contracted for in the retainer.

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