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The importance of fairness in regulatory AND workplace investigations

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I recently had the privilege of being a speaker at an webinar event hosted by the Society of Ontario Adjudicators and Regulators (SOAR), to deliver training on fairness issues in investigations.1 While I provided my insight and experiences from the context of workplace investigations, many of the attendees came from government oversight bodies, like Ombudsman Ontario or the Integrity Commissioner of Ontario, or regulatory bodies, such as the College of Nurses of Ontario, and the Investment Industry Regulatory Organization of Canada.

There are key differences between how government watchdogs and regulatory investigators approach or conduct their investigations as compared to workplace investigators. For instance, the powers of ombudsman investigators are defined by statute and many regulatory bodies’ decisions are appealable to the divisional court, whereas workplace investigators’ processes are typically defined and set out in a company policy or retainer agreement, including whether there is an option for appeal.  However, I came to learn and appreciate that we all adhere to similar principles of fairness. My colleague eloquently articulated the essence of why fairness in investigations is something that all investigators should strive for. He explained:

Fairness in investigations includes ensuring a respondent knows the case to be met and has an opportunity to meet it. A reasonable investigation is characterized by neutrality and thoroughness, and includes the sharing of the evidence obtained, and providing an opportunity to respond. Failing to provide fairness undermines the entire investigation – regardless of whether the conclusions were correct.2

During the SOAR presentation, I discussed a recent regulatory case that contained important lessons that inform investigators: Watson v. Law Society of Ontario.

In this case, Richard Watson, an attorney, was facing serious allegations by his client Sylvia Sweeney, who complained that Mr. Watson had misappropriated and mishandled trust funds and altered corporate documents while acting as her lawyer. The Law Society of Ontario (“LSO”), the professional body regulating lawyers in Ontario, investigated and the matter went to a long, multi-day hearing (61 days). The Hearing Panel dismissed all charges against Mr. Watson after finding that there were serious credibility issues with Ms. Sweeney, and Mr. Watson sought costs. His motion for costs was dismissed by the Law Society Tribunal Appeal Division. He then appealed to the Divisional Court on the matter of costs.

The Court ultimately found that the LSO’s investigation was one-sided and unfair. In particular, the Court found that basic corporate and financial documents that supported Mr. Watson’s case were not sought or analyzed when obtained.  The Court noted that, “Merely taking the complainant’s word at face value without testing it by reference to documents other than the ones she herself provided, is not consistent with fairness.”3

The Court also noted that the investigator had filed a final report almost a month before conducting the final interview with Mr. Watson, who was not asked to explain some of the more serious allegations against him, and no supplementary report was made after interviewing him.

Finally, the Court took issue with the LSO’s failure to disclose relevant information or agree to reasonable production requests from Mr. Watson. In particular, Mr. Watson noted that at earlier production motions, the LSO had “repeatedly stated that the duty of the Law Society in its investigation was to produce evidence to support the allegations made, and not to investigate issues involving Ms. Sweeney’s credibility or to inquire about exculpatory evidence that supported [Mr.] Watson’s defence.”4 [emphasis in original]

Indeed, the Court agreed that the LSO investigator, and its in-house counsel, was “fixated on finding support for Ms. Sweeney’s claims, rather than towards testing their truth and the truth of explanations put forward by Mr. Watson.” This was highlighted again, when the Court noted that the position taken by the Law Society was that there was no obligation to explore and assess the credibility of the complainant, based on an internal policy. As such, they did not interview witnesses suggested by Mr. Watson relevant to credibility, or seek to find or produce documents purported to contradict what Ms. Sweeny said. Ultimately, this led the Court to conclude that the investigation was “one-sided.”

The Court noted that, “Testing the veracity of the complainant by reference to corporate documents and communications between the parties is part of a competent investigation and must be undertaken for the investigation to accord with principles of fairness.5 They added that this was not a case of dealing with credibility issues in a sexual impropriety case, which was the basis of the internal policy that the LSO used to justify their actions during the investigation (the Court added that even in sexual assault cases, there is a duty to investigate both sides of the story).

Ultimately, the matter of Mr. Watson’s costs was sent back to be determined by a different panel, given all of the issues in the investigation and the unbalanced position taken by the LSO.

What are the conclusions and takeaways?

    1. There is always a duty on the part of the investigator to look at and consider evidence that can confirm or refute the positions taken by both sides. Failure to do so may compromise the neutrality of the investigation. In Watson, had the investigator done some basic testing of Ms. Sweeney’s evidence, they would have uncovered serious challenges to her credibility; they also would have appeared more neutral.
    2. Findings should not be made until all documentary evidence has been reviewed and all parties have been interviewed and given the opportunity to respond to critical information that will be relied on by the investigator.
    3. There is no set standard of fairness that is owed for an investigation; what is considered fair will depend on things such as the nature of the investigation and of the allegations that are made. In Watson, the Court noted the importance of disclosure in professional discipline proceedings which, at a minimum, should include copies of all witness statements and notes of the investigator. In contrast, this degree of disclosure is not always required in workplace investigations.

An investigation that is unfair is fundamentally flawed. As we learned from Watson, this can lengthen investigations, cause investigators to make incorrect findings, and lead to time and expenses being wasted, which can be a costly oversight (Mr. Watson sought costs of $900,000). For workplace investigators, this can mean costly time spent going back to conduct missed interviews or completely redoing an investigation.

1 https://soar.on.ca/civicrm/event/info?id=92&reset=1.

2 Bruce Best, “Fairness in investigations” (May 11, 2021), online: Rubin Thomlinson Insights <https://rubinthomlinson.com/fairness-in-investigations/>.

3 Watson v. Law Society of Ontario, 2023 ONSC 1154 (CanLII), at para 97.

4 Ibid., para 37.

5 Ibid., para 97.

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