Tony Merchant receives 8-month suspension from Law Society of Saskatchewan

High-profile Saskatchewan lawyer Tony Merchant has been disciplined by the Law Society of Saskatchewan for alleged inappropriate conduct involving a "threatening" letter pressuring a residential school survivor to use her settlement money to pay unrelated legal bills.

Merchant's licence will be suspended for eight months starting in February 2021. He told the Regina Leader-Post newspaper that he intends to appeal the decision and that the facts do not support the findings. CBC has contacted Merchant for a response.

The society found Merchant inappropriately withheld about $21,310 that was supposed to be paid to the woman through a federal settlement agreement for residential school survivors.

Merchant and his law group led the class action lawsuit against the federal government, which led to compensation for residential school survivors in 2005.

'We could sue you'

Merchant wanted the woman to use part of the settlement to pay prior legal bills for her and her son.

"We could sue you for the $21,310.83. My expectation is we would succeed with that law suit and obtain a judgment against you," wrote Merchant in his letter to the woman, who is not named in the decision.

"We could then seize your assets, your car, your bank account, or whatever, in order to collect these debts that you owe."

She subsequently agreed to let the law firm use the money for that purpose.

The conditions of the federal settlement dictated that compensation payments made to survivors must be provided to the recipient in full, minus legal fees for that particular lawsuit.

Committee says Merchant used tone of 'disrespect and intimidation'

The law society committee that delivered the penalty said Merchant knowing the woman to be a member of a vulnerable group was an aggravating factor.

"There seems to be a misalignment between the paragon of dedication to social justice described in the material presented by counsel for the Member, and the tone of disrespect and intimidation we found the Member to have employed in his interaction with this client," said the written decision.

The Law Society of Saskatchewan became aware of the case through Crawford Class Actions, an organization appointed to monitor the settlement process. Crawford made the complaint against Merchant on behalf of the woman.

Merchant Law Group fought efforts to have the firm return the $21,310 to the woman, but the British Columbia Superior Court ruled that the money was "impermissibly withheld" and directed the firm to pay the money back with interest. Merchant applied to appeal to the Supreme Court of Canada but was denied.

Past cases of discipline

Merchant has been disciplined by the law society before.

In 2002 he lost a bid to clear his name of misconduct charges. The Saskatchewan Court of Appeal upheld a finding that Merchant's aggressive recruitment of residential school victims reflected poorly on his profession.

In 2006 the society ruled that Merchant withdrew trust funds from another person without that person's consent.