|The obligation to cooperate: always relevant ||The obligation to cooperate: always relevant ||http://chad.ca/en/members/professional-oversight/the-syndics-office/476/the-obligation-to-cooperate-always-relevant|
Occasionally, the Discipline Committee of the ChAD is asked to rule on violations involving members engaging in obstruction, despite clear legislative provisions prohibiting such behaviour.
In 2009 and 2010, the Committee reiterated that when the syndic conducts an investigation, he enjoys powers similar to those of the police. And these powers even extend to third parties.
Specifically, on February 10, 2010, the Discipline Committee of the ChAD found two claims adjusters guilty of having obstructed the work of the syndic.1 Let’s take a closer look.
A Telling Example
In January 2009, the syndic asked several claims adjusters to produce certain documents and information regarding their conduct with regards to a specific file. The claims adjusters believed that the syndic was on a “fishing expedition” and hired a lawyer to represent them. What was the result? During a six-month period, they interfered five times with the syndic’s investigative work, and in so doing, contravened the Code of ethics of claims adjusters.
The adjusters justified their refusal to provide the documents requested by claiming that the syndic had harassed them and abused his power. However, the Discipline Committee rejected these grounds.
“This ruling reminds us that when the syndic requests information or a document, the professional has no choice but to provide what is requested,” explains Me Claude G. Leduc. “Neither the professional nor the Discipline Committee has any right to question the syndic’s methods. The syndic’s powers of investigation are similar to those of the police.” In his opinion, believing it was a “fishing expedition” showed a lack of understanding of the syndic’s role. “The syndic does not go fishing without information,” Me Leduc points out. “As soon as he receives information from an insured, a colleague, the media or even an anonymous source, he has authority to investigate.” And refusing to cooperate with the syndic is not a wise thing to do.
Me Leduc adds that when in doubt, you can always ask the syndic for further information or clarification by mail or even by phone. If needed, the syndic may also grant the professional extra time to respond to his requests, if he sees that the latter is acting in good faith. However, according to Me Leduc, the syndic is entitled to not give any additional time to professionals who have already been granted an extension, as was the case here. In his opinion, “At the end of the day, interfering with the syndic’s ability to investigate also means interfering with the protection of the public.”2
Since then, the Discipline Committee of the ChAD has had to reiterate these principles on more than one occasion. In a case heard on October 23, 2013,3 the defendant was found guilty of obstruction pursuant to section 34 of the Code of ethics of damage insurance representatives for having failed to comply with a summons from the syndic. He was found guilty of this charge, and he was suspended for one year.
In another ruling, handed down on May 27, 2014,4 defendants were both found guilty of breaching sections 34 and 35 of the Code of ethics of damage insurance representatives for failure to respond to requests for information from the syndic. They were fined $2,000.
In a ruling handed down on July 7, 2014,5 the Discipline Committee of the ChAD reviewed the relevant case law concerning the syndic’s powers of investigation and the obligation of both professionals and third parties to cooperate with the investigation. In this case, given how long the obstruction had lasted, the threat to the protection of the public, and the defendant’s systematic refusal to respond to the requests of the assistant syndic, the defendant was fined $3,000 and suspended for 30 days.6
On September 24, 2014,7 the Discipline Committee of the ChAD found the defendant guilty of breaching section 56 of the Code of ethics of claims adjusters, due to his reluctance to provide the information the syndic had requested. He was fined $3,000.
As is clear from these rulings, obstructing the work of the syndic can take many forms, from reluctance to an unequivocal refusal to answer or failure to attend a meeting. The resulting remedies can vary from a minimum $2,000 fine to being temporarily suspended.
An Obligation that Even Concerns Third Parties
On December 17, 2009,8 the Discipline Committee of the ChAD reminded members that the syndic’s power to investigate also applies to the third parties he contacts.
In this case, a trustee in bankruptcy refused to give the syndic access to documents concerning a broker “unless ordered to do so,” because he was unsure as to whether he could give the syndic access to the information requested without violating privacy legislation. And yet the Discipline Committee’s order was clear, given the fact that the syndic’s primary function is to investigate and his powers of investigation allow him to obtain the information he needs to carry out his duties from anyone—even a third party—without even having to obtain a search warrant.
The substance of this ruling is in accordance with the ruling in a case heard before the Supreme Court of Canada, Pharmascience v. Binet, 2006 SCC 48, according to which both professionals and third parties must cooperate with the syndic’s investigation or face penalties.
In conclusion, refusing to cooperate with the syndic is not the best thing to do.
A reminder regarding relevant regulatory and ethical provisions
The Act respecting the distribution of financial products and services
342. 342. No person may hinder the work of a person conducting an inquiry, in particular by misleading that person.
The Code of ethics of damage insurance representatives
34. A damage insurance representative must answer without delay any correspondence from the syndic, the co-syndic or an assistant to the syndic in the performance of the duties devolved upon them under the Act and the regulations thereunder.
34.1. A damage insurance representative must, in particular, appear before the syndic, an assistant of the syndic or a member of their staff as soon as he is required to do so.
35. A damage insurance representative must not, directly or indirectly, obstruct the work of the Authority, the Chamber, one of its committees, the syndic, the co-syndic, an assistant to the syndic of the Chamber or a member of their personnel.
The Code of ethics of claims adjusters
54. . Claims adjusters must answer without delay any correspondence from the syndic, the co-syndic or an assistant to the syndic of the Chamber in the performance of the duties devolved upon them by the Act respecting the distribution of financial products and services (chapter D-9.2) and its regulations.
55. Claims adjusters must attend any meeting as required by the syndic, the co-syndic, an assistant to the syndic or a member of their personnel.
56. Claims adjusters must not, directly or indirectly, obstruct the work of the Autorité des marchés financiers, the Chamber or one of its committees, the syndic, the co-syndic, an assistant to the syndic or a member of their personnel.
By Me Marie-Josée Belhumeur, LL.B., syndic
Chambre de l’assurance de dommages v. Benoît Mayer et Michel Guertin, 2009 CanLII 73927 (QC CDCHAD).
2 The comments on these rulings were first published in
La ChADPresse, March April 2010, vol. 11, no. 2.
Chambre de l’assurance de dommages v. Pierre Vézina, 2014 CanLII 4584 (QC CDCHAD).
Chambre de l’assurance de dommages v. Marc Belzile et Marie-Claude Belzile, 2014 CanLII 30258 (QC CDCHAD).
Chambre de l’assurance de dommages v. Marc Gignac, 2014 CanLII 41706 (QC CDCHAD).
Chambre de l’assurance de dommages v. Marc Gignac, 2014 CanLII 76158 (QC CDCHAD).
Chambre de l’assurance de dommages v. Brigitte Bisaillon, 2014 CanLII 62657 (QC CDCHAD).
Chambre de l’assurance de dommages v. Pierre Fecteau et Jean Gagnon, 2009 CanLII 72969 (QC CDCHAD).
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