Two Toronto lawyers cleared of conflict of interest allegations in relation to their work for Conrad Black's Hollinger Inc. have been awarded $250,000 each to cover a portion of their legal costs in a long-running case before the Law Society of Upper Canada.
Lawyers Darren Sukonick and Beth DeMerchant, who both worked for Torys LLP, were seeking $3.6-million to cover their legal costs after being exonerated last year in a five-year legal battle with the Law Society.
A ruling by the Law Society Tribunal, issued May 23, awarded them a total of $500,000, but chastised the legal profession's ruling body for continuing the case against them even when it became evident it would not succeed.
Mr. Sukonick and Ms. DeMerchant were accused of violating their profession's conflict-of-interest rules starting in 2000 when the company agreed to pay a group of Hollinger executives, including Mr. Black, $80-million in controversial "non-compete" payments from the sales of various newspaper assets.
The Law Society alleged the pair should not have acted for both Hollinger and the group of Hollinger executives, but they were exonerated in a ruling last October.
In the costs decision released Friday, adjudicator William Simpson said he could not accept the lawyers' claims that the hearing against them was unwarranted from the outset.
But he said the Law Society should have abandoned the case in 2012 after the Law Society could not refute evidence the pair had presented at the hearing showing their actions were appropriate when dealing with sophisticated clients.
"The Law Society should have known that the proceedings had become unwarranted, as it had no reasonable chance of success," the ruling concluded.