ou are representing the plaintiff, Paul Ehrlich, in a Small Claims Court proceeding

You are representing the plaintiff, Paul Ehrlich, in a Small Claims Court proceeding. During the 12-month period from January 2004 to December 2004, Paul advanced money from time to time to the defendant, Debbie Virk, with whom he was cohabiting. Debbie was out of work during that period, and Paul helped support her. When he began lending her the money, she agreed to pay it back. Paul claims that he loaned Debbie almost $12,000. He has waived the balance owing over $10,000 in order to bring his claim within the monetary jurisdiction of Small Claims Court.

Paul does not have receipts or cancelled cheques to prove the amount of the loan. All he can produce are his bank books for 2004. He claims that any amounts over $500 that were withdrawn were loans to Debbie. You have explained to him that there may be evidentiary problems with this allegation.

In February 2005, Debbie found a job. Her starting salary was $45,000 per year. In June 2005, Debbie broke up with Paul and moved in with a new partner. According to Paul, Debbie made no payments on the loan between the time she found work and the time she moved out. Paul is very bitter about the whole thing. “I gave her all that money because I loved her,” he told you during the initial interview. “What did it get me? I should have spent it going clubbing.”

In her defence, Debbie admits to owing $7,000 and proposes paying the amount owing in monthly installments of $350. You think this is a reasonable settlement, given Paul’s lack of proof of the loans. Paul is outraged. “I already gave up $2,000!” he shrieks. “I’m not going to lose another $3,000 on top of that!”

At the pre-trial conference, Debbie, who is unrepresented, shows up with her new partner. Paul spends his time eyeing the new partner and muttering insulting remarks about his appearance and intelligence to you.

Debbie offers to settle the matter for $7,500. She says she will pay Paul $500 up front and the rest in monthly installments of $350. The pre-trial judge remarks that she considers this a reasonable compromise, given Paul’s lack of evidence of the loans. Paul jumps to his feet and shouts, “She owes me $12,000! What do I have to do to get it back!” He slams out of the judge’s chambers.

You get up to follow him. As you are walking past Debbie’s chair, you roll your eyes and smile. Debbie smiles back at you.

You find an interview room and sit down with Paul, who is still upset, to discuss things. When you tell him you think it is a reasonable offer that he should accept, he blows up again. “But she owes me the money!” he shouts. “Whose side are you on? What do I have to do to get my money back?” At this point you lose your temper. “If you’re not going to take my advice, I’m quitting!” you shout. “Get yourself another agent to follow your goofy instructions!” You storm out of the courthouse.

When you get back to your office, you draft a reporting letter and final invoice on Paul’s file. You then move $500 that you have been holding as a money retainer out of your trust account into your general account. As far as you are concerned, that is the end of the matter. The trial is scheduled for a month’s time.

What professional and ethical issues arise in this situation?