On November 22, 2022, the Law Society of Ontario announced that it would continue allowing law firms to use virtual verification without authentication until January 1, 2024. Virtual verification without authentication – a temporary measure during the COVID-19 pandemic – amended traditional lawyer obligations relating to client identification and verification.
This article will discuss virtual verification, lawyers’ client identification and verification obligations, and how these rules impact clients.
Lawyers Must Follow Client Identification and Verification Rules
The Law Society of Ontario imposes client identification and verification rules on all Ontario lawyers.
In most cases, lawyers are required to comply with client identification requirements when a client hires (or “retains”) them as a lawyer.
Specifically, lawyers need to obtain the following information from their clients:
- Name
- Home/business address and home/business telephone number (whichever is applicable)
- Occupation
- Third-party information (if the client is acting for or representing a third party)
If the lawyer’s client is an organization (other than a financial institution, public body, or reporting issuer), the lawyer must obtain the following information:
- An incorporation or business identification number
- The type of business or business activities they engage in
- The position and contact information for every person who is authorized to give instructions regarding the legal matter the lawyer has been retained for
The lawyer must also verify the identity of their client, the third party (if their client is representing a third party), and every person authorized to give instructions regarding the matter (if the lawyer is representing a business) in certain circumstances through a process referred to as “client verification.”
Client verification is required if a lawyer receives, pays, or transfers money on a client’s behalf or gives instructions in relation to the receipt, payment, or transfer of funds. Several exemptions apply – for example, a lawyer does not need to follow client verification requirements if their client is a financial institution, public body, or reporting issuer.
Client Verification Traditionally Required an In-Person Meeting
Before COVID, client verification happened in a law office. In this process, clients, third parties, or other authorized people provided their lawyer with their government-issued photo identification (such as a Canadian passport or Ontario Driver’s Licence). The lawyer then verified the client’s identity by reviewing the government-issued photo identification, ensuring the name and photograph lined up with the person they met, and recording the information provided.
The Pandemic Changed How Client Verification Happened
During the COVID-19 pandemic, lawyers were unable to meet clients in person. So, as a temporary measure, the Law Society of Ontario allowed lawyers to virtually verify their clients’ identity without authentication – meaning that they were not required to assess whether their client’s government-issued photo identification was authentic. However, the Law Society of Ontario recommends that lawyers authenticate their client’s government-issued photo identification using the following process.
The lawyer will ask the client to scan their government-issued photo identification with their mobile phone or electronic camera. Lawyers must then compare the features of the client’s government-issued photo identification with known characteristics, security features, and markers to ensure the identification is not fraudulent.
Alternate Verification Methods Are Available
In addition to virtual verification by review of government-issued photo identification, lawyers can verify their client’s identity using the credit file method, the dual process method, or an agent.
Under the “credit file” method, lawyers may review their client’s credit file if it has existed for at least three years and confirm that the name, address, and date of birth match the information provided by the client.
Under the “dual process” method, lawyers may review two of the following pieces of information provided by a reliable source who is not the individual:
- Name and address
- Name and date of birth
- Name and confirmation that they have an account, credit card, or loan with a financial institution
Under the “agent” method, lawyers may use an agent to meet with clients and verify their identity in certain circumstances.
After confirming that the documents are authentic, valid, and current and provided by reliable sources, the lawyer may complete their virtual verification.
Special Virtual Verification Rules Exist for Children
If a lawyer must virtually verify the identity of a client under the age of 12, they must also verify the identity of that child’s parent or guardian. Suppose the individual in question is between 12 and 15. In that case, the lawyer must obtain information from a reliable source that contains the name and address of the minor’s parent or guardian and confirm that the minor lives at the same address.
Why Lawyers Must Follow Client Identification and Verification Rules
The client identification and verification rules were created to target money laundering, terrorist activity, and other illegal activities. Essentially, they were created to ensure lawyers know who they’re working for and conduct the appropriate due diligence to ensure they are not inadvertently participating in illegal activities.
Beyond the client identification and verification rules, lawyers must never knowingly assist in or encourage dishonesty, fraud, crime, or other illegal conduct or tell their clients how to break the law without punishment – so these steps are essential for lawyers who handle client funds to ensure they are acting in accordance with Law Society requirements.
What Lawyers Do with Verification Information
The Law Society of Ontario requires lawyers to keep information, documents, and records relating to client verification for six years after completing the client’s work or the duration of the lawyer-client relationship, whichever is longer.
For more information on the client identification and verification process, review the Law Society of Ontario’s Client Identification and Verification flow chart.
What Ontario’s Client Identification and Virtual Verification Rules Mean for Clients
Ontario’s client identification and verification rules are in place to protect the public. When retaining a law firm (whether you’ve worked with them in the past or not), you will be required to participate in the client identification and verification process.
If you are unable or unwilling to provide government-issued photo identification, note that there are other alternatives for verification (such as the credit file and dual process methods noted above).
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