Alleged actions at law firm party sparks legal spat

Lawyers at a notable Toronto labour law firm who advise employers on dealing with sensitive workplace issues have become embroiled in their own storm centring on allegations of inappropriate sexual conduct, which have surfaced in an explosive $2.3-million defamation case.

The case involves David Cowling, a partner at Mathews, Dinsdale & Clarke (MDC), who advises employers on how to deal with a range of labour issues, including sexual harassment and "poisoned workplace environments."

He has sued two junior lawyers, who have left the firm, for defamation and intentional interference with economic relations, after they told his partners he engaged in inappropriate sexual conduct at a firm party in January 2009 at the Toronto nightclub Cheval.

It's just the latest case involving sexual issues and law firms to hit the news. McCarthy Tétrault has been fending off a $20-million sexual discrimination case brought by former partner Diane LaCalamita.

In 2007, George Hunter, the former head of the Ontario's legal regulator, the Law Society of Upper Canada, was suspended from practising law for 60 days after sleeping with a client.

In a profession where lawyers work long hours, sit in positions of power and often socialize together in situations where alcohol flows freely, they are exposed to such complaints.

In this case, Mr. Cowling, 43, alleges that Adrian Jakibchuk, a fourth-year lawyer, and Sarah Diebel, a second-year lawyer, maligned him when they spoke to other partners and staff about Mr. Cowling's conduct at the party.

Ms. Diebel, who resigned from the firm in June 2009, now practises law at a corporation, while Mr. Jakibchuk, who left the firm last month, is seeking employment.

The after-dinner party, which Mr. Jakibchuk helped organize, was held to celebrate the firm's nationally recognized annual labour law "moot" competition, where teams of law students from across the country argue a labour relations case before a panel of legal experts. The participants celebrate with a dinner followed by a party. The firm has since cancelled the after-dinner party for future "moot" competitions.

Mr. Cowling, a father of three daughters, alleges in his statement of claim filed on March 8, 2010, that the junior lawyers' statements were "malicious," reckless as to their truth," "false" and "defamatory."

"The manner of making and dissemination of the defamatory statements by Ms. Diebel and/or Mr. Jakibchuk was wrongfully, maliciously and deliberately designed to cause significant injury to the plaintiff's professional and personal reputation and as a result the plaintiff suffered mental distress, humiliation, apprehension and stigmatization," the claim reads.

The lawyers deny that they defamed Mr. Cowling or set out to discredit him. They stand by their observations and maintain their statements were true and covered by qualified privilege, a defence to defamation. They deny engaging in intentional interference with economic relations.

The allegations in the pleadings have not been proved in court. The case is in the preliminary stages and a trial is not expected until 2011.

Andrew Burns, Mr. Cowling's lawyer, said his client "looks forward to being vindicated in court. There was an independent investigation in the matter involving the complaint made by Ms. Diebel. That report is confidential and he would welcome the release of that report."

Paul Schabas, Mr. Jakibchuk's lawyer, said "I have never seen anything like this before, where you see an associate get sued by a partner for libel over a workplace matter. It's an extraordinary situation and very distressing."

Counsel for Ms. Diebel, Beth Symes, declined to comment.

Mark Contini, the acting managing partner at Mathews, Dinsdale, said "the current litigation between Mr. Cowling, Mr. Jakibchuk and Ms. Diebel is a private lawsuit between a member of the firm and two former members of the firm to which the firm is not a party. Because of this, the firm has no comment."

Mr. Cowling's lawsuit includes a 13-page letter that Ms. Diebel drafted and provided to partner Neil Ornstein, which she asked him to keep "confidential and read it in a private place, as I regret to say its subject is unpleasant." The letter forms the basis of Mr. Cowling's claim for libel and is an appendix to his statement of claim.

The copy of the handwritten letter, which has redacted many names of the lawyers involved, described in detail the events that allegedly took place that night, including allegations of people being "extremely intoxicated," lap dances, and partners of the firm hitting on younger women.

Ms. Diebel's letter alleged that Mr. Cowling and another firm lawyer, whose name has been redacted, were "rubbing their butts up against me and other women, putting their arms around me at any chance they got and flirting heavily. This behaviour from my perspective was unwelcome. While I like to dance, I don’t like being groped."

She wrote that she was "very ashamed of being complicit with this night of debauchery."

According to Ms. Diebel’s statement of defence, filed on June 11, 2010, "there was bottle service and unlimited drinking. A number of attendees exhibited behaviour that could only be described as a lack of professionalism or intoxication." She alleges that "one of the senior associates of MDC was so intoxicated that he left the club without his coat or keys and vomited in the taxi cab as it left the club."

In her statement of defence, Ms. Diebel said she "understood that filing a sexual harassment complaint could be a career limiting move, but also understood that she had a legal and moral obligation to bring the moot weekend conduct to the attention of MDC."

"She made the statements in good faith, believing them to be true, which they were, and in confidence to Mr. Ornstein, who, as a partner in the firm, had an interest in learning of the potentially serious misconduct of one of his partners."

She cited the firm's sexual harassment policy, which defines unwelcome advances and sexual remarks as a form of sexual harassment. The policy advises to "go to someone with whom you feel comfortable and give the details of the objectionable behaviour. There will be no reprisals for making such a complaint."

Mr. Jakibchuk's statement of defence, filed on April 27, 2010, states that following the party, he learned of Ms. Diebel's complaint and was later asked to meet with Mr. Ornstein and Joseph Liberman, another partner at the firm, to discuss the events. He said he was uncomfortable relating the information about a partner at the firm. According to his defence, "he was assured the matter would be handled delicately." His defence maintains the statements were true, and made in "good faith" and under the firm's sexual harassment policy.

"As an associate of MDC, Mr. Jakibchuk believed he had both a duty to his employer and a moral duty, based on his observations of what he had seen of Mr. Cowling's behaviour and the distress it was causing to Ms. Diebel, to respond to the inquiries of Mr. Liberman and Mr. Ornstein," the statement reads. "He made the comments in good faith believing them to be true, which they were, and in confidence to Mr. Ornstein and Mr. Liberman who, as partners, had an interest in learning of the potentially serious misconduct of one of their partners."

According Mr. Cowling's claim, when he learned his conduct was being questioned, he "immediately and unequivocally denied any allegations of misconduct" and requested that the firm "undertake an independent investigation of the false allegations."

Ms. Diebel and the law firm agreed to an independent investigation, and Kelley McKinnon, a lawyer with Gowlings, investigated the matter and filed a report with the firm in May 2009, shortly before Ms. Diebel resigned. That report is confidential and Mr. Contini, Mr. Burns and Ms. Symes declined to disclose it to the National Post.

Why Mr. Cowling would sue and disclose the firm's internal affairs — normally a taboo among lawyers — is open to speculation. His statement of claim noted that he receives much of his work from referrals and indicated that "discussions of the defamatory statements were widespread both within and outside [the firm]."

One legal observer suggested that in order to clear his name, he had to sue the lawyers to force the report to be made public or to achieve vindication by the court.

Mr. Cowling's claim also states that immediately prior to the party, Ms. Diebel was to be placed on a "watch list" because of her work performance, which the claim alleges was improperly communicated to her before the party, and she was subsequently terminated after the report.

Ms. Diebel's defence claims she "received nothing but positive feedback on her work and she specifically denies ... that anyone at MDC told her that her performance was in any way unsatisfactory or that she had been placed on a 'watch list.'" She maintains she resigned from the firm in June 2009.

(Published by National Post – July 15, 2010)

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