Can a Release Apply to College Complaints?

When individuals get into disputes, they have recourse to the court system. But when one of those individuals is a professional, then he or she may face a complaint to their governing body in addition to a legal action. While a legal action could result in payment of damages, a regulatory complaint can result in discipline proceedings, which can lead to the suspension or even revocation of the professional's licence to practice his or her profession. No wonder, then, that most professionals find the prospect of regulatory complaints far more daunting than a lawsuit. Compounding this anxiety is the fact that a legal action can generally be settled at any time by making a monetary payment. Not so with regulatory proceedings: even where a complainant is no longer interested in proceeding, the regulator is entitled (and possibly obliged) to proceed with an investigation, consideration of a complaint, or prosecution. For this reason, professionals facing the prospect of a complaint as well as a legal action often seek to resolve both matters at once. Unfortunately for regulated professionals, however, the Superior Court of Justice confirmed in a decision from several years ago that there is no guarantee that such an approach is viable.

In the matter of Thompson (Family Trust), 2011 ONSC 7056 (CanLII), two beneficiaries objected to the management of a family trust by the trustees, one of whom is a lawyer. In addition to commencing litigation, one of the beneficiaries made a complaint to the Law Society of Upper Canada concerning what she believed to be serious mismanagement of the trust by the trustee. The litigation was settled prior to trial, on the basis that the trustees would accept a reduction in the compensation and legal fees to which they claimed entitlement. In consideration for this, the lawyer trustee required that as a term of the settlement agreement, the beneficiaries would execute a full and final release in favour of the trustees. The terms of the Minutes of Settlement specifically provided that the beneficiaries shall provide the trustees "with a Full and Final Release, including all pending and possible future complaints filed with the Law Society of Upper Canada, as against the Trustee" with respect to the administration of the trust.

The beneficiary complainant never withdrew her complaint to the Law Society. The lawyer moved to enforce the Minutes of Settlement. While the lawyer acknowledged that the Law Society would not be precluded from proceeding with its investigation and with any discipline proceedings that were warranted, he sought an order from the Court that the beneficiary complainant withdraw her complaint.

Not only did the Court refuse the lawyer's motion, but Justice Lederer suggested, without equivocation, that the inclusion of such a term in Minutes of Settlement was improper. In support of this finding, the Court referred to a decision of the Discipline Committee of College of Physicians and Surgeons of Ontario, in which the panel found that the doctor, who had paid money to a patient in return for her agreement not to proceed with a complaint, had engaged in an act of professional misconduct. The Court reasoned that anything that limits a complainant from willingly and openly taking part in regulatory proceedings would signal a lack of concern for the broader public interest.

What, then, is a professional to do when faced with both a regulatory complaint and legal action? Clearly, a settlement agreement ought not to include a promise to withdraw a complaint, as such a term cannot be enforced. However, if litigation can be resolved while a complaint is outstanding, there is no reason why it cannot be an explicit term of a settlement agreement that the professional who is the subject of the complaint will communicate the fact of the settlement to his or her regulatory body. Although this will not have the effect of withdrawing or automatically dismissing the complaint, the fact that the complainant's action has been resolved may result in a more favourable disposition of the complaint than would otherwise be the case.