Can a lawyer be found guilty of professional misconduct for failing to disclose that he no longer holds funds in trust for his clients?

In Law Society of BC v. Nejat, 2014 LSBC 51, the lawyer admitted he failed to disclose that he no longer held any funds in trust for his clients and admitted professional misconduct for failing to correct the misapprehension he had created with the court and opposing counsel. The panel commented at para. 37: As officers of the court, lawyers have an overriding duty to ensure that they provide accurate information to the court, opposing counsel and self-represented litigants. When lawyers fail in this duty, the integrity of the profession and the administration of justice are compromised. It is no excuse that a lack of candour may inure to a client’s benefit. A legal system in which the courts and other actors cannot trust a lawyer to be accurate in his or her representations cannot hope to achieve justice or maintain the respect of the public.

Nejat was referred to with approval in Law Society of BC v. Albas, 2016 LSBC 18. The panel found the lawyer to have committed professional misconduct for misleading opposing counsel and commented at paras. 111 and 116: The Respondent’s … failure to advise the court and opposing counsel of the results of the company search and the non-receipt of the deposit are all breaches of his duty of candour and good faith to the court and opposing counsel and constitute professional misconduct. The information withheld had the potential for either the court to reach a different decision or for other counsel to change their positions. The Respondent deliberately left the court and other counsel with only part of the complete picture. … Counsel should be able to rely on assertions of other counsel without the need for suspicious reassessments. The duty of candour advances a common professional interest in fair and even dealings. Such conduct of the Respondent constitutes professional misconduct … . It reveals a deliberate failure to candidly inform the other counsel involved of matters of fact that could affect their decisions, deliberations and conduct.