Representation - Lawyers - Law Society Tribunal. Law Society of Ontario v Schulz
In Law Society of Ontario v Schulz (Div Court, 2023) the Divisional Court considered flaws in the composition of the hearing panel, here that of a Hearing Division of the Law Society Tribunal where there was (contrary to statute) no lay member. An LSO Regulation could have allowed such a panel variation on a discretionary basis, but there was no evidence that such discretion had been exercised:
Did the Appeal Division Err in Finding that the Hearing Panel had Jurisdiction to Hear the Application?
 The LSO is a self-regulatory body whose role is to protect the public interest. In Pharmascience v. Binet, 2006 SCC 48,  2 S.C.R. 513, at para. 36, the Supreme Court of Canada observed that “[t]he privilege of professional self‑regulation therefore places the individuals responsible for enforcing professional discipline under an onerous obligation.”
 Under s. 4.2 of the Law Society Act, the LSO, in carrying out its functions, duties and powers, is required to have regard to the following principles:
1. The Society has a duty to maintain and advance the cause of justice and the rule of law. Section 1 of O. Reg. 167/07 (the “Regulation”) under the Law Society Act governs the composition of a hearing panel and states as follows:
2. The Society has a duty to act so as to facilitate access to justice for the people of Ontario.
3. The Society has a duty to protect the public interest.
4. The Society has a duty to act in a timely, open and efficient manner.
5. Standards of learning, professional competence and professional conduct for licensees and restrictions on who may provide particular legal services should be proportionate to the significance of the regulatory objectives sought to be realized.
1(1) The chair [of the Law Society Tribunal] or, in the absence of the chair, the vice-chair shall assign three members of the Hearing Division to a hearing to determine the merits of any proceeding other than an application [that may be heard by a single adjudicator] In addition, s. 4.2(2) of the Statutory Powers Procedures Act, R.S.O. 1990, c. S.22, requires that in assigning members of the tribunal to a panel, the chair “take into consideration any requirement imposed by another Act or a regulation that applies to the proceeding that the tribunal be representative of specific interests[.]”
(2) If the person who is the subject of the proceeding is a [lawyer],
(a) at least one of the members assigned under subsection (1) shall be an elected bencher licensed to practise law in Ontario as a barrister and solicitor; and
(b) at least one of the members assigned under subsection (1) shall be,
(i) a lay bencher, or;
(ii) a [lay adjudicator] approved by the Attorney General for Ontario.
(4) Subsection (2) ... does not apply if the chair or, in the absence of the chair, the vice-chair is of the opinion that,
(a) compliance with the subsection would unduly delay a hearing or otherwise hinder the timely and efficient scheduling of the hearing;
(b) assignment of a member in accordance with the subsection would likely give rise to an actual or perceived conflict of interest on the part of the member; or
(c) the subject matter or nature of the hearing is such that the assignment of one or more members with specific expertise or experience is advisable.
 In this case, the hearing panel that heard the LSO’s application against the Respondent was composed of three lawyers and, contrary to the requirement in s. 1(2)(b) of the Regulation, did not include a lay adjudicator.
 In the circumstances of this case, where the record does not support a finding that the Chair or Vice-Chair exercised their discretion under s. 1(4) of the Regulation to assign a panel with no lay adjudicator, the lack of a lay adjudicator resulted in the hearing panel being improperly constituted. Because the hearing panel was improperly constituted, it lacked jurisdiction to hear the application.
 I recognize that s. 1(4) of the Regulation gives the Chair or Vice-Chair of the Tribunal the discretion to depart from the mandatory requirements of s. 1(2) of the Regulation in three specific circumstances: (i) to avoid undue delay and ensure a timely hearing; (ii) where assignment of a member could give rise to an actual or perceived conflict of interest; or (iii) where the subject matter makes it advisable to assign one or more members with certain expertise. Where the Chair exercises the discretion to assign a panel with no lay adjudicator for one of the grounds provided in the Regulation, it is clear that the panel would have jurisdiction over the matter. In this case, however, and as further explained below, there is nothing to suggest that the discretion was exercised for a ground provided in s. 1(4).
 As noted above, the LSO regulates the legal profession in the public interest. The Supreme Court of Canada has expressly recognized that the presence of members of the public on discipline panels plays an important role in furthering public confidence in the administration of justice, which is a central concern of professional regulation:
There will always be one lay person on a panel of the Committee by operation of s. 55(4) [of New Brunswick’s Law Society Act]. Although they will presumably have less knowledge of legal practice than judges or the members of the Law Society, lay persons may be in a better position to understand how particular forms of conduct and choice of sanctions would affect the general public’s perception of the profession and confidence in the administration of justice. Since these are central concerns in the Act, the lay member of a Discipline Committee provides an important perspective for the tribunal in carrying out its duties. In addition to their broader perspectives, lay benchers and adjudicators are independent from members of the profession. They are appointed by the Lieutenant Governor in Council (for lay benchers) or approved by the Attorney General (for lay adjudicators). The regulatory requirement that they sit on every hearing panel is prescribed by a government-promulgated Regulation. As independent representatives of the public, who are neither elected nor subject to re-election by their professional colleagues, lay adjudicators serve to legitimize the tribunal’s decisions in the eyes of the public.
Law Society of New Brunswick v. Ryan, 2003 SCC 20,  1 S.C.R. 247, at para. 32.
 In the circumstances of this case, where the misconduct related to a conviction for possession of child pornography, the presence of a lay adjudicator on the panel was essential to ensure that the hearing panel included a public interest perspective regarding the profession to maintain confidence in the administration of justice. Moreover, the absence of a lay adjudicator in a case of this nature gives rise to a concern that the public could potentially perceive the hearing panel as lacking the necessary degree of impartiality or independence. My comments should not be taken as suggesting that the panel that heard the application lacked impartiality or independence. In this case, however, the absence of a lay adjudicator on the panel raises a concern that the panel could be perceived by the public to be insufficiently impartial or independent.
 Moreover, the absence of a lay adjudicator on a hearing panel could give rise to the perception that the Tribunal, in disciplining a fellow member of the profession, was inappropriately or unjustifiably lenient in imposing a penalty. In the paragraph quoted above from the Supreme Court’s decision in Ryan, the Court specifically mentioned the “choice of sanctions” and how that might affect the public’s perception of the profession and confidence in the administration of justice.
 The Appeal Division’s conclusion that there was no error in the exercise of discretion by the Chair or Vice-Chair was based on its finding that there was no record upon which the panel might find some impropriety in excluding a lay adjudicator from the panel and no evidence on which it might conclude whether the discretion was “properly or improperly” exercised. The Appeal Division further found that the Chair is under no obligation to “record or document” the reason for appointing an all-lawyer panel. I find this reasoning problematic for the following reasons.
 First, in this case, there is nothing in the record to suggest that the Chair or Vice-Chair actually exercised their discretion to proceed with a panel of three lawyers, let alone that the discretion was exercised for one of the available grounds under s. 1(4) of the Regulation. The hearing panel made no mention of the composition of the panel at the outset of the hearing or at any other time. In the absence of an order, statement or any indication that the discretion not to assign a lay adjudicator to the panel was exercised, it is impossible to conclude that the discretion was exercised and that it was exercised for a ground provided in s. 1(4) of the Regulation. In my view, it cannot simply be assumed that the discretion was exercised, and that it was exercised for a ground available under the Regulation.
 Second, the Chair’s discretion to depart from the requirements of s. 1(2) is not absolute. Because the Chair can only exercise their discretion for one of the grounds stated in s. 1(4) of the Regulation, the issue is not whether a party challenging the composition of the panel can demonstrate impropriety in the Chair’s exercise of discretion. Rather, the issue is whether the discretion was exercised in accordance with s. 1(4) of the Regulation.
 A party challenging the composition of the hearing panel would rarely be able to put forward evidence that the exercise of discretion was not in accordance with s. 1(4) of the Regulation. It is for this reason that the Appeal Division’s finding that the Chair is under no obligation to “record or document” the reason for appointing an all-lawyer panel is particularly problematic. If this were the case, a party would never know whether the discretion to depart from s. 1(2) of the Regulation was exercised in accordance with the Regulation. In my view, because the Regulation requires that the Chair assign a lay adjudicator to the hearing panel and provides only limited grounds for departing from that requirement, the Chair must provide the basis for the exercise of discretion.
 One of the bases the Appeal Division gave for finding that the Chair was not required to notify the parties of the panel’s composition was that an agenda naming the adjudicators was published a week before the hearing, and the parties could have checked the adjudicator biographies on the Tribunal website. I agree that the parties can and ought to check that the panel is properly constituted. However, the burden of ensuring that the composition of the panel complies with the Regulation is not on the parties, but on the Chair.
 My finding is not intended to suggest that the Chair must render a written decision and/or provide extensive reasons when assigning a panel that departs from the requirements of s. 1(2) of the Regulation. The Tribunal’s current practice is to send out an agenda prior to the hearing identifying the panel members. Where the Chair has exercised their discretion under s. 1(4), the agenda could include a statement indicating under which of the three grounds the discretion was exercised.
 Alternatively, the information could be stated on the record at the outset of the hearing. While this could give rise to an objection to the composition of the panel at the outset of the hearing, it would be preferable that the objection be raised and addressed at the hearing stage rather than on appeal before the Appeal Division. It would also be open to the Chair to issue an order in advance of the hearing.
 Nothing in my reasons should be interpreted as constraining the discretion of the Chair under s. 1(4) of the Regulation to assign panels that depart from the requirements of s. 1(2).
 Given that the composition of the hearing panel raised an issue of jurisdiction, it was appropriate for the LSO to raise the issue on appeal, despite having failed to make an objection before the hearing panel. In any event, in my view, the test for raising a new issue on appeal was met. Because the issue was a question of law and/or procedural fairness, the sufficiency of the evidentiary record was not an issue. Moreover, there was no reason to believe that the LSO’s failure to raise the issue at the hearing was a tactical one. Finally, the refusal to raise the new issue would have resulted in a miscarriage of justice.
 Alternatively, if I am mistaken that the hearing panel lacked jurisdiction over the application because it was improperly constituted, I find that the Appeal Panel erred in failing to find that the absence of a lay adjudicator on the panel was a procedural defect that gave rise to a breach of procedural fairness. Given the societal harms that arise from child pornography and the exploitation of children, it was crucial that the public interest perspective be incorporated in this proceeding. The Regulation contemplates that this be done through the participation of a lay adjudicator on every hearing panel where a lawyer is subject to discipline. In my view, in this case, the absence of a lay adjudicator on the hearing panel raises an issue as to the fairness of the proceeding from a public interest perspective.
 In summary, the Appeal Division erred in law in finding that the composition of the hearing panel did not give rise to a lack of jurisdiction and in failing to remit the matter to a properly constituted panel.