Navigating the digital future: Law Society of Ontario’s virtual verification update

Navigating the digital future: Law Society of Ontario's virtual verification update

Co-written by: Kim Gale and Jessica Campolucci

New year, new rules! The Law Society of Ontario (LSO) has started the new year by implementing virtual verification requirements for lawyers and paralegals, effective Jan. 1/24. As Canadian society moves towards a more digital world, the legal profession is continuing to follow suit by adopting new virtual practices as financial misconduct and fraud continue to be a serious concern in Ontario.

In this article, we will delve into the essential components of these regulatory changes, aiming to provide a simple yet comprehensive understanding of their implications within the legal profession.

Why virtual verification?

In an era where digital advancements intersect with everyday life, the LSO recognizes the need for enhanced security and efficiency in all areas of law. The move to virtual verification is driven by a desire to combat

money laundering, mortgage fraud and identity fraud, which pose significant risks to the legal profession, especially in this post-COVID era.

When should I verify?

Identity verification of a client, third party or individual authorized to give instructions on behalf of an organization becomes required in various financial transactions, specifically when you are retained to provide legal services and you engage in or give instructions involving the receipt, payment, or transfer of funds. There are exemptions to this rule (s. 22(2) - (4) of by-law 7.1 under the Law Society Act). Some examples of when verification is required are when sending or receiving settlement funds or when dealing with certain real estate transactions. Note that whenever you are receiving funds for fees and disbursements from a client, verification is not required.

The importance of authentication

Lawyers and paralegals are now required to authenticate an individual's government-issued photo ID when using video conference or other virtual communication methods to verify their identity. Simply comparing the photo ID to an individual on a screen won't cut it anymore - a more digital, accurate process is now required.

How can I authenticate?

Lawyers and paralegals will need to meet with the individual virtually and employ two main methods for virtual authentication:

  1. Scanning with technology: Individuals scan their government-issued ID using a mobile phone or electronic device; and
  2. Comparing features: Technology is utilized to compare various features and security elements of their ID, ensuring its legitimacy.

Technology at your fingertips

 To use these two main methods, The Digital Identification and Authentication Council of Canada (DIACC) has compiled a directory of products that use biometric facial scans and government-issued IDs for verification.

For ease of reference, here are a few authentication technology platforms that may suit your needs:

  • Vaultie digital trust solutions
  • Treefort
  • lKosmos
  • Applied Recognition
  • AuthenticID

Note that each platform may have their own processes and costs associated. Some solutions even integrate with certain legal software, such as Clio, and real estate applications, which can help with data storage. It is advisable to thoroughly review each platform to identify one that aligns with your specific needs.

Alternative methods for virtual verification

Digital changes can be overwhelming for some. If virtual verification doesn't work for you (or your clients), there are three alternative methods for remote identity verification:

  1. Credit file method: Rely on information in an individual's Canadian credit file that has been in existence for at least three years.
  2. Dual process method: Use any two of three pieces of information from a reliable source containing the individual's name and address, name and date of birth or name which confirms they have a deposit account, credit card or other loan amount with a bank.
  3. Agent method: Have an agent meet with the individual to verify their identity through a written agreement.

No matter what method you choose, be sure to record the method used, along with the date.

Final thoughts

In summary, the LSO's virtual verification requirements signify a progression in the legal profession. By embracing technology, the legal community can address emerging risks while ensuring accessibility and efficiency. However, it's crucial to consider the potential impact of these changes on clients, especially in areas like estate litigation, where the average client demographic may be older. The introduction of new, virtual technologies might not always be appropriate and could pose difficulties. In some cases, choosing not to adopt virtual verification and opting for in-person methods or alternative virtual practices might be more appropriate.

As discussed, before using any virtual verification practice, be sure to thoroughly review all available software options. For more information and resources on the virtual verification process, review the LSO's website and all application rules and by-laws.

 

This article was originally published by Law360 Canada part of LexisNexis Canada Inc.

 

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