The Lawyers Weekly

Ontario's chief justice calls for judges to expand their role as mediators

Cristin Schmitz — Fri, 03 Sep 2010 00:00:00 -0400

Despite some fierce opposition within his own ranks, Ontario's chief justice is calling for the judiciary to push beyond its comfortable decision-making role to conduct more mediations in civil cases.

Admitting his proposed cultural shift is controversial, especially amongst judges, Chief Justice Warren Winkler argues the time is ripe to plan seriously to make judicial mediation more routinely available to civil litigants (not just on an ad hoc basis) by integrating it into Ontario's regular court services and renovating court facilities to provide the necessary meeting rooms and access to technology.

If civil courts don't offer more judicial mediation a quicker and cheaper way of resolving disputes than trials the justice system will become less accessible and less relevant to most Canadians, he predicts.

However the chief justice stresses also that court-based mediation should supplement, not diminish, judges' core purpose of deciding cases. Mediation mustenhance the trial process, not supplant it, he says.

Chief Justice Winkler contends that the issue today is not whether we approve of the increased role of mediation that role is upon us, like it or not but whether this cultural shift should extend to court-based mediation, presided over by sitting judges.

He goes on to advocate that judicial mediation should be expanded beyond its present form because the judiciary is well situated now to meet this pressing demand within our civil justice system, even despite the views of those within the judiciary who would resist this development.

Nevertheless he acknowledges that some judges don't want, or have, mediation skills. Some also fear they must make the dreaded descent into the arena to broker deals, a role they see as conflicting with their core mandate to decide cases above the fray.

Not all judges are well-suited for this additional role and should not be dropped, or forced, into such a specialized milieu, Chief Justice Winkler stipulates. In fairness to all involved, the expansion of judicial mediation will only be effective if the judges carrying out the mediations are willing and able to do so.

He says, however, that growing numbers of judges feel that judicial mediation is now part of the lifeblood of an ever-evolving system of civil justice; we must have it to keep up with the changing needs and expectations of litigants.

He asserts that for the public, the issue, quite simply, is one of access to justiceThe parties deserve timely, cost-effective, holistic justice which mediation provides. The court system, which is, after all, in the business of dispute resolution, must provide a means by which a lengthy, expensive trial can be avoided through the provision of an early, meaningful investment in a one- or two-day mediation.

Chief Justice Winkler first made his case that judicial mediation should be expanded in an unheralded lecture in March at the University of Western Ontario's law school. His written remarks, obtained by The Lawyers Weekly, are slated for publication this fall in The Advocates' Journal.

They are the chief justice's clearest, and most forceful, public statement to date that the judiciary and the justice system must change gears if the public's needs are to be met.

Judicial mediation already exists in most jurisdictions. In Ontario, for example, judicial mediation is available to try to settle certain cases just before trial, while ad hoc mediations are done in a minority of other civil cases, at the discretion of the regional senior judge or administrative judge.

Equal access remains illusory, notes Chief Justice Winkler, an ex-labour lawyer and litigator who, as a judge, has successfully mediated many high-profile cases.

We all know that counsel cannot simply place a phone call to the local trial office and obtain a one- or two-day judicial mediation presided over by a knowledgeable judge, he observes.

Unlike those pre-trial dispute resolution steps mandated by the Rules, access to willing and able facilitative judicial mediators ebbs and flows, depending on the availability of the appropriate judge and on whether it is felt that mediation ought to be made available in the circumstances.

Judicial mediation can also boost lawyers' success, he notes. A judge's view has, it is often said, 'cachet' with clients, and in this way can help lawyers settle thorny cases. When judicial mediation is timely, informed, and independent, it works.

Chief Justice Winkler points out that judges are often in the best position to mediate cases because their views are taken seriously by the parties. Why then deny the public this value-added aspect of judicial participation in mediation? he queries.

He also warns that if courts refuse to address the public's obvious need and demand for judicial mediation, people with means will turn to private mediation, while most people will be denied the tools of an accessible, effective and modern justice system.

Yet there are plenty of hurdles to surmount before judicial mediation can be integrated into regular court services, he says. Traditional court rooms and premises don't lend themselves to mediation. Court schedules and scheduling practices don't currently have the required flexibility for scheduling mediations.

Offering ad hoc, expert, time-consuming mediations into the already intricate scheduling matrix, even if done thoughtfully, would likely add critical delays, and costs, to other parts of the court system, he elaborates.

To add to this complexity, mediations frequently go on well beyond normal business hours. This is a practice that falls outside the operational norms of our traditional court system and one that is not easily accommodated.

He concludes that a shift to judicial mediation in those cases which lend themselves to ADR will likely carry operational and infrastructural costs while requiring a thoughtful review of the diversity of skill sets needed on the Bench in the future, and consideration of how best to deploy these skills.

Change will not and cannot come immediately, he concludes. The challenges are real, but they are not insurmountable. If we are serious about meeting this demand [for judicial mediation] we must plan seriously.

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Tax accountant privilege

John Chapman And Adam Stephens — Fri, 03 Sep 2010 00:00:00 -0400

Should privilege extend to communications between tax accountants and their clients? As there is no tax without law, advising on the law is what tax accountants do. The English Court of Appeal is now examining whether privilege should be based on the nature of the advice or the qualifications of the person providing it.

In Canada, only communications with lawyers attract privilege. Our law treats client communications concerning tax differently depending on whether the client is communicating with a lawyer or a chartered accountant. This may seem illogical: both lawyers and accountants belong to highly skilled and regulated professions, and confidentiality is a hallmark of both. However, Canadian courts have not been sympathetic to accountants' claims of equal treatment.

In the leading case by the Federal Court of Appeal, Tower v. M.N.R., [2003] F.C.J. No. 1153, accountants were told that while confidentiality may be preferred, the tax accountant-client relationship is in no way as fundamental to society and the administration of justice as the solicitor-client relationship and that no overriding policy consideration exists so as to elevate the advice given by tax accountants to the level of solicitor-client privilege.

In England, a case currently under reserve in its Court of Appeal, Prudential v. Special Commissioner of Income Tax, [2001] 1 All E.R. 1113, suggests that the issue may be looked at afresh. In Prudential, the accountants claimed that what they were doing was functionally equivalent to what lawyers do.

The judge at first instance held that he was bound by the precedent that legal privilege was only associated with the advice of lawyers on tax law. However, he noted in modern conditions accountants have the expertise to advise on tax law and it is firms of accountants, rather than firms of solicitors, who (often) do give such advice and represent clients in disputes with the Revenue on many aspects of their tax affairs and accountants do what lawyers are described as doing in the cases that establish legal professional privilege.

The judge commented that differential treatment from a privilege point of view was illogical. He went on to add, however, that this might mean that rather than extending privilege to the advice of tax accountants, one could question whether privilege should continue for the advice of tax lawyers in the area of tax planning.

His observations of how advice is provided in the tax arena emboldened accountants as to the possibility of an appellate change in the law. They caused consternation among tax lawyers that their ancient rights to privilege were threatened. The regulatory bodies of both accountants and lawyers intervened at the appeal stage. There is every reason to expect that the matter will find its way to the new U.K. Supreme Court.

The most recent case in our Supreme Court on privilege is R. v. National Post, [2010] S.C.J. No. 16. There, the court refused to recognize a new, broadly based journalists' privilege. Its decision was based, in part, on the fact that journalism does not have any formal professional mechanism for licensing or regulating its members. As well, there was no general requirement or practice that journalists promise confidentiality to their sources. In contrast, the professional structure of the chartered accountancy profession in Canada is virtually indistinguishable from that of the legal profession. The requirement of confidentiality on client affairs is written into its codes of conduct.

The court in National Post went on to hold that although there was no general journalistic privilege, privilege might arise for particular communications if the four general criteria, known as the Wigmore criteria, were met on the facts. The essence of these criteria is that the communication must have been made in confidence, confidentiality must be essential to the relationship, the relationship must be one that is to be sedulously fostered and the public interest in protecting the confidentiality of the communication must outweigh the need for disclosure.

Arguably, the first three criteria are often met in advice provided by chartered accountants on tax issues. The fourth criterion involving balancing is less certain. The Supreme Court has held that the balancing exercise will involve the evidence presented by the parties and also judicial notice, common sense and good judgment.

Although it is unlikely that Canadian courts will recognize a class privilege attaching to tax accountant communications, it is possible that a case-by-case privilege may be recognised. For example, communications to a tax accountant relating to a reassessment or a voluntary disclosure issue might be more likely to attract privilege than would garden-variety advice from an accountant recommending a tax shelter investment.

The possible re-examination of the law in England and the principles-based approach to privilege enunciated by our Supreme Court in National Post both suggest we have yet to hear the last word on tax accountant privilege.

John Chapman is a commercial litigation partner with Miller Thomson LLP in Toronto. Adam Stephens is a partner at the same firm whose practice encompasses a wide range of commercial litigation with a focus on shareholders' rights and real property law.

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Biologic drug wars

Noel Courage — Fri, 03 Sep 2010 00:00:00 -0400

Most drug litigation to date has centred on conventional pharmaceuticals small and simple chemical drugs. A valuable, but more complex, prize will be on the table more often in future drug wars: biologic drugs.

Human growth hormone and the blood booster, erythropoietin, are two examples of famous protein biologic drugs that have already been copied. Many companies are developing copies of other biologic drugs, eagerly anticipating patent challenges or patent expiration in the coming years.
Billions of dollars are at stake internationally in the race to copy biologic drugs. Governments are under intense pressure to regulate this area.

Special rules for biologics

Copying a biologic is not straightforward, unlike a conventional pharmaceutical. Biologic drugs are often large and structurally complex. A copy of a biologic can potentially be similar to the innovator, but it won't be equivalent. For this reason, the copy is called a biosimilar drug.

Biosimilar companies want to get government marketing approval as fast and inexpensively as possible. They want to rely on the innovator's clinical data on the assumption that it shows that both the innovator drug and a biosimilar would be safe and effective. No biosimilar company wants to generate its own clinical trial data from scratch. Clinical trials are time consuming and can cost hundreds of millions of dollars. In contrast, innovators want biosimilars to provide substantial clinical trial data. The extent to which a biosimilar can rely on an innovator's clinical data is a key battleground.

Biosimilars in Europe, Canada and the U.S.

The European Union is a leader in regulation of biosimilar approvals. It approved biosimilars for human growth hormone, filgrastim and erythropoietin. Legislation and detailed guidelines have facilitated approval of biosimilars by reliance on innovator clinical data.

The U.S. Food and Drug Agency (FDA) approved a growth hormone biosimilar in 2006, but emphasized that this did not establish a pathway for approval of other biosimilars. The growth hormone drug is relatively small and its mechanism of action had been extensively studied. The regulatory implications for other biosimilars remained unknown.

Health Canada approved the same growth hormone biosimilar in April 2009. There was also no clear Canadian guidance on a biosimilar approval framework.

Even though there was no U.S. or Canadian legislation in place, the approval of biosimilar growth hormone was significant because it indicated that biosimilars would be allowed to rely on innovator drug clinical trial data to a certain extent.

The path ahead

As 2010 began, there was still no clear biosimilar approval pathway in the U.S. and Canada. The U.S. had endured several past failed attempts at legislation. Health Canada had circulated draft guidance (policy) documents for public review and comment.

Health Canada finalized its guidance document in March 2010. It set out principles for biosimilar approval by reliance on innovator clinical data. Typically, Health Canada would require a new drug application to include comparison studies against the innovator drug as well as other types of supplemental testing.

Around the same time, the U.S. government passed the Biologics Price Competition and Innovation Act. It provided criteria for a biosimilar drug to rely on innovator clinical data. A biosimilar would need to show that it is highly similar to the innovator product with no clinically meaningful differences in safety, purity and potency. The Act also provided a 12-year exclusivity period to innovator companies. Biosimilars cannot be approved during this period. There is also a procedure to address patent infringement issues.

The FDA received the power to decide that certain complex products will not be eligible for biosimilar approval the copier will have to conduct its own extensive clinical trials. At the other end of the spectrum, certain biosimilars may be similar enough to the innovator product to be designated by the FDA as interchangeable.

This means that they may be substituted for the innovator biologic, for example by a pharmacist, without a doctor's approval. The FDA would require that the risks or diminishment in efficacy are low before designating a biosimilar as interchangeable. This will be a high standard requiring that i) the biosimilar produce the same clinical result as the innovator biologic, and ii) no increased risk is created by switching to the biosimilar.

These regulatory concepts are quite general. Many challenges still remain for regulators to determine the specific principles that will be used in the evaluation and approval of biosimilars. Expect the debate to heat up as the FDA consults industry, special interest groups and the public to get feedback on implementation of the legislation.

Noel Courage is a partner at Bereskin & amp; Parr LLP in Toronto. He is a U.S. and Canadian patent agent whose practice involves drug patent and regulatory issues.

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Greening the law office

Elaine Wiltshire — Fri, 03 Sep 2010 00:00:00 -0400

According to Greening Greater Toronto, an initiative from the Toronto City Summit Alliance, commercial buildings like those that house some of Canada's top law firms account for approximately one-third of greenhouse gas emissions in the Greater Toronto Area (GTA). Commercial buildings also consume 37 per cent of the electricity and 17 per cent of the natural gas.

There's lots of attention paid to residential programs that promote recycling and energy efficiency, says Linda Weichel, managing director of Greening Greater Toronto. But it was determined [by research from the Toronto City Summit Alliance] that not enough attention is given to the commercial sector yet.

This is really a case where a lot can be done to reduce the environmental impact, but, for a number of reasons, not a lot has been done.

As part of Greening Greater Toronto's mandate to tackle the issues surrounding the environmental impact of commercial buildings, the Greening Our Workplaces Tenant Series launched in March with a presentation by Gowling Lafleur Henderson LLP on the success of the firm's energy-saving initiatives.

The program aims to bring together building owners and tenants to discuss what can be done to make workspaces throughout the GTA greener.

There didn't seem to be a lot of communication going on between those two groups, says Weichel. And there also wasn't a lot of communication between tenants [they] were working in isolation from each other rather than working together.
Weichel adds that one of the messages being presented during these meetings is that reducing environmental impact of commercial space is not only doable, but there is a business case for making these types of changes.

Stikeman Elliott LLP launched their GoingGreen Program in 2008, and subsequently became the first national law firm in Canada to be certified Carbon Neutral. As hosts of the second meeting of the Tenant Series on May 27, firm representatives spoke with other Commerce Court tenants about the success of their green initiatives.

Since the initiation of the GoingGreen Program, Stikeman Elliott has implemented many firm-wide changes with a focus on reducing their environmental impact specifically with an eye towards energy efficiency.

From something as simple as having sleep modes on printers and copiers to more extensive projects like installing 230 motion sensors in boardrooms and offices, the firm has taken a broad-based approach to going green.

A big thing we've done was to have a green committee in each of our offices, says Jean McLeod, chief administrative officer at Stikeman Elliott. People are obviously really engaged in environmental issuesso we have a long list of things that are constantly going through to see what more can be done.

Recently, the firm hosted its annual Six-Shooter Saturday party at the Calgary Stampede but this year's event had a distinctively green hue. By implementing various green policies, nearly 6,600 litres of recyclable and compostable material was collected diverting waste from landfills.

Over 600 guests enjoyed filtered water in lieu of bottled water an initiative the firm has also implemented in their offices throughout the country which saved approximately 2,000 bottles during the event alone. Other green touches included 100 per cent biodegradable plates, cutlery and napkins, as well as compostable biopolymer cups and complimentary public transit tokens for the ride home.

Being environmentally conscious is a year round commitment, said Lou Cusano, Stikeman's Calgary managing partner, in a press release about the event. Green policies are only effective when consistently implemented, even when we step outside the office to have a bit of fun.

Another message Greening Greater Toronto is trying to send out, says Weichel, is that businesses do not have to have huge capital investments in order to make the types of changes that firms like Gowlings and Stikeman Elliott have made.

It's just being conscious of how people conduct themselves in the workplace, she says. There's a lot that can be done just based on understanding the pattern of activity in the space.

For example, says Weichel, the way a space is oriented can reduce energy consumption. By placing workstations close to windows, the high traffic areas will have more natural lighting.

Both McLeod and Weichel agree that there is a business case for going green, even if a capital investment is made.

Businesses don't have to make capital investments, stresses Weichel, but if they want to there are financial incentives available.
According to McLeod, Stikeman Elliott worked with the BOMA Toronto Conservation and Demand Management program to help offset some of the capital costs of their GoingGreen initiatives.

McLeod adds that the investment they made towards energy efficiency was returned in about two years.

The firm also saved over 6 million sheets of paper in 2009 alone by simply setting the printers' defaults to print double-sided. Not only does it save paper and waste, it also reduces the amount of energy that goes into printing, adds McLeod.

The benefit of implementing sound environmental practices extends beyond the firm's bottom line.

It's great for recruitment, McLeod points out. It's also great for the engagement of the [employees] that we have because [they] feel a part of it they feel they're able to make a contribution.

In fact, Stikeman Elliott was identified as one of the Green 30 organizations by Hewitt Associates earlier this year. The list is based on a feedback directly from employees.

McLeod also adds that there has been a lot of positive involvement from the firm's leadership group, saying the partnership board has been very supportive of the initiatives from the beginning.

The feedback from firm's clients has also been positive, since companies in all business sectors are looking at best practices when it comes to the environment.

A lot of what we're doing we share with [clients]. But a lot of it is learning from each other and seeing what other people are doing is there low hanging fruit or are there other things that are more substantive that we could be doing.

This sharing of knowledge and experience is built directly into the message that Greening Greater Toronto is trying to spread on Bay Street and throughout the GTA.

Measuring energy use or having a sense of behaviour and its impact is a great starting place, Weichel says. But, it's really about starting the conversations if they haven't been started already.
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Explosive allegations emerge in Quebec's inquiry on nominating judges

Luis Millan — Fri, 03 Sep 2010 00:00:00 -0400

Barely a week after abandoning a lawsuit that sought to dissolve a provincial commission of inquiry into Quebec's system of nominating judges, former Justice Minister Marc Bellemare testified under oath that Liberal Party fundraisers, with the consent of Premier Jean Charest, pressured him to appoint two loyal Liberals to the bench and to promote a third as assistant chief justice to the Court of Quebec.

In explosive testimony before the commission headed by former Supreme Court of Canada Justice Michel Bastarache, Bellemare also alleged that on the day he announced he was resigning in 2004, Charest reminded him that he was sworn to secrecy and could not disclose information regarding the role that party fundraisers played in nominating judges.

But under cross-examination on the second day of hearings from commission lead counsel Guiseppe Battista, Bellemare conceded that he had no corroborating evidence nor witnesses to back up allegations that rocked Quebec's legal and political circles. The only evidence he produced were cryptic notes he scrawled on a piece of cardboard while watching a hockey game on the day of his resignation, which he said he tucked away and forgot about.

Maybe there are people who at the time were aware of this and could confirm it to you, but I don't have documents or audio or video of that, said Bellemare, who appointed four judges to the Court of Quebec and promoted three during his tenure as justice minister from April 2003 until April 2004.

The inquiry was launched after Bellemare alleged last April that influential Quebec Liberal Party fundraisers tainted the judicial appointment process six years ago, with Charest's blessing. Charest fought back. On the same day that the premier appointed Bastarache to preside over a commission of inquiry into Bellemare's allegations, Charest launched a $700,000 suit against the former justice minister for false, malicious and defamatory remarks.

Though begrudgingly appearing before the Bastarache commission, Bellemare has not shied away from naming names. He dropped a suit to torpedo the inquiry he described as a costly and useless exercise only after obtaining an agreement that guaranteed his testimony would be broadcast. Bellemare testified that retired lawyer and businessman Franco Fava and chartered accountant Charles Rondeau pressured him on several occasions between July 2003 and August 2003 to make the right nominations. Bellemare added that Fava's pressure was colossal, and led him to call the premier on Sunday, Aug. 24, 2003 to request a meeting. On Sept. 2, 2003, nearly four months after the Liberals took office, Bellemare said that he met with the premier in a one-on-one meeting.

Bellemare testified that during the meeting he complained to Charest that pressure was being exerted on him to appoint Marc Bisson, a Gatineau, Que., lawyer and the son of a prominent Liberal organizer in the Outaouais, and Line Gosselin-Després, the cousin of former Labour Minister Michel Després, to the Court of Quebec. Bellemare said he was also pressed to appoint Judge Michel Simard as assistant chief justice to the Court of Quebec.

Bellemare has not disputed that all three jurists were competent and qualified for their appointments.

Justice Bisson was appointed to the Court of Quebec in November 2003, the same month that Justice Simard was promoted. Justice Gosselin-Després was appointed to the juvenile division of the Court of Quebec in January 2004.

Who appoints the judges in Quebecis it Franco Fava? Bellemare said he asked Charest during the meeting held at the premier's office. According to Bellemare, the premier replied that Franco is a personal friend, an influential party fundraiser. We need people like him. If he says to appoint Simard and Bisson, then do it.

Yet in spite of the pressure he alleges he faced to nominate certain judges, Bellemare testified that Quebec's judicial appointment process has its virtues.

I think our system is correct and functions well, said Bellemare. There are three stories for three nominations which had problems. No more. I consider them incidental errors endorsed by my premier. I said that's politics, unfortunately.

The three Court of Quebec judges who allegedly were nominated or promoted due to undue pressure will continue to sit on the bench during the inquiry hearings, said Renée Desrosiers, interim assistant to Elizabeth Corte, Chief Justice of the Court of Quebec.

The Bastarache commission will have no impact on the Court of Quebec's operations, whose regular activities will continue normally, said Desrosiers, reading from a prepared statement prepared by Justice Corte's office.

Bastarache commission spokesperson Guy Versailles declined to confirm or deny whether the three judges touched by the allegations have already been or will be interviewed by the inquiry's counsel. He also refused to state whether they will be asked to testify, pointing out that the names of witnesses are published on the inquiry's website a week before their scheduled appearance.

We do not disclose who we interviewed to protect their privacy and reputation, said Versaille. If we choose not to hear them before the public inquiry, the meeting we had with them holds no public interest. That is the course of action we have adopted, and one we intend to follow.

The Conseil de la Magistrature du Québec, an independent body that supervises the conduct of judges and organizes training programs for them, does not intend to look into the matter. According to André Ouimet, secretary of the conseil, the independent body only examines cases in which complaints have been officially lodged against judges that sit on the Court of Québec, the Professions Tribunal, the Human Rights Tribunal and municipal courts. I do not recall the conseil ever examining a case in which it lodged a complaint itself, said Ouimet.

A retired judge who spoke on condition of anonymity pointed out that the three judges who allegedly were appointed due to undue pressure by party fundraisers were described by Bellemare himself as being competent and qualified to hold the positions.

Their competence is not disputed, said the former judge. There is no question that these three judges are very well-regarded and well-thought of by the legal community. It's really unfair for them to be in that position.

The former judge added that while these may be trying times for the three judges who have been cited by Bellemare, they will no doubt continue to work diligently as they have for the past seven years.

A judge faces many circumstances during his career that are not easy, like rendering an unpopular decision. It takes a courageous judge to apply the law as he sees it, knowing he will be bashed in the media the next day. You have to live with that.

I have no doubt that these people have the moral fortitude to continue to do their work, with the same competence that they've been doing, said the former judge.

The commission, after hearing Bellemare testify for two days, had adjourned until Aug. 30, giving the Commission's counsel several days to sift through Bellemare's testimony, particularly since the former justice minister refused to be pre-interviewed.

All quotes translated from French by the author.

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Canadian Bar Association and Federation of Law Societies clash over ethics reforms

Cristin Schmitz — Fri, 27 Aug 2010 00:00:00 -0400

The Canadian Bar Association (CBA) and the Federation of Law Societies (FLSC) are butting heads over how best to reform law societies' ethical rules on conflicts of interest.

The 37,000-member national Bar association recently fired off a 16-page submission to the umbrella group for 14 legal regulators, disagreeing with key aspects of a long awaited report by the FLSC's Advisory Committee on Conflicts of Interest that was unveiled by the FLSC in June.

The Bar association's Aug. 17 response to the advisory committee, obtained by The Lawyers Weekly, contends that the advisory committee misapprehended the common law on conflicts, and did not sufficiently consult with the profession, before rejecting key reforms to the so-called current client conflict rule adopted as part of the CBA's Code of Professional Conduct last year.

If the FLSC proceeds to adopt its advisory committee's recommendations as part of its Model Code of Professional Conduct, lawyers will be left with conflicting ethical guidelines, notes Scott Jolliffe, chair of the CBA's Conflict of Interest Task Force which developed the CBA's reforms during 15 months of study and nation-wide consultation.

I think the public and the profession are better served by having the best appropriate rule reflected in both the regulations of the law societies and the ethical rules of the CBA, Jolliffe told The Lawyers Weekly.

We would like to open up a dialogue with representatives of the federation to work together in developing the best process going forward that would lead to the development of the best rule on current client representation that services the interests of the public and the profession, as well as the administration of justice.

The FLSC's president, John Campion of Toronto's Fasken Martineau Dumoulin, noted the CBA and the FLSC's advisory committee agree on many aspects of the conflict of interest rules. My first proposition is the [CBA Task Force] report was excellent and [their] answer was excellent, he told The Lawyers Weekly.

Campion noted individual law societies are currently consulting with their Benchers on how they wish the FLSC to deal with the advisory committee's recommendations. The FLSC's council will consider its members' feedback at its meeting next month.

Campion said he doesn't agree with the criticisms of the advisory committee's approach, but called the exchange with the CBA a superb debate.

I do agree that there is a fundamental difference in approach, he remarked. I would say the main division lies in what is required when you have a potential for conflict. And the federation's advisory committee report, leaving aside the sophisticated client, [stipulates you must have lawyer] disclosure and [client] consent. And who can be against disclosure? If you don't tell [clients about potential conflicts] they can't do anything about it. They can't protect themselves. And consent is the battleground.

In essence, the main bone of contention appears to be whether lawyers should be automatically prohibited from representing separate clients, who are adverse in interest in unrelated matters, unless they get informed consent from the clients (i.e. following adequate disclosure to the clients). The FLSC's advisory committee says yes to such a rule, based on its view of the public interest and Supreme Court of Canada authorities.

However the CBA has adopted a less black-and-white substantial risk principle as its litmus test. Its model code stipulates that a lawyer may simultaneously act for separate clients, who are adverse in unrelated matters, if there is no conflicting interest: defined as an interest that gives rise to a substantial risk of material and adverse effect on representation.

In commentary to its rule, the CBA says material and adverse effect on representation includes impairment of the lawyer's relationship with a client.

Presumably, therefore, under the CBA's rule, if a lawyer suspected that his current client, A, whom he represents in suing B, might lose confidence in their lawyer-client relationship if the lawyer took on B as a client in an unrelated matter e.g. drafting B's will the lawyer would be obliged to disclose the potentially conflicting interest to A, and obtain A's consent to take on B as a client.

The CBA had been fervently hoping since it reformed its Code of Professional Conduct that the FLSC would embrace the Bar's proposed reforms. Although the FLSC's Model Code of Conduct is non-binding, member law societies look to it for guidance in their ongoing efforts to try to harmonize their binding rules with fellow regulators across Canada.

However the FLSC's advisory committee, chaired by Toronto Bencher Bonnie Tough, rejected the CBA's proposed relaxation of the current client rules in force in some provinces, which the CBA regards as unduly stringent, unrealistic and counter-productive.

The CBA and the Advisory Committee on Conflicts of Interest share much common ground, writes the CBA, but we disagree on an issue of profound importance. There are real and serious difficulties, for clients and lawyers alike, with the Rule proposed by the Advisory Committee. We urge the Federation to engage in further consideration and consultation with a view to developing the best rule in the public interest. If further consideration and consultation is not possible, it would be preferable to allow the common law to continue to evolve, and not codify one interpretation of the current law into an even more inflexible rule of professional conduct.

The advisory committee's report says the CBA's current client rule doesn't take sufficient account of the fiduciary relationship between lawyer and client. The potential exists for a current client to feel betrayed if, without disclosure and informed consent, the lawyer acts in a matter directly adverse to the client's immediate interests.

The advisory committee said the CBA's rule that a lawyer can act without disclosure and consent if a matter is unrelated and if there is no substantial risk of material and adverse effect on client representation is inconsistent with the rule set forth by the Supreme Court in the Neil and Strother cases.

We are mindful of the intersection of fiduciary law with law societies' public interest mandates, the committee writes. The public interest is a multi-faceted concept. It includes considerations of choice of counsel, a key argument the CBA makes in favour of a less restrictive approach to conflicts of interest. But there is a strong public interest as well in maintaining the trust that must exist between lawyers and their clients. The public interest duty of law societies is arguably not upheld by an approach to conflicts of interests that: permits lawyers to act against current clients; even if only in unrelated matters; where the new client's interests are directly adverse to the immediate legal interests of the current client; without the client's knowledge or consent.

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Summit provokes charges of Charter violations

Christopher Guly — Fri, 27 Aug 2010 00:00:00 -0400

While it now appears that Toronto police had no special powers to interrogate, arrest and detain people within a five-metre perimeter outside the recent G20 summit in the megacity's downtown core, the very law that featured that temporary regulation is itself unconstitutional, argues constitutional law scholar Errol Mendes.

He explains that in Committee for the Commonwealth of Canada v. Canada, [1991] 1 S.C.R. 139, the Supreme Court of Canada (SCC) held that federal regulations and airport officials that prohibited the distribution of political pamphlets at Montreal's Dorval airport (now known as Montréal-Trudeau) infringed on the freedom of expression of the two respondents (François Lépine and Christiane Deland).

The court was unanimous in its decision that s. 2 (b) of the Charter conferred a right to use public property for purposes of free expression, and the federal government did not possess the absolute power of a private owner to control access to and use of public property in this case an airport, says Mendes, a professor of law at the University of Ottawa's common law section and the editor-in-chief of The National Journal of Constitutional Law. A year later, in R.W.D.S.U., Local 558 v. Pepsi-Cola Canada Beverages (West) Ltd., [2002] 1 S.C.R. 156, the court again cited s. 2 (b) in upholding the right the union had to picket at secondary locations, such as retail outlets that carried the appellant's products.

By extension, the right to picket equally applies to political demonstrations, and therefore Ontario's Public Works Protection Act (PWPA), which gives guards or police officers the power to ask anyone approaching a public work to identify him or herself, and its controversial Ontario Regulation 233/10, are unconstitutional, says Mendes.

He explains that the regulation's provision of designating an area within five metres of a line drawn in an area surrounding the Toronto G20 summit is particularly troubling, since it has since been revealed that the zone was within the secured site and not, as previously thought, outside of it. If the police knew that in advance and went ahead and arrested people, they violated a whole bunch of Charter rights.

In its A Breach of the Peace preliminary report following the G20 summit, the Canadian Civil Liberties Association (CCLA), which had five of its 50 monitors arrested and detained during the two-day event, believes that police conduct was, at times, disproportionate, arbitrary and excessive, and that policing and security efforts failed to demonstrate commitment to Canada's constitutional values.

Even before the summit, the CCLA warned that cordoning off large areas of downtown Toronto could violate several sections of the Charter: s. 7, which guarantees individual liberty, including freedom of movement; and s. 2 (b), (c) and (d) that guarantee freedoms of expression, peaceful assembly and association.

During the summit, the invocation of the 71-year-old PWPA to give police the power to search, without warrant, any person entering or attempting to enter the security perimeter could constitute a breach of the s. 8 search-and-seizure protection in the Charter, according to Nathalie Des Rosiers, general counsel of the CCLA. She says the mass arrest of 1,105 people the largest in Canadian history, which resulted in 263 charges being laid, many of them involving conspiracy to commit a criminal act not only displayed the overreach of police, but violated s. 9 of the Charter (the right not to be arbitrarily detained or imprisoned).

We're worried that the way in which the breach-of-the-peace provisions of the Criminal Code were used by police may be unconstitutional, says Des Rosiers, who is on leave as a professor in the University of Ottawa's civil law section. They're not supposed to be used by police just to arrest people because they're fed up with them protesting. Police have a duty to protect the right of peaceful assembly.

The CCLA has called on federal Justice Minister Rob Nicholson to strike a committee to modernize the old-fashioned and antiquated Criminal Code provisions dealing with unlawful assemblies and riots. The association also wants an independent public inquiry into the actions of the police during the G20 summit, and has called on the Ontario government to either amend or repeal the PWPA that gave police broad powers that are inconsistent with current Charter requirements.

In force for a week leading up to and including the G20 meeting, Ontario Regulation 233/10 was only printed in The Ontario Gazette after the summit, on July 3, and has been dubbed the secret law that was only known to police and government officials.

Dave Vasey, a 31-year-old York University student believed to be the only person charged with breaching the five-metre regulation under the PWPA, showed up at Toronto's Old City Hall in late July only to discover his name was not on the docket and the court did not have information on his case. Vasey, who says he was just standing with a friend outside the security perimeter two days before the G20 summit, was surrounded at one point by as many as 10 Toronto police officers. When asked for identification, he declined to show any and was promptly arrested and searched.

But the PWPA only allows police to conduct a search if a person is entering or attempting to enter a public work, which didn't apply to Vasey, says Howard Morton, a Toronto criminal defence lawyer who, as a member of the Law Union of Ontario, agreed to act pro bono on G20-related cases, including Vasey's.

Morton is part of a chorus, which includes the CCLA, critical of the Ontario government for secretly introducing the PWPA regulation and not widely informing the public about it in advance of the G20 meeting.

If you want people to obey a law, the first thing you do is tell them it exists and explain to them what they're required to do or what they're not allowed to do. Whenever additional powers are conferred on the police, issues involving the Charter of Rights are automatically raised, says Morton.

Vasey plans to commence civil proceedings against the Ontario government and Toronto police. As well, two class actions have been launched by G20 summit protesters, including a suit against the Toronto Police Services Board and the Attorney General of Canada.

Those cases could benefit from the recent SCC decision in Vancouver (City) v. Ward, [2010] S.C.J. No. 27, according to Mendes. Until that decision, the lower courts gave the impression that as long as there was no malice on the part of the police when they were performing their duties even if they ended up potentially violating Charter rights there was no right to damages. What the Ward decision seems to imply is that even without malice, an individual is entitled to compensation.

In a unanimous ruling, the SCC upheld a trial decision that awarded Vancouver lawyer Cameron Ward $5,000 for a strip search that violated his s. 8 Charter right to be free from unreasonable search and seizure.

Ward, who had previously represented clients in civil rights cases against Vancouver police, including student complainants following the infamous pepper-spraying incident during the APEC (Asia-Pacific Economic Cooperation) meeting of Asia-Pacific leaders in Vancouver in November 1997, was partially strip searched and spent four-and-a-half hours in squalid conditions in a provincial jail on Aug. 1, 2002 after police acted on a tip and mistakenly accused him of planning to throw a pie at an event then-prime minister Jean Chrétien was attending in the city.

When he was finally released after the public ceremony, police refused to apologize and Ward went to B.C.'s Supreme Court to seek compensation from the City of Vancouver, which employs the police, and the province, which operated the jail at the time he was detained.

Now, he has the precedent-setting SCC decision to refer to when representing clients who find themselves wrongly arrested and detained. For the first time in 28 years since the Charter was enacted, the Supreme Court of Canada was asked whether damages are an appropriate remedy for a violation of a Charter right, and the justices said quite clearly and unequivocally, yes they are, says Ward, who has appeared before both the Commission for Complaints Against the RCMP and B.C.'s Office of the Police Complaint Commissioner.

In my view, fundamental civil rights and liberties cannot be suspended simply because some important people are coming to town. It's very important that the police and other security agents fully respect citizens' constitutional rights and that there ought to be consequences if they willfully violate those rights.

With allegations that women detainees during the G20 summit were strip searched and sexually assaulted by male police officers as outlined in a July 26 letter to federal Public Safety Minister Vic Toews from Claire Tremblay, national coordinator for the Ad Hoc Coalition for Women's Equality and Human Rights Mendes would like the SCC to render an opinion not only on the conduct of police during the G20 summit, but on the PWPA they, in hindsight, wrongly relied on to wield their authority.

Political expression is the core of our democracy, and this was one of the most serious attempts to undermine that most important aspect of freedom of expression, he explains.

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Why we need public input on the land registry system

Steven Pearlstein — Fri, 27 Aug 2010 00:00:00 -0400

Ontario's new Electronic Land Registration Services Act appears to be an attempt by the provincial government to raise cash by selling off registration access rights, and potentially even registration data, to address its budgetary needs.

The Act received royal assent on May 18, and will come into effect on a day to be proclaimed by the provincial government without debate or public input. It was introduced on March 25 as part of one of the government's budgetary bills, and passed through the legislature without any real public knowledge, no publicity and no input from users of the electronic land registration system.

The Act was introduced and administered by the Ministry of Finance, rather than the Ministry of Government Services, which normally oversees the land registration system. During the last 30 years, the Ministry of Government Services and its predecessors have proactively sought and responded to input from the major stakeholders prior to virtually all legislative and regulatory amendments to the electronic land registration system. The system we have now is far more user friendly, and operates far better, as a result of this input from the major stakeholders and the corresponding cooperation from the ministry involved.

In other words, this convention of prior stakeholder consultation works well and the public is much better off for it. Why the change in procedure?

This new Act provides for the government to enter into service provider agreements where it will license to a service provider the access, use, copying, selling and other dealings with the land registry and writs data, and the resulting sublicensing to the end user. The Act also creates the office of the Electronic Land Registration Services Commissioner to oversee and regulate the financial and operating relationships among the government, the primary land registration services provider and the subsequent end users. This Act also exempts these agreements and the information provided to the new commissioner from public scrutiny under the Freedom of Information and Protection of Privacy Act.

Shortly after the passage of the new Act, the public became aware that the Ontario government was seriously considering creating one big SuperCorp by amalgamating Ontario Power Generation, Hydro One, Ontario Lottery and Gaming Corp. and the LCBO in order to sell 20 per cent or more of this large entity, thereby raising cash to address the current liquidity needs of the government. The new Act seems to be another attempt by the provincial government to raise additional cash by selling off access rights, and possibly the registration data, to address the cash needs in the current budgetary cycle.

One need only consider what happened with the sale of Highway 407 or the sale by the City of Mississauga of a portion of its hydro corporation, to appreciate the potential problems and long-term pain that can result from such decisions by the government.

The current electronic land registration system was built in a joint venture with Teranet Inc. and the provincial government subsequently entered into an exclusive license for the operation and management of the electronic land registry system with Teranet Inc. This license expires in 2017, and the government has until at least 2014 to decide whether it will renew Teranet's exclusive license on its expiry in 2017.

Other alternatives to consider at that time include having the province operate the land registration system itself or, more likely, inviting competitive bids from multiple third parties for the subsequent operation of the electronic land registration system. There does not appear to be any reason to have this new piece of legislation passed and service provider agreements negotiated now.

A number of real estate practitioners and other electronic land registry system users have started to question the fees charged by Teranet, especially in view of the corresponding fees being charged in other provinces for access to their newer electronic registry systems. Although we may be faced with the current exclusive license for its remaining term, there is no reason not to open this service to competition after the expiry of the current license.

This concept of the partial sale of public assets to raise money to invest in current budgetary items is problematic in several ways.

The first concern is that any potential buyer will only invest significant dollars in all or some of these assets if they gain a reasonable degree of control over such assets. That loss of control generally hurts the public, since there are significant increases in access fees and other costs, and a reduced ability of the government to make decisions in the public's best interest.

Money raised by selling public assets is, for the most part, only partially used to pay down debt or for long-term infrastructure projects which will benefit the province. Large portions of the money raised from prior asset sales by the province have been used to subsidize current services to the public which have no long-term financial benefit. Some skeptics have alleged that these subsidized services serve only to buy votes for the government in the next election. What we end up with is short-term gain in exchange for long-term pain.

At the very least, the government's decision regarding the electronic land registration system should be the subject of an open consultation and public debate well in advance of any final decision. This would allow the public and all stakeholders to be fully informed and express their views.

At the time of writing this article, the negative publicity and public outcry appear to have caused the provincial government to reconsider the creation and sale of the so-called SuperCorp. We can only hope that similar pressure will cause the government to reconsider any rash decisions about the electronic land registration system.

Steven Pearlstein is a partner at Minden Gross LLP in Toronto and a certified specialist in real estate law.

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Should you upgrade to Microsoft Office 2010 now?

Luigi Benetton — Fri, 27 Aug 2010 00:00:00 -0400

You use it just about every day, and you suspect you'll upgrade to the latest version sooner or later.

Whether you do so sooner hinges on whether the changes and new features in Microsoft Office 2010 will make a difference in your law practice.

Faced with a changing world order in which Microsoft's dominance of the office software market continues to ebb, the Redmond, Wash.-based giant is going on the offensive to reclaim market share. It now competes with free office suites like OpenOffice.org and online alternatives like Google Docs, entering their markets with offerings designed to make defectors look again at Office, perhaps even luring them back to the full, installed package.

Microsoft's biggest competitor, though, may be prior versions of Office which, for many people, are good enough.

In the recently released Office 2010 for Windows (the Mac version will arrive in the second half of the year), Microsoft has not only kept the ribbon from Office 2007 but also put it in all other components of the Office suite, including Outlook.

Do you still use Office 2003 and wonder what the ribbon is? It's a sort of 'super toolbar' that sits at the top of the window, explains Matthew MacDonald, the Toronto-based author of Excel 2010: The Missing Manual and Access 2010: The Missing Manual, both for the Pogue imprint of O'Reilly. Most people find it eventually makes them more productive, but it takes some getting used to.
MacDonald didn't mention criticisms of Office's 2007 look. Microsoft did listen to those criticisms, particularly regarding the disappearance of the File menu in Office 2007, which led Microsoft to redo that part of the interface.

There's a new 'backstage view' where you can take care of file management tasks like opening a recent file, saving or uploading a file, printing, and so on, says MacDonald.

Jason Brommet, Microsoft Canada's senior product manager for Office, explains the name. If your Office document is your movie, Backstage is for the directors, sound crew and so forth.

It's also where Office keeps the metadata toolbox, and that irks Dominic Jaar. I would have hoped Microsoft would understand that metadata is important, it should be up front, says the Office 2010 beta user and CEO of Montreal-based Ledjit Consulting Inc. Now it's even further back.

Microsoft created new Office gadgetry meant to help people handle media, like photos and videos, within a given Office document. You can clip two minutes out of a ten-minute video inside Office instead of using a third-party tool, Brommet offers by way of example.

Outlook has become a hub of sorts, where people can monitor not just email but also Facebook, Linkedin, Twitter and other social networks.

E-mail can now appear ordered by conversation, similar to threads used in Gmail or Mac Mail. This feature may help people deal with piles of email on a given topic in less time by helping them focus on said topic.

Jaar isn't too impressed with this effort, though. Outlook organizes messages by subject, not a deeper analysis of the message, he says. Conversations aren't ready for prime time.

Since large numbers of people work in online office suites like Google Docs, Microsoft also offers pared-down versions of its Office applications via the web. This marks a departure for Microsoft in that it will let people view and edit Office documents on computers that don't have Office installed, and it's providing this set of tools for free.

The free Office Web Apps will meet the requirements of people who have modest collaboration needs, MacDonald says. But in a professional environment, people usually choose something like SharePoint for document tracking, revisions, change management, workflow, and so on.

Another possible strike against Office web apps: they store files on the Internet rather than a person's computer. Canadian lawyers may be wary of web-based applications that make their data vulnerable to a U.S. Patriot Act-based search.

Jaar does use Google Docs for non-confidential information, but unless the client agrees, I'm not comfortable suggesting people move to the cloud unless the cloud they use is in Canada, where at least they'll be compliant.

Whether Microsoft creates smartphone clients matters little. Third-party software developers have offered applications for reading and editing Office documents on handhelds since the early days of Palm, and such tools are still popular.

One ongoing criticism Office continues to suffer stems from its complexity. There are no macro problems, Jaar says, just little glitches that you can turn off. But the switches are hidden deep in the software, so you have to search in help and on forums to find them.

It's the downside of having tons of features, unlike more user-friendly stuff that has fewer features.

To help anybody who has ever been stymied by the number of versions of Office Microsoft will offer, Brommet advocates lawyers get the Pro Plus package for its interaction between Office client applications and Microsoft's various servers (like Office Communicator) as well as the information rights management it affords (like defining policies around individual documents or e-mails).

Another server, SharePoint 2010, features Workspace (formerly known as Groove). This feature lets people create offline workspaces on their computers consisting of documents (and libraries) that reside in SharePoint.

People can also set up ad hoc workspaces and include collaborators outside a corporate network without calling on IT or requesting a VPN for said outsiders.

Microsoft claims Workspace allows for real-time collaboration. The term evokes visions of Google Docs-like editing of a given document by two or more people at exactly the same time, but Jaar disagrees with that perception.

Contrary to Google, you don't see the changes live, Jaar explains. It's still like SharePoint, with locked documents. It isn't yet a true collaborative platform??it's a first-generation attempt.

Still, Jaar favours Office 2010, if for selfish reasons. I hope everybody migrates to 2010 since it makes me sick to convert my documents to Office 2003 formats when I collaborate with my colleagues, he says.

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Inquiries

Luis Millan — Fri, 27 Aug 2010 00:00:00 -0400

When Simon Ruel was recently beckoned to be deputy chief counsel of the Bastarache Commission, the Montreal lawyer was delighted to have an opportunity to leave his imprimatur in the inquiry into alleged political interference in the nomination of Quebec judges even though he was mindful of the long grind that awaited him.

An experienced civil litigator, Ruel is well-versed with the inner workings of public inquiries. Senior counsel on the government litigation team at the Gomery Commission and commission counsel with the Cornwall sex scandal public inquiry, Ruel penned The Law of Public Inquiries in Canada, a recently published book that examines the legal and strategic issues behind inquiry bodies.

It's a privilege, remarked Ruel, counsel at the civil litigation services of the federal Department of Justice. It's not often that lawyers have an opportunity during their careers to represent a matter of public interest on specific incidents in a neutral and objective manner. It is very interesting work.

Though literally a staple of the Canadian legal and political landscape, with more than 1,500 federal public inquiries launched since Confederation, it remains unchartered ground for most lawyers. Often perceived as a means for government to delay action, public inquiries can and repeatedly have served as vehicles for examining and analyzing policy in ways that the justice system cannot, notes Ruel. Some inquiries have had such a notable impact that it has led to the creation of new institutions, such as the Canadian Security Intelligence Service spawned after the MacDonald Commission or the Canadian Blood Services following the Krever Commission. Others, such as the Walkerton Inquiry into the E.Coli contamination of the water supply, instigated legislative amendments.

Lawyers generally play two or three roles in an inquiry, that is, either act as a counsel for the commission or represent a witness or a participant, said Marie Cossette, of Langlois Kronström Desjardins in Montreal, who has taken part in three public inquiries. In all of these cases, in order to be able to effectively fulfill his role and play an influential role in the proceedings, lawyers must understand how inquiries function. But in general that is not the case.

Inquiries, like the judiciary, are independent, often endowed with wide-ranging investigative powers, convened in the wake of public shock, horror, disillusionment or skepticism to uncover the truth, as Supreme Court of Canada (SCC) Justice Peter deCarteret Cory put it in Phillips v. Nova Scotia (Commission of Inquiry into the Westray Mine Tragedy), [1995] 2 S.C.R. 97. Its rules and procedures, however, are far more supple than those governing the courts, with rules of evidence, for instance, allowing for hearsay to be introduced. They are also open and public in nature, airing on television or increasingly on the Internet, in a bid to help the public to understand the stakes, allow them to keep abreast of developments during the proceedings and in some cases even enable them to vent their frustrations.

But the combination of the presence of the cameras along with its compliant rules and procedures can make it a tough slog for lawyers involved in inquiries, particularly commission of inquiries, notes Sylvain Lussier, a Montreal lawyer with Osler, Hoskin & amp; Harcourt LLP who was the Government of Canada's attorney before the Gomery Commission. While the findings of a commissioner cannot result in either penal or civil consequences for a witness, Lussier points out that it can lead to collateral damage or taint a person's reputation. Indeed, a good reputation for most people is a person's most highly prized attribute, notes the SCC in Canada (Attorney General) v. Canada (Commission of Inquiry on the Blood System), [1997] 3 S.C.R. 440. With so much at stake, inquiries often end up adversarial, weighed down by an atmosphere more akin to an acrimonious trial than a fact-finding mission.

The price that people pay is often too high but it seems that it's a necessary evil, remarked Lussier, who strongly recommends lawyers about to embark in a public inquiry to get some expert media coaching in order to avoid the pitfalls. Due to the attention of the media, not only do you have to calculate the impression you are going to make on the commissioner, with your questions and interventions, you also have to calculate the impression you are going to make on television, on the media. So you end up having to weigh what is going to be less damaging for your client.

While conceding that it can be quite a challenge, Ruel urges commission counsel and lawyers representing participants and witnesses to cooperate in order to avoid lengthy delays and interminable legal disputes. From my perspective and having lived through it, in order for a commission of inquiry to function in a harmonious manner, all parties have to make concessions to avoid conflict, said Ruel. There is great value to having constant dialogue between the parties to ensure procedural fairness.

Lawyers also have to be aware of the importance of strategic planning, added Ruel. Lawyers must ask themselves fundamental questions such as if they are going to collaborate, how are they going to do so; what spin are they going to give to the evidence and testimony; how are they going to cross-examine and who is going to do it, all the while keeping in mind that in many public inquiries political considerations have to be considered.

Working in public inquiries requires far more than just legal preparation, said Ruel. Strategic considerations are important. One has to understand what is at stake and equally important understand what's at stake for your clients.

But regardless of whether they act as commission counsel or represent either participants or witnesses, lawyers too must be prepared to pay a price, warns Cossette. Most cases before public inquiries are complex and extremely time-consuming. Lawyers therefore should ensure that they have enough time on their hands to be able to read, analyze, and understand the case just as they would in a lengthy trial, added Cossette, who was counsel at the Gomery commission, deputy counsel to the Commission investigating the Concorde overpass collapse and represented Quebec's provincial police officers at the Poitras Commission.

Lussier takes it a step further. He says that lawyers should expect their practice to take a hit.

It makes a big dent in your practice because it becomes your one file, said Lussier. You cannot develop your practice. In fact, in some sense it can be damaging because whatever existing files you have you have to pass it on to your partners and you certainly can't take on new mandates.

Yet despite the challenges, neither Cossette, Lussier nor Ruel would even conceive of passing up the chance to work at a public inquiry. The mandates are fascinating, the work is rewarding, and you end up working with la crème de la crème as it's always the top lawyers who take part in inquiries, says Cossette.
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Lawyers could blow the whistle on clients to stop 'financial harm'

Cristin Schmitz — Fri, 20 Aug 2010 00:00:00 -0400

Canada's 14 law societies are considering relaxing their stringent confidentiality rules to allow lawyers to blow the whistle on clients who may be poised to commit fraud, or otherwise unlawfully inflict substantial financial injury, on individuals.

This summer an advisory committee of the regulators' national coordinating body, the Federation of Law Societies of Canada (FLSC), proposed a draft model rule of conduct that would permit lawyers to set aside their time-honoured professional duty to keep client information confidential when the lawyer believes on reasonable grounds that there is an imminent risk ofsubstantial financial injury to an individual caused by an unlawful act that is likely to be committed, and disclosure is necessary to prevent the injury.

The proposal to amend the umbrella group's Model Code of Professional Conduct (an ethical code which is purely advisory) stresses that any such disclosure would be discretionary not mandatory and that lawyers could only disclose as much confidential information as required to prevent the anticipated financial injury.

The proposed future financial harm exception to lawyer confidentiality which now exists in various forms in many U.S. states would break new ground in Canada if it is ultimately embraced by individual law societies as part of their professional conduct rules.

Although the proposed model rule was put forward at the FLSC's council meeting June 7 in Ottawa, the council deferred voting until its Sept. 23 meeting to give its members time to consult their law societies.

FLSC president John Campion of Toronto's Fasken Martineau DuMoulin told The Lawyers Weekly the federation and its member regulators continue to strongly defend confidentiality as the bedrock of the lawyer-client relationship.

However some law societies already permit lawyer-client confidentiality to be set aside in future harm situations involving the imminent risk of death or serious bodily harm. The proposed change would be extending that exception, he noted.

Financial harm can be as devastating as personal injury both are losses which can demolish your income capacity or your present assets, Campion said. And so the committee grappled with whether [the future harm confidentiality exception] would be extended to economic harm, and they decided that they would do so, but there are safeguards around that, recognizing that it is indeedhighly innovative.

Campion said the FLSC's council will debate the proposed exception after receiving feedback from the provincial law societies.

Should the draft model rule be adopted, it will likely trigger a broader debate within the profession, including amongst inside counsel and the family law Bar.

I find this proposed rule very troublesome, observed Toronto family law specialist Philip Epstein, an ex-Law Society of Upper Canada Bencher. Any rule which in any way interferes with solicitor and client privilege is difficult for lawyers to deal with. They cannot be in a confidential relationship with a client and be under some sort of duty to disclose to the other side, Epstein told The Lawyers Weekly.

Epstein said that even if law societies were to make disclosure of imminent financial harm purely discretionary, as recommended by the FLSC's committee, this places a lawyer in an impossible position because he might feel a moral duty to tell the other side, but have a legal duty to preserve and protect privilege. I think one should be very careful about getting into the law of privilege that has stood us in good stead for hundreds of years, he said. It worries me.

David Allgood, executive vice-president and general counsel for the Royal Bank of Canada, suggested the proposed rule change merits consultation with the in-house Bar, as well as review and thought to understand its possible ramifications.

Gavin Hume of Vancouver's Fasken Martineau Dumoulin, who chairs the B.C. Law Society's Ethics Committee and who worked on the FLSC's advisory committee which recommended the future harm exception, acknowledged the proposal deals with a very complex topic. He said the B.C. law society intends to consult with the B.C. Bar before it makes any changes to its confidentiality rule. However if a future harm exception is enacted, Hume said he doesn't think lawyers would be exposing themselves to liability by setting aside client confidentiality in accordance with such a rule.

There is so much discretion in this I think there is very little, if any, exposure on the part of the lawyer, Hume told The Lawyers Weekly. He or she has to make a judgment call. If they give it a considered approach [and] take ethical advice I think there is essentially no risk.

Hume said a lawyer learning that a client is involved in a Ponzi scheme is an example of the type of scenario the FLSC's advisory committee had in mind when it drafted the future harm exception. The committee, led by Edmonton criminal defence counsel Mona Duckett, also comprised Katherine Corrick, Adam Dodek and Sheila Greene.

The committee's proposed model rule was inspired by similar changes in 2003 to the American Bar Association's (ABA) Model Rule, which were triggered in turn by massive corporate failures and regulatory changes.

No Canadian rule of professional conduct expressly addresses disclosure of confidential information to prevent financial harm, the advisory committee says in its June 2 report advocating the proposed exemption.

The committee agreed that Canadian legal regulators should not modify our ethical rules merely because of an American initiative born out of the failure to regulate other industries. However we recognized that in some rare circumstances, pure financial injury could have devastating consequences for individuals, the committee explains.

Current ethical rules allow lawyers to disclose confidential information where necessary to protect the lawyer's financial interests in fee collection. In the rare case where a lawyer could prevent very significant financial harm by limited disclosure, but was ethically prohibited from doing so, the public interest would not be served. Further the public's perception of lawyers and the role we occupy in the legal system might suffer if we are seen to rank our own interests above the public interest.

Notably the proposed model rule would leave it up to individual lawyers to decide whether to disclose confidential client information in order to prevent financial harm. Whether disclosure should be mandatory or permissive was contentious, with the committee splitting 4-1 in favour of leaving it to the lawyer's exercise of discretion and good judgment.

The draft FLSC model rule is, in one sense, narrower than the ABA model rule which endorses disclosure not only to prevent, but also to mitigate or rectify, financial harm. However, the committee also chose not to limit its proposed rule to situations involving fraud or crime, instead setting the threshold at preventing substantial financial injury from an unlawful act which may include criminal, quasi-criminal or fraudulent acts that are contrary to criminal, regulatory or civil law.

The committee stipulates that the exception to the normal confidentiality requirements would kick in only when the potential financial harm would affect an individual, rather than corporate entities or governments.

In proposed commentary to the proposed model rule, the FLSC committee advises lawyers that in assessing whether disclosure of confidential information is justified to prevent substantial financial harm, a lawyer should consider such factors as the seriousness of the potential injury to others if the prospective harm occurs; the likelihood that it will occur and its imminence; the apparent absence of any other feasible way to prevent the potential injury; and the circumstances under which the lawyer acquired the information of the client's intent or prospective course of action.

The commentary emphasizes that confidentiality and loyalty are fundamental to the relationship between a lawyer and a client[h]owever, in some very exceptional situations identified in this sub-rule, disclosure without the client's permission might be warranted because the lawyer is satisfied that truly serious harm of the types identified is imminent and cannot otherwise be presented. These situations will be extremely rare.

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Reforming the disclosure duty in insurance contracts

Elizabeth Adjin-Tettey — Fri, 20 Aug 2010 00:00:00 -0400

New forms of marketing insurance products rely less on face to face dealings, and increasingly on impersonal interactions such as online applications. There is a corresponding increase in potential for breach of the disclosure duty when prospective insureds complete application forms without the assistance of intermediaries or the opportunity to ask questions before submitting proposals for insurance.

This emerging reality for marketing insurance products, coupled with the insurer's right of nullification of the insurance contract in the event of breach of the disclosure duty, raises to the question of whether the prudent insurer test should still be used to determine materiality. Adoption of a prudent insured standard will not only facilitate access to insurance, but will also better reflect the reasonable expectations of consumers.

Effective risk assessment by insurers is important for underwriting decisions; it ensures proper classification of prospective insureds, for example as standard or sub-standard risks, and determines whether an insurer will provide coverage and on what terms. Insurers' ability to adequately assess proposed risks depends to a large extent on information disclosed to them by the applicant for insurance that the insurer has no other means of knowing.

The rationales for the disclosure duty include avoiding moral hazards and preventing insurers from being deluded to provide coverage they would otherwise not have assumed had the insured fully disclosed all material facts at the pre-contractual stage. A prospective insured may not have deliberately withheld information material to the proposed risk with the intention of misleading the insurer. Failure to disclose may be because the insurer did not specifically request the information in question, or the prospective insured was unaware of either the obligation to provide information even if not directly asked about a particular condition and/or the relevance of that information to the insurer's underwriting decision in the circumstances.

Meanwhile, determination of whether particular information is material to the assessment of a proposed risk depends on how prudent insurers would view that information, specifically if it would have caused a reasonable insurer to have acted differently, for example by declining to insure the risk or doing so on different terms. It may take a person with some knowledge of the insurance system to appreciate the materiality of particular information for underwriting. Such knowledge may not be readily available or attributable to the average person seeking to obtain insurance.

The effect of the prudent insurer test is to hold many prospective insureds to a normative standard that they cannot realistically be expected to live up to. This is like holding the average person to the standard of experts or professionals in determining the appropriate standard of care in negligence cases. It is therefore questionable whether determinations of materiality should continue to be made solely from an insurer's perspective, without regard for how a similarly situated reasonable insured would have behaved or viewed the information in question as relevant for insuring the proposed risk.

The law should adopt a modified objective test that focuses on what a reasonable insured would have done in the circumstances. Courts already consider the perspective of the reasonable insured in interpreting questions in the application process, and ask how that person would have understood the question.

A reasonable insured test should also determine questions of materiality. Emphasis should be on what a reasonable person in the insured's situation would have considered relevant in underwriting the proposed risk. Relevant factors for that determination would include the prospective insured's experience with insurance contracts, the nature of the proposed risk, circumstances in which coverage is sought and the insurance amount. Failure to consult health care professionals or seek advice on particular matters would be considered unreasonable if a prudent person would be expected to do so in similar circumstances.

Serious consideration should also be given to limiting the disclosure duty to specific questions in the application process. However, there should be a further obligation to disclose what a reasonable person similarly situated would consider relevant. It is impossible for insurers to ask every conceivable question in the application process. Such an expectation could make application forms unnecessarily long, cumbersome and increase processing costs, which would ultimately be passed on to consumers.

A modified objective test strikes a fair balance between the interests of insureds and insurers by ensuring that an onerous disclosure duty is not imposed on applicants to disclose information when a reasonable person in their situation would not have appreciated its relevance in the circumstances. Prospective insureds will be obliged to disclose what a reasonable person would consider relevant in the circumstances, even if that information is not specifically requested.

Under such a regime, an applicant's actual or constructive knowledge that some information is relevant for the insurer's underwriting decision cannot be ignored. Failure to include the information will amount to breach of the disclosure duty, entitling the insurer to avoid the contract subject to the principle of incontestability for contracts that have been in existence for over two years and absent fraud.

A reasonable insured test for materiality will be consistent with the reality of the applicant's situation or what can reasonably be expected of persons in particular circumstances, thereby decreasing the chances of inadvertent or innocent breaches of the disclosure duty and the resulting loss of insurance benefits for those unfamiliar in the practice of insurance.

Like any objective standard for assessing human behaviour, a reasonable insured test for determining materiality will not benefit all insureds. However, it will protect insureds who act reasonably, even if their conduct falls short of what a reasonable insurer would have considered relevant in the circumstances.

Elizabeth Adjin-Tettey is the Associate Dean, Administration & amp; Research, of the Faculty of Law at the University of Victoria.

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Crossing the border with old convictions

Rosanna Berardi — Fri, 20 Aug 2010 00:00:00 -0400

Gone are the days of simply stating one's citizenship and entering the U.S. The Western Hemisphere Travel Initiative (WHTI), now in effect for over a year, requires all travellers to present a passport or other document that denotes identity and citizenship when entering the U.S.

Foreign nationals' passports are swiped against a comprehensive database that reveals criminal and immigration violations throughout the world. Many foreign nationals, who have crossed the border dozens of times without incident, now find they are inadmissible to the U.S. due to an old criminal conviction.

Foreign nationals are often shocked to learn they are no longer able to enter the U.S. to vacation, shop or work due to a criminal conviction that may be over 25 years old. In general, the U.S. Immigration and Nationality Act (INA) deems inadmissible those individuals convicted of committing, or having admitted to committing, crimes involving moral turpitude (CIMTs). Seemingly minor offences can become big challenges, since even a single CIMT can trigger inadmissibility. The INA regulations do not acknowledge foreign pardons, so even if a conviction has been fully pardoned in Canada, it remains on a foreign national's record at the international border crossings.

While no comprehensive list of CIMTs exists, there are general categories into which these crimes typically fall. The most common elements involving moral turpitude are: fraud, larceny and intent to harm persons or things. However, even within these elements, the case is rarely clear.

For example, burglary is considered to be a CIMT, while breaking and entering is not. Likewise, fraud is considered to be a CIMT, but passing bad cheques is not. Major crimes such as kidnapping, rape, prostitution and murder are all clearly CIMTs.

If a foreign national has a conviction for a CIMT, he or she has two options: 1) obtain a non-immigrant waiver, which is a document issued by the Department of Homeland Security which acknowledges and waives the underlying criminal offense; or 2) investigate whether the underlying conviction falls under the limited Petty Offence Exception of the INA.

While it sounds easy enough to obtain a non-immigrant waiver, think again. Processing times for such waivers are currently in excess of nine to 12 months and the government processing fee is US$545. In addition, some waivers are only issued for one year, which requires multiple applications to be filed.

If an underlying conviction is old, it is critical to determine whether it qualifies under the petty offence exception of the INA. If a conviction is deemed a petty offence, then the foreign national is not required to obtain a waiver and can enter the U.S. with appropriate documentation. To qualify under the petty offence exception, the foreign national must prove: 1) he has only one conviction and it is unrelated to substance abuse; 2) the sentence imposed for the crime is not more than six months in jail; and 3) the maximum penalty for the particular crime does not exceed one year in jail.

For example, a Canadian citizen may have one conviction for false pretenses under the Canadian Criminal Code which relates to the possession of stolen property. The Canadian was convicted summarily by the Crown and was given a conditional discharge and one year of probation. A conviction for false pretenses is generally held to be a CIMT.

However, such offences are deemed summary convictions, which result in a maximum sentence of imprisonment of six months. Because of this, such offences would qualify under the petty offence exception of the INA. As such, this Canadian citizen would not require a non-immigrant waiver and would be admissible to the U.S.

The implementation of WHTI has not only affected documentary requirements at the border. It has also impacted the criminal law system in Canada and throughout the world. Criminal defense lawyers must consider the immigration consequences of a criminal conviction. It is not enough to think that avoiding jail time will insure your client's entry to the U.S. Rather, a lawyer must analyze the conviction to determine if it is a CIMT and whether it meets the criteria for the petty offence exception.

The INA is a complex and confusing body of law. Don't gamble with your client's ability to cross the border.

Rosanna Berardi, managing partner of Berardi Immigration Law, is a former INS Inspector and INS Trial Attorney in Buffalo, NY and New York City.

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Bill padding

Christopher Guly — Fri, 20 Aug 2010 00:00:00 -0400

Bill padding has been an issue much discussed within the legal profession over time and it recently returned on the radar of some lawyers as a topic in the blogosphere.

Padding hours is a dirty little secret of the large firm world, according to the TechnoLawyer blog.

It is also the result of a billing system that is both stupid and evil, and which fosters bad incentives for lawyers, argues Philip Slayton, author of the controversial 2007 Canadian bestselling book, Lawyers Gone Bad: Money, Sex and Madness in Canada's Legal Profession.

He recalls that during his 17-year career practising corporate and commercial law with a major Bay Street law firm, partners and associates were tied to time-tracking software programs, such as the ironically named Carpe Diem, which billed clients based on six-minute segments.

Once you turn over timekeeping to computers, there's an incentive to exaggerate and maximize the amount of time spent on work for clients, says Slayton, a former dean of law at the University of Western Ontario, who looked at bill padding in his book and who still hears from Canadians about their appalling experiences with lawyers and how they got screwed with legal bills.
In my view, a highly educated and, one hopes, talented and perhaps experienced professional to charge according to time spent is inappropriate, he says.

The analogy I always use is that if you go to an art auction and want to buy a painting, you wouldn't ask how long it took the artist to paint it. Yet lawyers, no matter how good they are have, for some time, charged according to a stupid time-based system.
It was a different pre-computer world when Slayton began practising law in 1983. When it came time to bill, you would have a discussion with your client and estimate or appraise the value of the service you provided, he explains. It was almost a collaborative process, which was sadly on its way out.

If you could reach agreement on a bill today, you would inject fairness and honesty into the system that is not always fair and not always honest. That doesn't necessarily mean revenues would drop, but it would recognize value of the services provided.
Gary Luftspring remembers when value for work was more important than time.

Under the old model, lawyers would propose to clients what they intended to bill preferably with some parameters at the beginning based on how much work was done and its value, says Luftspring, a senior partner and litigator at the Toronto firm, Ricketts Harris LLP, who was called to the Ontario Bar in 1980.

When asked at the time about hourly rates, the senior partner at the firm I was with said, 'I'm not an electrician or a plumber. I don't bill by the hour.' '

Slayton, who stopped practising law 10 years ago, says that many veteran lawyers dislike hourly rates because they still think of practising law as a profession as opposed to a business.

In larger firms that see the practice of law as a business, junior lawyers feel the pressure acutely to bring in revenue. And the only way to do that is by billing time.

But Luftspring says the model of billable hours was introduced largely at the behest of clients who wanted to measure something in understanding a lawyer's fee.

In some ways, it's got some intellectual basis to it it's seemingly objective. The problem is, as we all know, measuring efficiency. I might be able to do something in an hour that's going to take somebody else six hours. Or, because of my reputation, I can make one phone call, where another lawyer might have to litigate an issue for a month.

Luftspring acknowledges there may be lawyers of less integrity and under some pressure who might bill for more hours than they actually spend on a file. But he never saw that when he was managing partner at Goodman and Carr LLP between 1994 and 2004.
The big issue is lawyers who underestimate the time they spend, not lawyers who pad their bills.

He believes the notion of rampant bill padding is an urban legend originating in the United States, where associates might be expected to turn out as many as 2,400 or more billable hours in a year.

In order to meet those very high targets, they may be adding hours to files that can bear it, says Luftspring. Do I know of any evidence of that? No. But any senior lawyer who sees hours on a file, which are unusual or out of proportion to the work done, is going to question it. Either an associate is grossly inefficient or something funny is going on.

But the current recessionary climate in the U.S. has made bill padding a very important issue, based on material Lisa Borsook, managing partner of WeirFoulds LLP in Toronto, has read.

The client suspicion seems to be that if lawyers are scrambling for work, they may be padding their bills.

If they are, it's contrary to the rules of professional conduct and she points out there are a bunch of ways to slay that dragon, at least in Canada.

Government agencies do so by sending out requests for proposals (RFPs) that require bids to commit to a fixed fee to do the work required.

Clients also have recourse if they suspect a bill is bloated. In Ontario, they can ask a court to determine whether or not money owed is fair remuneration for the lawyer or law firm in question.

Every law firm ought to be reviewing bills they send to their clients, says Borsook. They have to ensure the level of sophistication of the lawyer doing the work is appropriate and they're not paying two lawyers instead of one.

I make sure that a client doesn't get double-billed while I train someone to be a better lawyer.

But Borsook, who also leads the leasing practice group at WeirFoulds, says the 85-lawyer firm tries to ensure it never gets to that acrimonious stage.

I don't want to send a suspicious bill to a client under any circumstances and we explain that to all of our associates and partners. And for those who contest or complain about the size of their bill, we have a conversation.

She says that dialogue has to include the possibility of unforeseen circumstances.

For instance in a litigation, a lawyer might give a client a fixed fee to defend against a claim based on a set period of time. But if opposing counsel motions you to death or showers you with paper, the client's lawyer might incur unanticipated time on the file, and need to raise the amount owed.

I do commercial leasing and have often told clients there's no good reason in the world why I can't finish a lease in five hours, explains Borsook. And then the lawyer on the other side makes that prediction impossible to come true.

She says the conversation with clients also has to consider their economic health.

If they're going through tough times, we're not here to exacerbate their problems. We try to work with clients to make sure they survive whatever economic difficulties they're having and continue to have a good relationship with them.

In Luftspring's view, what's driving the debate over billing is not the number of hours but the value clients perceive they are or are not receiving for those hours.

Lawyers should be asking their clients, 'If you want me to do this and cover all risks, it's going to take this amount of time and this much money. If you're prepared to take some risk, I won't do the following things and it's going to cost a lot less.' The last 20 per cent of a file usually takes 80 per cent of the time the closing of all the doors to risk are often the hardest things to do and are the most time consuming.

Where we have failed as a profession is to engage in that dialogue with clients about risk at the beginning.

But Slayton argues that the failure is in the time-based billing system, which promotes padding.

It places bad incentives to not do things in a speedy and efficient way, and encourages exaggeration. It makes lawyers work much longer than they might otherwise need to work laboriously and pointlessly moving stacks of paper, one page at a time, from one side of their desks to the other.

Canny corporate counsel, who wield considerable power over law firms in light of the large accounts they have with major corporations, tend to be vigilant over the legal bills they receive, says Slayton, whose next book Mighty Judgment, about the Supreme Court of Canada will be published by Penguin Group (Canada) in March 2011.

Big Bay Street or Wall Street firms deal with transactions so huge that hundreds of millions or billions of dollars are at stake, and the legal bill could be one or two million dollars. For corporate clients, that could be a drop in the bucket and gets swallowed and nobody pays attention to it.

He says that law societies could end time-based billing as a non-ethical practice or clients could just refuse to pay bills they believe are padded.

Getting the legal profession to voluntarily stop basing bills on time is unlikely, adds Slayton.

It would also be a good thing to mitigate the ethos that practising law is a business and not a profession but that's not likely.

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Law school and the risk of irrelevance

Jordan Furlong — Fri, 20 Aug 2010 00:00:00 -0400

There's a problem with our lawyer training process, one we've managed to finesse for the past several decades but that we can't keep ignoring. We can identify it with a simple question: What is the purpose of a law degree?

If you put that question to most law schools, they'll probably tell you a law degree should provide fundamental instruction on jurisprudence, shape views about the nature of justice, and help students learn to think like a lawyer. If you ask most members of the Bar, however, they'll probably say a law degree should prepare future lawyers in practical terms for the practice of law.

It doesn't matter which answer is better; what matters is that the two groups with the most at stake in legal education have starkly different views of its purpose. We've all experienced the result: our legal careers head in one direction for their first three years and then, at the start of the articling term, are yanked down an entirely new path for which we've not been prepared.

This all stems from the marriage of convenience into which schools and the Bar entered years ago. The profession needs some sort of basic educational process to lay the groundwork for law society accreditation, and the existing LL.B. (or J.D.) fits the bill. Law schools need something to make the time and tuition of a law degree worthwhile, and designating the law degree as a Bar admission prerequisite does the trick nicely. Win-win, right?

Not anymore. The gap between what a law degree provides and what a competent lawyer requires to start a career has grown wide over the past couple of decades and will become positively canyonesque throughout the 2010s. The articling year is already overmatched trying to bridge this gap. Continuing legal education can't solve the problem either, not at 12 hours a year of mostly substantive-law updates. Nobody is giving new lawyers the training they need.

What training is that, precisely? Lawyers need the tools of effective 21st-century practice: small-business skills, technological facility, collaborative work approaches, cultural and emotional intelligence training, and the basics of time, knowledge and project management. Future law practices will require these skills on a daily basis, yet we continue to train tomorrow's lawyers for the 1990s.

New lawyers also need immersion, from day one of law school, in the interests of clients. They need to understand that client value is the most important yardstick against which the merits of legal services are to be measured. And they need to take to heart the fact that the inability of a client to afford legal services is more than just a minor inconvenience of the system.

Finally, new lawyers need daily instruction in professional responsibility: not just knowing our canon of ethics and why each entry exists, but also accepting ethics' role at the core of our decision-making process. Professionalism might be the only thing that separates lawyers from other legal service providers of the future; as a competitive factor if for no other reason, it's essential we learn it early.

It's no answer to say that law schools aren't set up to provide this instruction: they can be. Look at Washington & amp; Lee Law School in Virginia, which devotes its third year to professional development through simulated and real practice experiences in litigation and transactional law; or Northwestern Law School in Chicago, which has made courses in quantitative analysis, strategic decision-making, and the dynamics of legal behaviour mandatory in an accelerated two-year degree program.

Law schools might feel aggrieved by all this, arguing that ultimately, it's the bar's responsibility to ensure its new members' competence. I think that's right but it also just underlines the problem facing the schools. Law societies are under no obligation to continue to use a law degree as a default Bar admission requirement. If those degrees aren't relevant to what the Bar thinks are lawyers' baseline educational requirements, the Bar will eventually look elsewhere.

Law schools need to appreciate that the legal profession is, essentially, their customer base: law firms (and the clients they represent) purchase law schools' stock in trade (law graduates). That market is now undergoing tremendous change in a new professional economy. Law schools that fail to notice this, and to respond accordingly, are taking enormous risks.

Jordan Furlong is a partner with Edge International who specializes in analyzing the extraordinary changes now underway in the legal profession worldwide. He is also a senior consultant with Stem Legal and head of its Media Strategy Service. He authors the award-winning blog Law21: Dispatches from a Legal Profession on the Brink, http://law21.ca.

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Lawyers' union takes on Quebec, alleges illegal practice of law

Luis Millan — Fri, 13 Aug 2010 00:00:00 -0400

Quebec's two law societies have concurrently launched an investigation to determine whether agencies, departments and ministries of the Quebec government are employing and hiring civil servants who are engaged in the illegal practice of the legal profession, following grievances lodged by an organization representing provincial government lawyers.

The Association des juristes de l'État (AJE), a union representing nearly 1,000 lawyers, notaries, and other legal professionals, submitted 96 official complaints over the past few months before the Barreau du Québec and the Chambre de Notaires du Québec after analyzing more than 1,600 job descriptions of civil servants, alleging that civil servants who are not called to the Bar are providing legal advice and consultations on legal matters. Whoever practises the legal profession without being called to the Bar is guilty of an offence and is liable to the penalties provided in s. 188 of the Professional Code, which includes a fine of not less than $1,500 nor more than $20,000 or, in the case of a legal entity, of not less than $3,000 or more than $40,000.

According to the AJE, the culprits consist of no less than 15 ministries including the Ministry of Revenue, the Ministry of Finance, the Ministry of Natural Resources as well as agencies and departments such as the workers' compensation board, pension regulator Régie des rentes du Québec, the vehicle insurance department, and the Treasury Council.

I don't want to obtain a condemnation at any cost nor do I want to target civil servants, remarked Marc Lajoie, AJE's president, who met with officials of both law societies at the end of July to discuss the situation. I don't want to find ourselves immersed in trench warfare, and have to prove that there was illegal practice of the profession in each case. I want to be to able solve the problem (through negotiations) and have the government recognize that there are tasks that should be done only by lawyers and notaries who are members in good standing of the law societies for the protection of the public, to ensure the security of transactions made by the government and for ethical reasons.

The Chambre des Notaires, though it has launched an inquiry into the alleged transgressions, has already taken the first step towards seeking a political and administrative resolution. In early July, officials of the notary law society met with Michel Bouchard, the deputy minister of the Quebec Ministry of Justice, to express their concerns, said Michel Vermette, the Chambre's assistant executive director, legal services. Chambre officials also met recently with the new batonnier of the Barreau to discuss this situation which troubles us as much as Mr. Lajoie, added Vermette.

Quite honestly it is out of the question to go after the Quebec government for illegal practise of the profession, said Vermette while adding that the Chambre is nevertheless diligently examining each and every complaint lodged by Lajoie on behalf of the AJE. We are working with the Barreau on this, and we want to raise their awareness through other ways. We have decided to channel our efforts into putting administrative and political pressure on government authorities.

Gaston Gauthier, who is responsible for overseeing investigations on the illegal practice of the profession for the Barreau, would only confirm that he is in the midst of analyzing the situations that alleges the illegal exercise of the profession. Gauthier said he was bound by rules of confidentiality.

Lajoie suspects that both the Barreau and the Chambre want to tread lightly because they fear that the Quebec government may pass legislation that would amend An Act respecting the Barreau du Québec and the Notaries Act to exclude Quebec civil servants from the application of the two pieces of legislation that govern the legal profession. That frightens them, said Gauthier. With good reason. The Quebec government has already done it. The Ministry of Employment and Social Solidarity is no longer obliged to use a lawyer when it pleads or defends a case before the Administrative Tribunal of Québec. Under s. 102 of An Act respecting administrative justice, the Minister of Employment may be represented by the person of his choice in matters of income security or support or social aid and allowances.

The general principle is that the government must be represented by lawyers before the courts or tribunals but they changed the law in cases of income security so that the Ministry of Employment and Social Solidarity could be represented by civil servants who are not lawyers, explained Lajoie.

The provincial lawyers' union faces another hurdle. The Barreau and the Chambre are still smarting over their failure to obtain a declaratory judgment and an injunction against the provincial tax authority after the Quebec Court of Appeal ruled last May in Barreau du Québec c. Québec (Procureur général), [2010] J.Q. no 5006 that civil servants who analyze, prepare and render decisions by interpreting and applying legislation are not illegally exercising the legal profession but rather acting on behalf of ministers.

In a ruling that highlights the difference between enforcing laws by an administrative authority and performing legal analysis, the Court of Appeal found that civil servants who examine, analyze and make decisions on objections filed by taxpayers contesting notice of assessments or notice of determination are administrative decision-makers who apply facts to a case by following ministerial guidelines and interpretation bulletins composed by jurists.

It is important that we examine the complaints lodged by the AJE in light of the recent ruling by the Quebec Court of Appeal, said Vermette. We will therefore have to examine the job descriptions of each of the jobs that allegedly illegally exercise the profession and compare it with the job descriptions of the opposition agents to determine whether there are similarities.

But Lajoie argues that none of the complaints he lodged before the Barreau and the Chambre involve administrative decision-makers.

There is a difference between applying the law and interpreting it, said Lajoie. The complaints that were lodged do not target people who apply the law but those who are asked to interpret it.

The Quebec Ministry of Justice declined to comment, since the matter is now the subject of an investigation by the Barreau and the Chambre.

All quotes translated from French by the author.

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CBA welcomes its first president from 'north of 60'

Cristin Schmitz — Fri, 13 Aug 2010 00:00:00 -0400

As befits the son and grandson of lobster fishermen, Rod Snow knows how to gaff a buoy and haul out lobster traps from the Bay of Fundyan unusual skill-set even for an east coast lawyer.

How much more remarkable, then, that the 57-year-old transplanted Nova Scotian will make Canadian Bar Association history on Aug. 17 by becoming the first Northern lawyer (i.e. from Yukon, Nunavut or the Northwest Territories) to take over the helm of the venerable 114-year-old organization.

The CBA's incoming president landed north of 60 when he left Davis & amp; Co.'s (now Davis LLP) Vancouver headquarters to open that firm's Whitehorse office in 1993.

At age 40, Snow says it was time for new professional vistas. I remember being interviewed for [law firm] articles, and they ask you where you want to be in five or 10 years, and I remember saying: 'Well I am not sure exactly, but I don't want to end up, at the end of my career, sitting in the same chair, looking out of the same window as I did when I started,' he recalls. For me this was an opportunity to do something different, and to get out of the urban environment...this was a chance, in some ways, to retool.

Before venturing north, Snow did briefly explore his prospects in Calgary and Toronto. But it would have been, in some ways, another tower and another city, he told The Lawyers Weekly.

Paradoxically, Snow's move to Whitehorse, pop. 25,690 (2009), gave the commercial solicitor, who does mergers and acquisitions, local opinion work, and securities, mining and aboriginal law, the professional variety and challenges he craved. He also got to spend more time with his growing family, amidst a close community and spectacular natural beauty.

To Snow's surprise, what was supposed to be a two-year Arctic adventure has stretched out to 17 years, and counting notwithstanding Yukon's long, dark and cold winters.

I like the community there is variety within the north, explains Snow, who has been president of both the Whitehorse Chamber of Commerce and the local Rotary Club.

He notes that as Yukon's capital, and as a business and cultural hub, Whitehorse's population is diverse and well-educated. Many of the people walking around in jeans are civil servants, geologists, engineers and scientists who arrive from far-flung parts of the world. I feel often we have the benefits of a small town, but we are a capital, Snow says. Our premier goes to the premier's meetings, but he is accessible. So if I really need to talk to him, I can. And he knows me on a first-name basis he knows half the population on a first-name basis.

Snow also cherishes his cross-cultural interaction with First Nations communities; he advises them on commercial opportunities and governance.

In addition, practising law in Whitehorse has provided a good income, with priceless fringe benefits. You are not going to make the big bucks that they make in the big city, he says. But you are not going to be spending your evenings at work either. All three of our kids went to the same school here downtown. I took the kids to school. When I was in Vancouver, I never did that. The school was another direction. Our lives were sort of chopped up, and didn't overlap in the sense that none of the people that I dealt with, either in my office, or my clients, with one exception, lived in the neighborhood that we lived in. Here, you go and pick up groceries with the kids, and they see their teacher. Or I have done work for two or three people on my street. It's just a different kind of community.

Community has always been important to Snow, who grew up in Port Maitland, N.S., a small fishing village near Yarmouth. His wife of 33 years, Heather McFadgen, a lawyer and director of human rights at the Yukon Human Rights Commission, hails from Cape Breton's Glace Bay.

Maybe the fact that we came from smaller communities made the move here easier for us, Snow observes. The couple lives five minutes from the Yukon River, and Snow often walks 30 minutes to his office along its shores, through boreal forest where eagles soar. That natural setting has profoundly affected their children.

Ben is a biologist for an environmental consulting company in Yukon. He is their fish guy, says his proud father. Noah is heading into his second year of arts at the University of British Columbia. Emily, a UBC science grad, hasn't ruled out law school.

Snow earned his LL.B. from Dalhousie, and his LL.M. from the law and marine affairs program at the University of Washington, where he wrote his major paper on fishery jurisdiction in Canada and the U.S. His undergraduate studies focused on politics, an interest acquired when his fisherman father took time off in the 1960s for 11 years in Nova Scotia's Legislature, including serving as Minister of Lands and Forests, Public Works, and Housing.

I never had a burning desire as a teenager or kid to be a lawyer, Snow admits. But I have always feltthat you needed to give back, andit struck me that lawyers had the opportunity to contribute to public life, to practise, to do a wide variety of things.

Such opportunities to contribute and give back are plentiful at the CBA, he notes. I am looking forward to the year. I think that as lawyers, we have a responsibility tospeak out on issues that affect the justice system, and we are going to continue to do that.

Among the resolutions CBA Council members will debate during the group's annual legal conference in Niagara Falls from Aug. 14 to 17 is a call for governments to provide additional funds for alternatives to the current practice of criminalizing persons with fetal alcohol spectrum disorder (FASD).

People with FASD, caused by maternal alcohol consumption during pregnancy, have brain damage which can affect their capacity to learn, control their impulses and understand the consequences of their behaviour. Studies suggest that a significant number of repeat offenders have FASD and that punishing such people doesn't work, while education, job training and family support hold promise.

As a northerner, the problem is close to Snow's heart. I think the first thing is to get government to pay attention to this, he says. Canada can do better for individuals who are born with this disability. The financial cost of what we are doing now[is] very high.

Snow would like to see judges given options in addition to putting FASD offenders in jail or on the streets. He acknowledges this may not be in sync with the Harper government's sentencing philosophy.

The government says: 'We are going to be tough on crime,' and I think the reality is that we need to be effective on crime, he says.

In addition to voting on resolutions, the CBA Council will hear Chief Justice Beverley McLachlin's annual report to the group on Aug. 14. The legal conference opens Aug. 15 with a keynote address, from Princeton economist and New York Times columnist Paul Krugman, on the trends and market forces that Canadians will face as the U.S. economy moves into recovery. On Aug. 16, federal Justice Minister Rob Nicholson will answer lawyers' questions about justice issues.

When not attending law-firm sponsored receptions at several award-winning Ontario wineries in the Niagara region, CBA members will be offered 24 continuing professional development sessions.

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Rewriting equality at the Women's Court of Canada

Fay Faraday — Fri, 13 Aug 2010 00:00:00 -0400

What would equality look like if women's perspectives were taken seriously? What if realities of poverty, disability, racialization, exclusion and power were placed at the centre of equality law, not the margins? If we took substantive equality seriously, how would our law and our world be different?

These are questions the Women's Court of Canada (WCC) is challenging Canada's legal community to engage in and they are doing it by literally rewriting Canada's equality jurisprudence.

The WCC is a loose collection of academics, litigators and human rights activists from across the country who share a concern that Canada's jurisprudence has failed to deliver on the Charter's promise of equality because it has lost sight of the goal of substantive equality. Instead, it keeps retreating into narrow formalism and fails to recognize real-world dynamics and harms caused by systemic discrimination.

Emerging from a 2004 colloquium on Charter rights, the participants decided to constitute themselves as a virtual review court that reconsiders leading Supreme Court of Canada (SCC)rulings on equality. They aim to show that our jurisprudence can support a more truly substantive and transformative vision of equality.

By rewriting leading SCC decisions, the WCC has created an alternate vision and a parallel body of case law which presents a creative and rigorous critique of Canada's equality jurisprudence. While they take a novel form, the WCC judgments are serious exercises in legal scholarship. Their concern is not solely with the outcome in SCC rulings, but more deeply with the legal analysis that produced those outcomes.

The WCC's first six judgments were published in the Canadian Journal of Women and the Law and are available on the WCC website at www.womenscourt.ca. These first judgments took on the analyses in the following decisions:

- Symes v. Canada (tax treatment of child care expenses);
- Native Women's Association of Canada v. Canada (Aboriginal women's right to participate in constitutional consultations);
- Eaton v. Brant County Board of Education (integration of disabled students);
- Law v. Canada (Minister of Employment and Immigration) (access to survivor's pension);
- Gosselin v. Quebec (Attorney General) (access to income assistance); and
- Newfoundland (Treasury Board) v. N.A.P.E. (pay equity).

The WCC members are currently preparing a second round of judgments, including rewriting the SCC's first s. 15 decision, Andrews v. Law Society of British Columbia, and its 2009 ruling in R. v. Kapp. In Kapp, the SCC rejected some of the more formalist analysis that emerged after Law and reiterated its commitment to Andrews. This provides the WCC with an opportune moment to re-examine the promise of Andrews.

The WCC judgments are deliberately written in the style of SCC rulings. This enables them to explore what is possible within the accepted structures of constitutional argument. It imposes a discipline to follow a rigorous legal analysis that serves several ends.

First, it ensures that the analysis is not abstract, but provides a practical response to real-world problems. Second, it ensures that the authors make the shift from advocacy to adjudication and respect the difficulties inherent in making judgments. Third, it requires the authors to engage with existing constitutional principles and clearly identify where, and articulate why, their analysis diverges from the existing jurisprudence.

The result is a collection of judgments that could have been written by the SCC at the time the original judgments were made. The WCC judgments present an alternate vision, but one that was and still is entirely within our grasp.

The WCC judgments have been used in numerous law school courses as a teaching tool to push law students to think creatively and critically about equality as a constitutional goal. Comparing and contrasting WCC and SCC judgments enables one to examine what choices have been made and whether those choices advance the project of substantive equality.

The WCC decisions raise questions about how evidence is treated, what dynamics are unquestioned or unexamined and how we think about constitutional remedies. They look not just at s. 15 but other Charter rights as well, including s. 7 and s. 35, and, under s. 1, raise questions about the place of equality in our democracy.

The WCC judgments also present litigators with the opportunity to critically analyze existing case law, identify and question the steps in a judgment's logic, and present new lines of legal argument.
Ultimately, the WCC aims to open up our constitutional dialogue into a broader conversation that truly hears the voices of those most in need of the Charter's promise to make equality rights real.

Fay Faraday is a Toronto lawyer who practises and writes in the areas of constitutional and human rights law. She is a member of the Women's Court of Canada and is currently rewriting the SCC's ruling in Andrews.

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Who will stay and who will go?

Sara Arnstein And Richard Lee — Fri, 13 Aug 2010 00:00:00 -0400

When it comes to hiring new associates, law firms typically follow a very structured process. Often this involves hiring a large pool of summer students, narrowing down that pool when selecting articling students and then further tightening the assessment criteria when identifying new associates. This tiered approach is designed to help firms identify the top performing students most likely to contribute to the firm's long-term productivity.

In practice, however, this isn't always the case. Students who perform well during summer internships and articling, may not contribute as much to the firm's financial growth as expected. It can be difficult to decide who will be a top performer in your law firm based solely on grades and preliminary interviews. There are many qualities that come into play including, having the ability to attract the right clients and provide a consistent level of customer service. Lawyers need to be able to achieve their billable hour targets as well as adapt to the firm's culture.

Why it's so hard to hire right
When you consider how rapidly the workplace is shifting, it's no surprise that firms can have difficulty hiring the right people up front. On the one hand, today's young lawyers continue to expect quicker advancement opportunities and greater mobility than ever before. On the other hand, as we know, Canada's average workforce population age is increasing.

Due to these trends, law firms increasingly need the ability to manage a multi-generational workforce. At the same time, they need strategies for identifying and retaining those lawyers best suited to lead the firm into the future. Unfortunately, some law firms lack formal systems for identifying emerging leaders. Current hiring practices rarely take into account the need to hire specific talent to fill expected turnover, support new service offerings or meet fluctuating demand within each practice group.

In an effort to overcome some of these process gaps, law firms have adopted a range of strategies. Many firms try to improve their associates' chances for success through formal mentoring, training and development programs. They aim to retain high-performing talent through compensation and rewards, job flexibility and other perks.

Each of these approaches form a critical pillar in a law firm's talent management arsenal. Alone this is not enough. To manage growth, maintain profitability and mitigate the risks of ongoing volatility, law firms should also adopt more sophisticated approaches for predicting their current and future talent requirements. Here are four methods to consider:

1. Workforce analytics
Workforce analytics use human resources data to help firms make informed decisions around hiring, promotion and pay. Use metrics such as performance reviews, salary levels, billable hours, revenue by practice group and even the average age of practitioners to assess the effectiveness of your firm's hiring strategies and compensation programs. The data may offer answers to critical questions such as the average level of your turnover over the past few years, the best hiring sources and the highest-performing departments. Armed with this knowledge, you can begin to optimize your hiring strategies to attract specific people who possess the characteristics that traditionally contribute to your firm's success.

Before workforce analytics can pay dividends, you need to ensure the quality of your firm's data. Using incomplete, inaccurate or out-of-date data will hamper your abilities to clearly understand the factors that contribute to your workforce strengths and weaknesses.

2. Resource forecasting
Resource forecasting allows you to predict the future levels of demand forand supply oftalent within each of your practice groups, at a local, national or even global level. By analyzing current workforce and economic trends, as well as organizational factors, you can often determine what skills your firm will need in the future. You can also assess if you have the internal resources to fill those needs, or if you will need to attract new external hires. By gaining a firm understanding of the number of people you will need in various practices, you will be better placed to allocate the right number of lawyers to each practice group.

3. Skill-based forecasting
An even more advanced approach to talent planning is the adoption of skill-based forecasting for key talent segments. With skill-based forecasting your law firm can start to identify those lawyers who possess the required skills to support the firm's long-term strategy. By identifying people with the right skills, you can further foster their leadership development by assigning them to critical roles or placing them in a variety of cross-functional roles. In addition to plugging talent gaps, this can help maximize the firm's growth and profitability over time.

4. Predictive modeling
A particularly sophisticated approach to talent planning involves statistically analyzing a firm's data to determine the likelihood of, and reasons for, future events such as attrition. Using predictive analytics and retention modeling, firms can often identify those lawyers who are most at risk of leaving and which practice groups or geographic areas may be most subject to these talent shortages. By creating a profile of associates and partners most likely to stay or go, your firm can begin to predict potential vacancies and leadership gaps and take steps to mitigate these risks in advance. Ultimately, understanding the causes of turnover allows you to reduce attrition, along with the financial and productivity costs associated with it.

The power of foresight
Although workforce analytics, forecasting and predictive modeling do not offer a 20/20 view into the future, they can provide law firms with a glimpse of the factors that may affect talent planning over time. This insight can position your firm to do more than determine the optimal composition of its future workforce needs. It can also enhance your decision-making when it comes to your most important asset: your people.

Sara Arnstein is a manager and Richard Lee is a partner in Deloitte's Human Capital practice, based in Toronto. Deloitte's Human Capital practice helps organizations develop and implement effective talent management strategies.

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Refreshing a firm through branding

Christopher Guly — Fri, 13 Aug 2010 00:00:00 -0400

Tracing its roots back to the 19th century, Winnipeg full-service law firm Fillmore Riley LLP is charting a new course for the 21st century.

The firm, which has about 60 lawyers working in over 20 practice areas from aboriginal law to wills and estates recently unveiled a refreshed look after undergoing an extensive eight-month rebranding exercise.

There's a new wordmark (see bottom left of page), with the words Fillmore (in black) Riley (green) joined together with a subtle and tiny white arrow pointing to the right. There's a dynamic website (www.fillmoreriley.com), which is optimized for smartphones, such as the BlackBerry and the iPhone, and features scrolling front-page slogans (On your case, Legal ease and Bench strength). Ads promoting the firm now carry taglines like direct and decisive.

For a regional full-service law firm to remain relevant, it needs to differentiate itself from other firms and communicate what makes it unique, explains Glen Peters, managing partner of Fillmore Riley.

We felt the best way in our situation was to go to those who were using our services and our own people, and get their feedback. The message that came through loud and clear was that we take a pragmatic, straightforward approach to a file, and that makes us unique.

That information also gave Fillmore Riley's lawyers a greater comfort level, adds Peters, who practises mainly in the areas of corporate and commercial law.

We heard from clients the reasons why we are being retained and why they think we're the right firm for them, which confirmed our own impressions of the firm.

We think of ourselves as not over-lawyering and over-papering files, and getting down to business. Having that approach reinforced by our clients assisted us a lot in putting out to the market who we are and what we do.

Unlike creating a brand campaign for a consumer product, such as a soft drink, branding an organization is all about the people and the collective the human dynamic is paramount, explains Derrick Coupland, principal of Winnipeg-based brand strategy and market research consulting firm, Blacksheep Strategy Inc., which led Fillmore Riley's brand refresh initiative its most comprehensive identity effort for a law firm to date.

Coupland describes the exercise as one not unlike an organization identifying its vision and mission. For Fillmore Riley, the brand strategy had to be consistent with who they are, what they're trying to do in the marketplace and what they stand for, understanding the requirements and preferences of their defined core client base and ensuring that delivery of legal services is consistent with those expectations.

As part of the branding initiative, Blacksheep conducted a series of interviews with about a dozen of the law firm's key clients from across different practice groups to identify why they chose Fillmore Riley as well as the firm's more than 130 lawyers, paralegals and support staff to get their take, in part, on how Fillmore Riley provides value in its legal services and why the firm acquires and retains clients. The results of that research were then shared at two workshops with members of Fillmore Riley's internal marketing committee.

Further long discussions with Blacksheep followed, where no branding-related stone was unturned.

It involved such things as deciding on how to write out 'Fillmore Riley' and the colour scheme used, and went down to the letterhead and where to position the firm's name and the size and type of font used. My file on that project is about a foot thick, explains Stuart Blake, a partner of Fillmore Riley, who practises primarily in the areas of civil litigation and insurance law.

There was even a discussion about shortening the firm's name. But Blacksheep thought that the cadence of 'Fillmore Riley' sounds good, so that was one of the reasons why we stuck with the name.

But changes were made.

For example, whenever someone receives correspondence from a Fillmore Riley lawyer, it now includes contact information for both counsel and that lawyer's legal assistant. The firm's website also remains current, and features concise biographical information pages on each of its lawyers, which are often accompanied by a quote from the lawyer that serves as his or her mission statement, as well as key cases and transactions with which the lawyer is involved.

The exhaustive rebranding exercise also resulted in a new focus for the firm founded in 1883 with the name, Richards & amp; Coutlee (it's been called Fillmore Riley since 1997), says Blake.

We have a solid core of lawyers in their mid-thirties to mid-forties, and we're strongly of the view that they are the best lawyers in that age bracket anywhere in town, he says. So we decided that we wanted to convey a more dynamic, progressive image of the firm.

You have to stay current and look at ways of separating yourself from the competition. For instance, we have the largest insurance law group in Winnipeg and it's recognized as the number one insurance law department in the city. But we have to convey that message in a subtle and simple way to clients, says Blake of the firm.

As Peters explains: You have to create a consistent visual identity that communicates to people as much as you can about who you are. But we don't think anybody likes the it's-all-about-me approach. We think any visual communications from a law firm should stress how clients will benefit when they choose your firm, and not based on why you're so wonderful, says Peters, who points out that Fillmore Riley's achievements such as eight of its partners (including Blake) recognized earlier this year on the Best Lawyers in Canada 2010 list and more recently, commercial litigator David Kroft, being named a Life Bencher by the Law Society of Manitoba are listed as news on the FillmoreRiley.com website.

Also mentioned there in the Our Story section is the distinction of Fillmore Riley being the first law firm in North America to be awarded ISO 9001 certification more than a decade ago and which has required the firm to regularly conduct client feedback surveys independent of its recent rebranding initiative. As well, Fillmore Riley's philanthropic activity is highlighted on its website with a brief section on the firm's community involvement.

Presenting such information on the firm and its lawyers is an important part of any branding initiative, explains Coupland.
Much of the heavy lifting and service delivery is carried out by individual lawyers and support staff, and that's where the relationship equity lies but not 100 per cent of it, he says.

When we talk to clients of a law firm, they tell us the relationship is based on the expertise and experience of one or more lawyers. But the overall reputation of a firm also influences the decision to go and stay with a given firm. So the brand is the result of the reputation of both the firm and its lawyers a combination which is quite common in other professional service firms, such as those involving architects or accountants.

An understanding of the dynamics of how a firm is perceived can be leveraged to enhance the firm's position in an increasingly competitive marketplace, explains Coupland.

For instance, take two law firms. One says it won't worry about branding and will just focus on its lawyers, whereas the other one will do both. It's almost certain that the second firm has the competitive advantage by deliberately managing its overall reputation while delivering excellent service and value to its clients.

He says law firms that place importance on their brand will also be pioneers, since branding in the North American legal landscape compared to other professional sectors is still relatively rare.

The majority of law firms appear to not have undergone broad-based strategic branding programs, so that creates an opportunity for early adopters to make more substantial gains.

Quick rebranding tips from the pros

It's important to first obtain feedback on why clients choose your firm, and incorporate that information into your branding strategy, according to Fillmore Riley LLP Partner Stuart Blake.

Know your strengths and weaknesses, and ensure the brand that you communicate is about what makes you unique, says Glen Peters, managing partner of Fillmore Riley.Get internal buy-in and recognize that each person in your office is the firm's ambassador for the brand, says Peters.

Once a firm launches its own brand, it has to stick with it or risk losing any gains made, adds Blacksheep Strategy's Derrick Coupland. The firm has to manage its brand as an ongoing process, and not as an event.

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Top court upholds novel Charter remedy for lawyer's strip search

Arnold Ceballos — Fri, 06 Aug 2010 00:00:00 -0400

The Supreme Court of Canada has ruled that financial damages can be awarded for breaches of Charter rights, though it has left it open for future courts to establish limits on this new constitutional remedy.

In a unanimous ruling, the high court upheld a trial decision that awarded Vancouver lawyer Alan Cameron Ward $5,000 for a strip search that violated his s. 8 Charter right to be free from unreasonable search and seizure.

Ward had been detained on August 1, 2002 when Vancouver police mistakenly thought that he was an individual whom they had been tipped off planned to throw a pie at then Prime Minister Jean Chrétien during a public ceremony. Ward was detained and partially strip searched, while his car was also impounded, though not searched. He was ultimately released after the ceremony.

At trial, the judge found that, although the police did not act in bad faith and were not liable in tort, the province's strip search and the city's vehicle seizure nonetheless violated Ward's s. 8 rights. Ward was awarded $5,000 for the strip search and $100 for the car seizure. He was also awarded $5,000 in damages for the wrongful imprisonment, but this award was not an issue in the appeal before the Supreme Court.

Writing for the Supreme Court of Canada, Chief Justice Beverley McLachlin held that damages may be awarded for a Charter breach under s. 24(1) where appropriate and just.

The nature of the remedy is to require the state (or society writ large) to compensate an individual for breaches of the individual's constitutional rights, wrote McLachlin. An action for public law damages including constitutional damages lies against the state and not against individual actors. Actions against individual actors should be pursued in accordance with existing causes of action. The court, however, emphasized that such damages should not duplicate damages awarded under private law causes of action.

In establishing the new remedy, the court set out a four part test, which first requires establishing that a Charter right has been breached. The second step is to show why damages are a just and appropriate remedy, taking into consideration whether they would fulfill one or more of the functions of compensation, vindication of a right, and/or deterrence of future breaches. At the third step, the state can try to demonstrate, if it can, that there are countervailing factors that would render damages inappropriate and unjust. The final step is to assess the quantum of damages.

Recognizing that such damages are a new endeavour, the court cautioned that a determination as to when they are appropriate should develop incrementally. The court also left open for future judicial development a number of factors relevant to the issue of awarding constitutional damages, particularly where to place limits on the remedy.

The court noted, for example, that a complete catalogue of countervailing considerations remains to be developed as the law in this area matures, though it added that at least two factors may be considered: the existence of alternative remedies and concerns for good governance. For the latter, the court suggested that the state may succeed in resisting an award of damages unless the state conduct meets a minimum threshold of gravity.

It may be that in the future other situations may be recognized where the appropriateness of s. 24(1) damages could be negated on the grounds of effective governance, wrote McLachlin. Such concerns may find expression, as the law in this area matures, in various defences to s. 24(1) claims.

Applying the new test to the facts, the court found that Ward's Charter rights were violated and he was entitled to a damage award. Strip searches are inherently humiliating and thus constitute a significant injury to an individual's intangible interests, noted McLachlin. She added, however, that the particular search was brief and not extremely disrespectful, which suggested a moderate damages award. The court upheld the $5,000 award as being appropriate.

For the car seizure, the court found that Ward did not suffer any injury and, as a result, set aside the $100 damages award. Instead, the court substituted a declaration that the vehicle seizure violated Ward's right to be free from unreasonable search and seizure under s. 8 of the Charter.

The decision was important because there was conflicting Court of Appeal authority across the country, according to Vancouver lawyer Brian Samuels, who represented Ward. It puts some teeth in the Charter remedies clause, added Samuels, who asserted that the remedy of only a declaration is a pretty hollow remedy. However, given the amount awarded in this case, Samuels noted that it could still make it unfeasible for most people whose rights were violated to pursue a claim. Nonetheless, he added that it opens the door for legitimate claims being pursued, including class actions.

In a written statement, the Vancouver Police Department (VPD) said that it was pleased that the ruling upheld the trial judge's findings that the police officers acted in good faith when they arrested Ward, and that no compensation should be awarded for the temporary impounding of his car.

We cannot speak to the award Mr. Ward received for being strip-searched at the jail, since at the time the jail was under the jurisdiction of the Province, said the statement. We can say that since control of the jail has reverted to the VPD, that we have a clearly defined policy around strip-searches. They are now only conducted in the jail when there are reasonable grounds to justify it.

British Columbia Attorney General Michael de Jong had not commented publicly on the decision as of press time.

Reasons: Vancouver (City) v. Ward, [2010] S.C.J. No. 27.

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Copyright bill disturbs rights balance between creators and users

Jenna Wilson And Sangeetha Punniyamoorthy — Fri, 06 Aug 2010 00:00:00 -0400

After two failed attempts at legislative change in 2006 and 2008, Parliament has once again introduced new copyright amendments in Bill C-32 in an attempt to modernize the Copyright Act but third time lucky probably doesn't apply.

As one example, the controversial and sharply criticized digital lock provisions in Bill C-32 seem to disturb the balancing act between the needs of rewarding creators and promoting the public interest through the encouragement and dissemination of intellectual and artistic works, identified by the Supreme Court of Canada as the role of copyright law.

Digital locks, or as they are referred to in the bill, technical protection measures (TPMs), are used to provide greater control over access to and dissemination of digital content. Advocates of TPMs claim they are effective in limiting unauthorized copying, performance, distribution and display of copyrighted works. Therefore, previous attempts at copyright reform included provisions prohibiting circumvention of TPMs with varying degrees of severity.

In 2006, Bill C-60 included legal protection for TPMs to control digital content; however, Parliament avoided the harsh approach taken by the U.S. Digital Millennium Copyright Act provisions, which provide the copyright owner with a cause of action against anyone who circumvents any sort of technological control, even without infringement of copyright. Unlike the American approach, the intention of Bill C-60 was to link anti-circumvention to actual copyright infringement: the Canadian government pledged in 2005 that circumvention of a TPM applied to copyrighted material would only be illegal if carried out with the objective of infringing copyright.

The next attempt, Bill C-61, had further-reaching provisions. The proposed 2008 amendments would have made it an infringement to circumvent TPMs that in their ordinary course controlled access to a copyrighted work, or to offer services or provide technology to circumvent these measures. Exceptions were provided for creating interoperable computer software, encryption research, verifying the collection of personal information, assessing the vulnerability of computer systems and making a work available to a person with a perceptual disability.

Bill C-32 reprises Bill C-61's digital lock provisions, again making the circumvention of TPMs illegal under s. 41.1(1)(a), subject to similar exceptions. There have been mixed reactions. Several content-producing stakeholders, including the Canadian Recording Industry Association, the Entertainment Software Association of Canada and the Canadian Independent Music Association, have applauded the introduction of the new bill.

Others have sharply criticized the TPM provisions because of their incursion into private, educational and non-commercial activities: the Business Coalition for Balanced Copyright called for revision of the provisions, noting that some parts of the proposed legislation unfairly restrict consumer freedom, while the Canadian Bookseller Association has asked the government to go even further in the area of access, by allowing the public particularly students and educators to circumvent digital locks on material sought for educational and strictly non-commercial purposes. The Canadian Library Association expressed disappointment that longstanding rights, the heart of copyright's balance, as well as the new rights, are all tempered by the over-reach of digital locks.

Will the anti-circumvention provisions in Bill C-61 maintain the current copyright balance between users and creators? On their face, the provisions provide copyright owners with even more protection for their works, permitting them to exclude users from engaging in activities that otherwise might have been fair dealing. Some activities that are currently exempted from copyright infringement under the fair dealing provisions of the Copyright Actsuch as copying a fair amount of a work for the purpose of research or private studymay automatically trigger liability under Bill C-32 if the activity involves circumvention of a digital lock. Circumvention may be something as simple as removing a password from an electronic document to facilitate copying of part of its content.

Bill C-32 attempts to balance the anti-circumvention provisions by providing the government with regulation-making power to make exceptions under s. 41.1(1)(a) for fair dealing purposesexceptions which, at this stage, do not existand by removing some of the rights holder's teeth by precluding rights holders from claiming statutory damages when a TPM is circumvented by an individual for private purposes. This latter attempt at balance is presumably intended to discourage rights holders from suing for simple circumvention of digital locks when the actual damages are negligible.

However, the fact remains that the anti-circumvention provisions, as they stand, create new, automatic liability for users who otherwise would have been engaging in fair dealing activities. Painting users of copyrighted works with the infringement brush in this mannerwhether actual copyright infringement occurred or notarguably shifts the balance between creators and users, at least in perception, if not reality.

Anti-circumvention provisions could be implemented in the Copyright Act without significantly disturbing the balance between users and creators in the way Bill C-32 does. Even if Bill C-32 makes it through Parliament, many of its proposed amendments are highly unlikely to survive in their current version.

Sangeetha Punniyamoorthy and Jenna Wilson practise intellectual property law and litigation at Dimock Stratton LLP in Toronto.

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Retirees and pension reform

Karen Shaver — Fri, 06 Aug 2010 00:00:00 -0400

Historically, employees who retired with an employer-sponsored defined benefit pension could expect to be somewhat insulated from their employers' future economic issues. But that changed with the extraordinary economic conditions that recently threatened even pension plans that the Ontario government had agreed were too big to fail.

Federal and provincial governments throughout Canada accelerated pension reform initiatives and retirees organized in order to participate in pension reform consultations. Reports from expert commissions have been released and governments are rolling out the first phase of pension reform. But are retirees likely to be satisfied with changes?

After four years of consultation and analysis, the Ontario government has passed the Pension Plan Amendment Act, 2010 (Bill 236) which amends the Ontario Pension Benefits Act (PBA) and is the first phase of the most significant pension reform in 20 years. Bill 236 received royal assent on May 18. Many substantive changes become effective on a date to be proclaimed by the Lieutenant Governor, and some amendments are subject to regulations containing prescribed details, yet to be released.

Subject to these prescribed details, what did retirees achieve under Bill 236 and what do they still want? Have pensioners become activists as a result of their participation in pension reform process, and are plan administrators now obliged to consult with and balance pensioners' views in areas of plan governance and administration?

Retiree involvement in consultations

Bill 236 proposes amendments to the PBA based on recommendations of the Ontario Expert Commission on Pensions following extensive consultations with stakeholders, including pensioner groups. Retirees also participated in consultations conducted by the Standing Committee on Finance and Economic Affairs before Bill 236 received royal assent. Retirees made more than 25 submissions about their issues and concerns related to pension reform, some of which are discussed below.

Recognition of retirees

Retirees resent being described in the PBA and their own plan documents as former members. Bill 236 amends the PBA to define retired members separately from former members, with separate rights and entitlement to disclosure of certain plan-related information. Some groups perceive this renaming as less than adequate in delivering the real changes that pensioners are seeking in being involved in the administration of their pension plans.

Advance notice of plan amendments

Retirees do not have effective access to plan information. Bill 236 amends the PBA to require that plan administrators provide retirees with increased disclosure about plan operations and funding and with advance notice of all amendments to the pension plan, unless exempted under the regulations. Timing and substance of the required information will be described by the regulations.

Participation in pension advisory committees

Retirees generally have no right to participate in plan governance decisions, even those that might adversely affect their pensions. Former union members, as retirees, have no voice in pension plan affairs, and, in most unions, no role in union decision-making.

Bill 236 amends the PBA to permit active and retired employees to establish a pension advisory committee (PAC) with a mandate to monitor and make recommendations about pension plan administration. Regulations will include details about the mandate, establishment and operation of a PAC.

Once advised of the intent to establish a PAC, the plan administrator is required to support its establishment and operations. Some pensioner groups are concerned that retirees will have little real authority under a PAC. Further, it doesn't appear that retirees will be represented proportionately on a PAC. This could set up priority contests between active and retired employees and adversely impact the effectiveness of the PAC.

Future retiree involvement

While Bill 236 addresses some obvious limitations in the PBA for retirees, subject to the regulation to be released, a number of retiree concerns have not been addressed. And while Bill 236 attempts to balance priorities between broad groups of stakeholders, including retirees, pensioner group submissions clearly indicate that retirees do not speak with one voice. It will be a challenge to develop pension policy that is broad enough to shape future pension reform that incorporates the variety of issues.

As a result, the next step will likely see plan administrators and retirees negotiating and adjusting to settle their new roles and responsibilities under phase one reforms. Depending on the perceived state of the pension plan, some pensioner groups may not wait for the next round of pension reform and will continue to lobby to increase their current level of involvement in plan governance.

The question remains as to whether pension reform can continue to consider retired employees as a single interest group, given the diverse existing and future interests of retiree stakeholders within the various pensioner groups.

Karen Shaver is a partner in the Pensions and Employee Compensation Group of McMillan LLP in Toronto. Her clients include employer plan sponsors, boards of trustees, private equity investors, creditors and borrowers and trustees in bankruptcy.

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Team building

Luis Millan — Fri, 06 Aug 2010 00:00:00 -0400

Nicole Garton-Jones learned the hard way about the virtues of team-building. After successfully enticing women seeking the elusive balance between work and life to work at the innovative virtual estates and family law firm she founded five years ago, the 37-year old Vancouver lawyer inadvertently committed a faux pas commonly made in Canadian legal circles.

Learning about management on the go, Garton-Jones concentrated her efforts on overseeing a nascent law firm growing serendipitously and omitted to pay enough attention to fostering the growth of a strong team. The firm she founded paid the price.

In the past when I didn't have management systems in place and wasn't regularly touching base with people, we grew apart, admitted Garton-Jones, the managing partner of Heritage Law, a paperless law firm that by and large operates remotely, with staff and fellow lawyers communicating mostly by phone and e-mail. I noticed that trust and confidence eroded. Building a team and maintaining a culture given the fact that we're all over the place, I will tell you, is a challenge.

It's proving to be just as daunting for traditional law firms. A solid business case can be and has been made on the merits of building a well coordinated set of team players. Cohesive teams provide a competitive advantage, assert legal consultants, as it engenders better decision-making, fosters more productivity, creates a healthier work environment and improves staff retention.

Yet it appears that many law firms who buy into the principles of team building, going so far as to adopt strategies as well as approve statements of values and missions, fail miserably in spite of their best intentions. The same attributes and traits that help lawyers to excel in their profession are the ones that generally make lawyers poor team players.

The training and disposition of lawyers creates challenges around team work, points out Karen MacKay, the president of Toronto-based consultancy firm Phoenix Legal Inc. By and large, lawyers are highly autonomous, very independent, sceptical, and compared to the population at large more introverted.

The partnership arrangement that governs the legal world and its well-entrenched formula-based compensation system pose barriers that are just as formidable. Much current practice in firm governance, organization and compensation provide fodder for office politics, sources of conflict, discord between senior and junior lawyers, and dawdling decision-making, adds Linda Robertson, the head of Advocacy Legal Consultants in Vancouver. In short, many law firms have such low-trust environments that it makes collaboration a redoubtable challenge.

Partnerships are very odd constructs, notes Robertson, a former corporate counsel who often works with litigation teams preparing for lengthy trials. Professional partnerships are very awkward to manage because typically the managing partner has limited authority. He may be considered to be the first among equals but it is very difficult for him to tell his partners how to run his practice. In this environment collaboration is seen as a threat because it's viewed as a compromise, and when partners don't agree it can be very disruptive.

It may be challenging but it is certainly not impossible to cultivate team work in law firms. The key is to address several common dysfunctions, according to both MacKay and Robertson, whose views have been shaped by Patrick Lencioni, a well-known management consultant who penned the book Five Dysfunctions of a Team. Absence of trust, fear of conflict, lack of commitment, avoidance of accountability, and inattention to results are the obstacles that have to be overcome to build an effective and collaborative organization, says Lencioni in his popular book.

With the assistance of Robertson, Garton-Jones has been able to overcome the hurdles and lay the groundwork for building a solid team and a healthy corporate culture. The first thing that Garton-Jones did was to polish up her management skills by soaking up as much as she could through reading, followed up by participating in a business mentorship program and then ultimately relying on Robertson's guidance. Then she thought long and hard about the kind of person who would be successful at Heritage Law before putting pen to paper her minimum basic expectations for each lawyer working at the flourishing law firm.

I don't think it's impossible to build a strong team, said Garton-Jones, whose guidelines are built around client service, productivity, professional development and business development, all of which is anchored by constant communication. You've got to get the right people on the bus and then establish the minimum expectations and goals. You then encourage them and follow-up on a regular basis. In other words, you give them all the tools to be successful. I'm also much more proactive. I set aside 30 minutes per lawyer every week to touch base and see how they're doing, and what their concerns are.

Garton-Jones also schedules a warm, fuzzy lunch, once a month plus dinners several times a year as well as an annual retreat. It's made a huge difference, said Garton-Jones.

Other law firms are taking a step further, and thinking beyond the box. The Vancouver office at Borden Ladner Gervais LLP (BLG) has recently decided to use its human resources department to bolster teamwork at the law firm. In the near future, HR personnel will be meeting regularly with practice leaders to assess a variety of group issues in a more formalized way than has been the case in the past, said Deborah Overholt, the regional managing partner of BLG's Vancouver office. Also in the works are plans for HR to participate in practice group and client team meetings.

It's a question of employee satisfaction, said Overholt, who practises in the areas of environmental law, energy-related transactions and general commercial transactions. Our view is that employees who feel fully engaged and part of the team are likely to be more productive, more happy with their workplace and just generally more connected. We'll see over time if the HR staff are going to be perceived as outsiders who shouldn't be taking such an active role in practice group and client meetings.

Law firms, particularly the big ones, may have no choice but to change their ways, points out Robertson. And many have already done so by embracing corporate management techniques that promote strong effective teams.

The big national firms don't have much of a choice because you can't run a business organization without some solid business principles, said Robertson. For the smaller ones, if you haven't worked out how to work as a team and support each other, the firm is probably not going to last.

Overcoming the five dysfunctions of a team

The key to building a strong team is to overcome common dysfunctions that plague not just law firms but organizations at large, according to legal consultants Karen MacKay and Linda Robertson, whose views have been shaped by Patrick Lencioni, a well-known management consultant who penned the book Five Dysfunctions of a Team.

The best-run partnerships are the ones that have an understanding of team dynamics, said Robertson.

Absence of trust, fear of conflict, lack of commitment, avoidance of accountability, and inattention to results are obstacles that have to be tackled to build a collaborative organization, says Lencioni in his popular management book.

Trust lies at the heart of a functioning, cohesive team, writes Lencioni in his book, a view that both MacKay and Robertson embrace. But many law firms, say legal consultants, are cursed by low trust environments. A typical example is the case where a senior partner refuses to have an associate involved in a client relationship for fear of losing the client to the junior, notes MacKay.

One strategy to overcome the absence of trust is to identify and discuss individual strengths and weaknesses, skill deficiencies, interpersonal shortcomings, and spend considerable time in face-to-face meetings and working sessions. That's a huge piece in building a team, said Robertson. You have to build that trust by talking about it and not avoid issues that everyone knows are there but no one is talking about.

Tied in with the absence of trust is the fear of conflict. Lawyers, points out MacKay, have a tendency to sweep conflicts under the rug and eventually they trip over it. That can be addressed by acknowledging that conflict is necessary and establish ground rules for engaging in conflict.

Lack of commitment takes place when firms don't have a clear strategy. If you don't know where you're going, you can't commit people to it so you have situations where you have highly independent people basically ending up sharing space, notes MacKay. That's why it's important to review commitments at the end of each meeting and ensure that all team members have bought into it.

Once everybody has a clear sense of what is expected, everyone must be held accountable for their behaviours and actions. That has to be followed by keeping the group focused on tangible group goals and rewarding those behaviours and actions that contribute to those results, otherwise there is a risk that people will pay little attention to results. That's why the compensation system may have to be reviewed, adds MacKay. You need to figure out what the key indicators are that help you to measure what you are accomplishing, said MacKay. A key marker may be billings of a particular client. If the percentage of billings of a partner is very high, that may mean that the partner is not pushing work down and instead hoarding it. Which itself implies that the partner is not training and developing people, and not building a team.
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Associate compensation meets the merit system

Jordan Furlong — Fri, 06 Aug 2010 00:00:00 -0400

If you set out to determine why many business practices exist in modern law firms, you'd get an alarming number of answers that amount to, Because we've always done it this way. The hourly billing system is Exhibit A of this tendency, but perhaps just as pernicious is our long-standing system of paying associate lawyers.

In most cases, associate compensation is determined by salary (usually based on year of call) and bonuses (based partly on billable totals but also on how well the firm performed overall). You might notice that neither of these factors has much to do with the associate's own contribution of value to the firm or its clients. In its reliance on worker seniority and organizational success, it's far more reminiscent of the assembly line at a unionized auto plant.

Any real scrutiny of this approach reveals its numerous flaws, but that kind of scrutiny is what law firms have successfully avoided for many years until now. Thanks to the impact of the recession, numerous U.S. and U.K. firms have finally taken a close look at their associate compensation systems and decided they're too arbitrary and irrational to continue any longer.

Here's a list of some of the well-known firms that, just in the past year, have formally announced they're modifying or abandoning the traditional lockstep method of paying associates: Clifford Chance LLP, DLA Piper LLP, Hogan Lovells LLP, Reed Smith LLP, Wilmer Cutler Pickering Hale and Dorr LLP, Olswang LLP, Bingham McCutchen LLP and Sonnenschein, Nath & amp; Rosenthal LLP (now transatlantic firm SNR Denton LLP). These are some of the biggest and most profitable law firms in the world.

These and other firms have turned to merit-based systems, the novel (for lawyers) idea that how much you make should be determined by how good you are at your job. Since many firms still choose to believe that a lawyer's quality is directly linked to his or her dockets, some firms will instead compensate directly by hours billed something that should strike mortal fear in the hearts of their clients.

There is a better way: institute a competency model for lawyers and use it to assess their mastery of the skills that matter and their consequent compensation. Larry Richard of Hildebrandt describes it well: A competency model is a framework that identifies all the competencies that an associate needs to have mastered at each level along the climb to partnership and defines each of those levels in a sufficiently clear manner for the associate to understand the attitudes or behaviours expected of them.

Orrick Herrington & amp; Sutcliffe LLP, for example, threw out its lockstep system last summer and instituted three levels of associateship for partner-track lawyers, with advancement dependent on meeting certain skills and accomplishments criteria (Orrick created a non-partner track as well). Litigation and IP firm Howrey LLP did the same back in 2007, rewarding lawyers for writing, discovery, trial practice and client presentation skills and instituting extensive training programs to hone those skills.

Seyfarth Shaw LLP has gone the furthest of all: its associates are sorted into nine different salary levels based on their proficiency in 11 core competencies such as client service, legal research, and analysis. Advancement is impossible without demonstrated mastery of the next level's skill set. What's more, associates' billing rates are aligned directly with their competency levels, so that no lawyer can bill clients more than he or she is worth.

There are some critics of merit-based compensation and, it should be noted, some supporters on partnership committees who see this trend simply as an excuse to reduce associate salaries, which in many jurisdictions had spun completely out of control. But the firms that have instituted these systems insist that while yes, cost containment was a factor, what they're really driving towards is the ability to measure a lawyer's actual value to the firm, which lockstep cannot do.

Firms that have adopted merit-based compensation systems have learned the challenges of making them work. Associates paid on merit must be rigorously trained in those skills, which requires not only that a firm seriously assess what makes a lawyer valuable and productive, but also that its partners dedicate real, otherwise-billable time for training, evaluation and feedback. Many potential merit-based systems die on the vine right there.

There are several other obstacles to be overcome in terms of law firm structure, finance and culture, but the important thing is that many established firms are trying to adopt a sensible, measurable approach to assessing their lawyers' real value and paying them accordingly. I've not yet seen Canadian firms follow suit, but I have no doubt that those that do will be rewarded with a salary system they can actually defend on rational grounds.

Jordan Furlong is a partner with Edge International who specializes in analyzing the extraordinary changes now underway in the legal profession worldwide. He is also a senior consultant with Stem Legal and head of its media strategy service. He authors the award-winning blog Law21: Dispatches from a Legal Profession on the Brink, http://law21.ca.

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Special advocates predict no more security certificates

Cristin Schmitz — Fri, 16 Jul 2010 00:00:00 -0400

Are immigration security certificates dead?

Following a spate of court defeats since last fall, the government has been quietly re-examining whether security certificates are still viable in terrorism-related cases which raise the prospect of indefinitely detaining the named person, or deporting them back to countries where they may be tortured.

Special advocates and other experts on national security law told The Lawyers Weekly the Harper government may be poised to abandon security certificates in favour of an administrative model for ejecting permanent residents and foreign nationals it deems to be a danger to Canada.

The feeling I get, and nothing has been said to me [by officials],is that the government has found the security certificate cases too complicated, too long, and expensive, and will attempt to achieve whatever objective they have concerning permanent residents or foreign nationals by some other procedure which could be before the immigration division of the Immigration and Refugee Board, or some other kind of administrative body or person, says Paul Cavalluzzo of Toronto's Cavalluzzo Hayes.

Paul Copeland of Toronto's Copeland Duncan notes the general opinion among all of the special advocates who have worked on the [five al-Qaeda-related security certificate] cases is that [the government] won't do another.

However Cavalluzzo, who with Copeland is special advocate (SA) for security certificate detainee Mohamed Harkat, says he doubts that the government can come up with an acceptable, in camera administrative procedure for handling immigration cases that involve national security claims and secret evidence, particularly if the cases are to be presided over by a non-lawyer decision-maker.

I think its constitutionality would be in serious question if you take it out of court, because there are many serious and constitutional questions that arise during the course of one of these proceedings, Cavalluzzo says.

Last September, then-Public Safety Minister Peter Van Loan said he feared for Canada's ability to fight terrorism given the increasingly complex legal environment in which the Federal Court is steadily holding the government's feet to the constitutional fire.

He promised that the government's internal review of security certificates will determine what we would do in the future and whether that is an appropriate instrument.

But in the intervening 10 months the government has disclosed nothing publicly, although some security law experts were consulted. I was interviewed for some sort of review, acknowledges University of Ottawa law professor Craig Forcese. I don't know what came of it.

Forcese agrees it's unlikely that security certificates will be issued in future terror-related cases. We may still see them on other cases where there is no [deportation to] torture issue, such as espionage, organized crime, he predicts.

David Charbonneau, spokesperson for Vic Toews, the present public safety minister, declined to set up an interview with his boss. Charbonneau also declined to disclose when the security certificate review will be completed or what is under consideration.

The objective of this government is to keep Canadians safe from security threats, in this case non-citizens, Charbonneau told The Lawyers Weekly. Our review is focused on the challenge of how to protect Canadians' security while recognizing the obstacles emerging under the existing security certificate regime. The results will be made public once the review requested by the minister has been completed.

Forcese said there are signs the government is turning to bringing national-security-related cases under s. 86 of the Immigration and Refugee Protection Act. In such cases the government contends in front of an immigration adjudicator that a person is inadmissible to Canada on national security grounds. Because the government relies on sensitive secret evidence, SAs must be appointed by the court.

Toronto immigration lawyer Lorne Waldman, who is an SA in a s. 86 case, and is also public counsel for a security certificate detainee, sees no significant difference between the two processes.

All the shortcomings of the security certificates are the same problems that exist in the s. 86 process, Waldman says.

Like the other special advocates who spoke to The Lawyers Weekly, Waldman says he accepts that the government must at times keep information secret on national security grounds in immigration cases.

But in those cases we have to ensure that the fullest possible disclosure is made [to the person affected], while protecting national security, and ensure that the person who represents the interests of the [affected] person at the closed hearing is as fully armed as possible, he advises.

The constitutional crux of the matter is giving the person affected enough disclosure of the government's case to defend himself, Waldman says.

He argues the government's best chance of Charter-proofing its anti-terror immigration measures is to adopt the approach successfully used for many years by the Security Intelligence Review Committee (SIRC), which reviews denials of security clearances by the Canadian Security Intelligence Service (CSIS). Security-cleared SIRC lawyers who are sworn not to disclose privileged information to the person who has been denied a security clearance are otherwise permitted to communicate freely with that person in order to be able to adequately represent the person's interests at the closed-door hearing where the government's secret evidence is tendered. By contrast SAs are permitted, at most, court-authorized and courtsupervised, restricted communication with the security certificate detainee's legal team. It's not enough, experienced SAs say.

I think the special advocate model has very serious limitations because of the bars on communication that make the work of the SA very challenging, Waldman says. I can certainly envision situations where, even with the SAs present, there may well be cases where the process would not be fair.

Ottawa's Leonard Shore, an SA with years of experience in national security-related matters, says he believes the security certificate regime revamped in 2008 remains unconstitutional because it ties the hands of SAs.

I think the future is in doubt, Shore says. But I don't know whether this government has the knowledge or information to know what to do next.

Security certificates were originally envisioned as a speedy and streamlined way to get dangerous foreigners out of the country, but they have turned out to be anything but, Shore said. The Supreme Court said you can't do it that way. You have got to give them due process.

Judges' constitutional vigilance has caused the Harper government to criticize the courts for dragging out matters in security certificate cases. But SAs say the government has to shoulder much of the blame.

First of all they over-claim their national security [privilege], which raises all kinds of challenges by the SAs, notes Cavalluzzo. We're constantly battling them on that,which prolongs the event.

Secondly the legislative gag imposed on SAs' communication with the named persons' defence teams is unworkable, he says. We are constantly fighting over that because we want to discuss the situation with the individual.

Cases have also been unnecessarily prolonged because the Federal Court has discovered, with the assistance of the SAs, that CSIS has not been totally candid about the veracity of its sources and in disclosing evidence, Cavalluzzo notes. If the government shaped up, these proceedings would not take nearly as long.

Copeland also says the government and CSIS don't seem to have a sophisticated understanding of the history or other political realities of the foreign countries involved in security certificate cases.

Harkat's public co-counsel, Norm Boxall of Ottawa's Bayne Sellar Boxall, says there remains a huge constitutional question mark hanging over the security certificate regime which was struck down by the Supreme Court in 2007, and then revised with the addition of the SA regime in 2008. The Federal Court is expected to address constitutional issues about the new scheme when it renders its decision next fall on reasonableness of Harkat's security certificate.

The fact that SAs are successful in some cases doesn't prove the security certificate system is fair or viable in all, or even most, cases, Boxall remarks. I think there is good reason to believe that the government will be reluctant to use it [in the future]. Security certificates are on life support.

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Why the HST drives business to Canada

David Robertson — Fri, 16 Jul 2010 00:00:00 -0400

While politically controversial, when B.C. and Ontario eliminated their provincial sales taxes and harmonized with the federal GST/HST on July 1, they sent a clear message to the world that Canada is open for business.

It also represented one of the last significant steps in the federal Department of Finance's plan that has converted Canada from an economic basket case into a powerhouse.

To understand why, it is important to put the switch from PST to HST in historical context.
Fiscally speaking, Canada was a mess from the mid-1970s to the early 1990s. The government was running annual deficits that, by the mid-1980s, were totalling more than eight per cent of the country's annual GDP; in 1985, Canada recorded a record annual deficit of $37 billion (the equivalent of $69 billion today).

As a consequence, the cost of servicing that debt paying the interest charges only augmented the problem. By the mid-1990s, the federal government's debt-to-GDP ratio reached its all-time high of 68.4 per cent.

With The Economist printing headlines such as Bankrupt Canada!, finance officials knew deliberate steps were needed to rein in the country's deficit and debt.

They took a multipronged approach, which included everything from reining in government spending, modernizing Canada's infrastructure, opening up foreign markets to Canadian exports through free trade agreements such as NAFTA, nationalizing the Canadian federal debt by replacing government debt held by foreigners with debt held by Canadians and focusing on innovation and skills training.
One additional key component was tax reform.

With Canada being a small, open, export-based economy of only 30 million people, what the Canadian government understood was that in order to be relevant in the global economy, Canada had to create a tax system that did not discourage, but rather encouraged, business and innovation.

It was the maturation of the Canadian tax system.

What Canada and Canadians realized is that the historic debate as to whether it was better to tax individuals or tax corporations was really no debate at all. Corporations are merely conduits through which individuals employees and shareholders alike come together to carry on business.

Furthermore, we realized that countries are not made up of corporations, only individuals. After all, the largest shareholders in the country are our public pension plans like the Canada Pension Plan Investment Board and the Ontario Teachers' Pension Plan.) We realized that imposing an excessive tax burden on corporations merely drove business and investment from Canada and the jobs, wages, salaries, dividends and income that went along with them.

From a tax policy perspective, the plan was simple:

-reduce, and where possible, eliminate taxes on capital and business inputs (including provincial sales taxes);

-tax consumer consumption, not business consumption; and

-reduce corporate income taxes.

The changes were gradual, but deliberate. And the changes took place regardless of the fact that political parties on both the left and the right have governed the country over the past two decades. Fundamentally, political rhetoric and dogma gave way to pragmatism and statesmanship, with long-term public policy taking precedent (generally) over short-term political gain.

So what have we achieved over the past two decades?

-In 1991, the Canadian federal government replaced its 13.5 per cent manufacturers' sales tax with the federal value-added tax the GST at a rate of 7 per cent. Concurrently, the province of Quebec began replacing its PST with a value-added tax similar to the GST.

-In 1997, Nova Scotia, New Brunswick, and Newfoundland went one step further, eliminating their PST regimes and replacing them with a fully harmonized value-added sales tax (HST) administered by the federal government.

-By 1998, after three decades of deficits, Canada posted its first annual budget surplus. We then continued posting annual surpluses for the next decade and only dropped back into deficit in 2009, following the global economic meltdown in October 2008.

-In 2003, the federal government began reducing corporate capital tax, and completely eliminated it by 2007. Canada's provinces have also been following suit, such that by 2011, provincial capital taxes on non-financial institutions will have been eliminated in virtually all Canadian provinces.

-Possibly the most dramatic change has been the drop in Canadian corporate income tax rates. In 1999, Canada's average combined federal/provincial corporate income tax rate was 44.6 per cent, compared with a combined federal/states corporate income tax rate of 38 per cent in the U.S. Over the next decade, Canada's corporate income taxes steadily declined. Currently, the combined federal/provincial corporate tax rate ranges between 28 and 32 per cent (depending upon the province), and by 2012, it will be between 25 and 29 per cent. It will give Canada the lowest corporate tax rate among the G7, and between 11 and 15 per cent below the U.S.

The impact of this fiscal discipline on the part of the Canadian federal and provincial governments is clear. Recall that in the mid-1990s, Canada's debt-to-GDP ratio had reached an all-time high of 68.4 per cent. By 2007, that figure had been reduced to 32.3 per cent its lowest level in 25 years. And remember, we achieved this success while at the same time reducing corporate income tax rates, eliminating capital taxes, and eliminating taxes on business inputs by replacing PST with a national HST.

With the introduction of HST in B.C. and Ontario, this progress and maturation of the Canadian tax system continues. Not only does sales tax harmonization eliminate the tax administration and compliance burden on businesses operating in these provinces, but it gives these provinces and Canada a significant competitive advantage over the U.S.

The U.S. (along with Saskatchewan, Manitoba, and P.E.I.) are the last jurisdictions among OECD member states that still impose antiquated sales and use taxes (i.e. PST).

The world is watching. Canada is unique in that our HST permits multiple tax rates in different regions of the country, is a single tax collected for both the national and provincial governments, and has a single tax administration (the Canada Revenue Agency). As a consequence, countries like the U.S., India, the United Arab Emirates, and even the European Union, are looking to Canada's HST as a model.

So while it may seem strange to say it Canada's GST/HST should not be a source of protest, but rather a source of pride for Canadians.

David Robertson is a sales and indirect tax specialist and partner with Fasken Martineau in Vancouver.

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Getting affordable drugs to the developing world

Chuck Gastle And Murdoch Martyn — Fri, 16 Jul 2010 00:00:00 -0400

The G20 Summit in Toronto has wrapped up and, apart from a continuing pledge to resist protectionism, no progress was made on trade issues. And while not surprising, it is disappointing that the World Trade Organization (WTO) still has not improved access to essential medicines in the developing world.

The WTO's so-called Doha Development Round continues to be an unobtainable goal. It commenced in the shadow of 9/11 and was intended to give the developing world a better deal than it did when the WTO was formed in 1995. Nine years later, there is an absence of political will to forge a new trade deal giving the developing world better market access in agricultural and manufacturing goods, even at the tail end of the current recession.

The Doha Declaration on Public Health promised to fix a barrier in the WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Pharmaceutical drugs are a special case under the TRIPS regime. Pharmaceutical companies strongly supported the Uruguay Round Agreements to obtain intellectual property laws protecting their interests. Such protection has been one of the most contentious issues since the formation of the WTO. It was recognized that the conditions imposed on compulsory licensing prevented any member that did not have a domestic generic drug industry to effectively respond to a health emergency.

The most significant problem is the restriction that the goods produced must be predominantly for the supply of the domestic market. This means that Thailand could only license the production of drugs for use within its borders. As a result, a country without a generic drug manufacturing capacity might be barred from issuing any compulsory license under any circumstances, even during a health emergency.

Countries such as India, Brazil and China are noted as having substantial domestic generic industries and thus can maintain manufacturing capacity notwithstanding the restriction. In fact, India has established itself as the most important supplier of generic pharmaceuticals to the developing world. The problem is that as a result of the restrictions on compulsory licensing in the TRIPS Agreement, the generic industries in China, Brazil, or India could not supply any country experiencing a health emergency that does not have a generic drug manufacturing capacity.

In effect, what the system established under para. 6 of the Doha Declaration on Public Health was a waiver of the predominantly-for-the-domestic-market limitation. A developing country can determine a health emergency and issue a compulsory license to a foreign generic drug manufacturer which, in turn, can ask its own government for a compulsory license to manufacture and export the drugs. A series of notifications and production requirements are imposed under the system, including that only the product needed to meet the country's emergency can be produced, no re-export is permitted and all of the drugs must be in specially marked packaging. The restrictions are designed to prevent these drugs from entering into commercial channels.

The problem is that the notification requirements and production restrictions are such that the scheme created by the Doha Declaration on Public Health has been used only once in seven years. It was a shipment of drugs to Rwanda by Apotex Inc., a Canadian generic manufacturer. This is a failure by any measure.

The Doha Declaration, however, is not the full story on access to essential medicines. Thailand has been at the forefront of this debate. In 2007 and 2008, the government of Thailand issued compulsory licenses for six essential medicines. This ignited a firestorm of criticism and debate on the compulsory licensing regime in the context of government use. The Thai Ministry of Health had tried to negotiate voluntary licenses, but found that to do so simply delayed the delivery of effective medicines where needed. Remarkably, the benefit of Thailand's compulsory licensing of these drugs was the reduction in price of at least one of them to close to the generic price.

The Ministry of Health points out the compulsory licensing scheme in Thailand does not threaten the global system of pharmaceutical patents. First, Thailand only represents 0.5 per cent of the world demand for pharmaceutical drugs. Second, compulsory licensing is only possible in less than 15 per cent of all patented drugs. Most of the drugs remain monopolized because of the complexities of production.

Unfortunately, the Thai experience cannot be generalized. Once again, the problem is that a developing country without a generic drug capacity can issue a compulsory license to a foreign drug manufacturer only in accordance with the scheme established by the Doha Declaration on Public Health.

It may be that a comprehensive trade deal is impossible for the foreseeable future. The WTO should take action to fix the problems that exist with the current scheme designed to provide access to essential medicines.

Chuck Gastle is a principal of Bennett Gastle P.C., a litigation and international trade boutique in Toronto. Murdoch Martyn is an international trade lawyer and in 2009-2010, taught a course on NAFTA at Osgoode Hall Law School.

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'Magic' iPad proves popular with lawyers

Luigi Benetton — Fri, 16 Jul 2010 00:00:00 -0400

Given the seemingly inescapable buzz surrounding Apple Inc.'s iPad, you probably don't need it explained to you. It's a tablet/slate computing device, it has a touch screen, no keyboard, and Apple CEO Steve Jobs calls it magical.

But what magic does it bring to a law practice?

Early adopters in the legal profession explain that magic in several ways.

It doesn't change the way I work, says Toronto real estate attorney David Feld, but it adds flexibility. It allows me to leave the office without really leaving.

I don't think it will replace a laptop, but it can do many things a lot faster, adds David Stuckel, a Peoria, Ill.-based workers compensation and labour relations lawyer.

Here's how Feld explains the physical layout of this slate and its effect on the computing experience: I call an iPhone a small iPad. The iPad takes all the apps that I wouldn't bother with on the iPhone and makes them fun and usable.

You don't have to be tied down to a computer, claims Memphis, Tenn.-based bankruptcy lawyer Arthur Ray. It's easier than working on a computer. I've had laptops, and this is exponentially easier.

Ray's assertion may surprise those who wonder how you use a computing device that does not have a physical keyboard. Instead, the iPad displays a large version of the virtual onscreen keyboard which first gained notoriety on Apple's iPhone.

The virtual keyboard is an acquired taste (note: this article was drafted using said keyboard) that not everybody wants to acquire. Stuckel falls into this camp, but it hasn't stopped him from finding workarounds. He relies on an app called Penultimate, one of several that permit iPadders to write notes directly on the screen using their fingers. The app saves notes as images for later reference.
Feld's getting used to the keyboard, though he finds it awkward to tap a screen instead of clicking a mouse. I also use dictation software with it to reduce my typing when searching for things on the Internet and when sending e-mail, he says of his preferred workaround.

(When using Google Voice Search) I can just say 'BP oil spill' while I'm holding my baby and I get all the news on it, Feld continues, then sighs: Sometimes when you're changing a baby, all you can think about are oil spills.

Stuckel, who finds himself on the road much of the time, calls it a communication tool. I need something I can access quickly when I'm on the road, he says. I don't want to wait three minutes for a computer to boot up.

I can get into my e-mail in 20 seconds.

The iPad also compares favourably with the reigning champ of mobile technology among lawyers in several ways. I don't have to charge it but every two to three days, Stuckel says. I have to charge my Blackberry every 36 hours or it's dead.

Don't expect lawyers to abandon Research in Motion in droves at this news, but the Blackberry's much vaunted e-mail handling may be facing its most serious challenge yet.

It's a real problem if you have to look at attachments on the Blackberry, Stuckel notes. The iPad is certainly easier to use than Blackberries when you have real email with real attachments. There's no 'page too large to load' stuff.

Feld feeds his paperless bent by routing all faxes and voicemail into the Mail app. I don't miss any information that way, he says. It allows me to go from room to room and office to office without really carrying anything. I can be anywhere in the office (yes, even the washroom) and still see my entire law firm's activities.

Feld also reviews agreements of purchase and sale and faxes on the iPad. The screen is the perfect size to see a whole page at a time and zoom into the important areas (or unclear areas as many of our agreements are faxed to us), he explains. You can get one page on the screen at a time. I can pinch and zoom in on spotty faxes.

The iPad's pinch zoom doesn't always help, though. When you try to zoom in on small handwriting, it can get pixelated, notes Stuckel.

Apple designed the iPad to compete in several technology niches, not the least of which is e-readers, and legal and business publishers have taken note.

Ray's reading list includes books he downloads from Amazon that help him market his law practice. I had a Kindle before this, but that's like comparing a Model T Ford to a Ferrari, he says. Going through a petition took forever on the Kindle.

It's big! That's what's great about it you can see a whole page.

Third-party PDF readers like GoodReader win raves among all three lawyers, and Apple will soon update its iBooks application so that it, too, handles PDFs.

Indeed, while Apple did plenty right on the iPad it's fast, the battery lasts a reported 10 hours, and so forth the real magic comes to the device thanks to third parties that develop custom-made iPad apps. Those apps include Google tools, Penultimate, dictation recorders, word processors, RSS readers, even legal resources. Its flexibility leads to use in research, client meetings and trials, as well as the office.

As big a fan as Feld happens to be he bought the first of his three iPads before it was available in Canada he is looking for an app that lets him search files on his server.

Stuckel concedes another shortcoming. I can't print from my iPad, he says, but that isn't a big deal. I can just look at it.

Feld, Stuckel and Ray plead guilty when asked whether they sometimes use the iPad just for fun. Faced with the question of whether he finds himself trying to justify it for business use, Feld quips Just to my wife.

It's a toy, Stuckel admits, but it's a useful toy.

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Political donation debate

Michael Benedict — Fri, 16 Jul 2010 00:00:00 -0400

The debate over whether law firms and lawyers should give political donations no matter how small the amount is heating up in the wake of two recent cases.

When a prominent Quebec lawyer angrily resigned from a provincial inquiry in June, it was the second time in two months that a maelstrom over political donations swept a special prosecutor out of a job. In both instances, the media and opposition political parties strongly suggested that the counsel's past political donations impugned his impartiality. Others argue that such suggestions are utter nonsense.

How large a hair shirt must we wear, says Bob Rae, a lawyer, former Ontario premier and now Liberal MP. We're living in an age of hypersensitivity it's nutsy.

In May, Vancouver lawyer Terry Robertson resigned as a special prosecutor investigating alleged election improprieties by then Solicitor General Kash Heed after it became widely known that Robertson's firm had contributed $1,000 to Heed's 2009 successful rookie election campaign. Soon after B.C. Liberal premier Gordon Campbell brought the former West Vancouver police chief into his cabinet, Heed became embroiled in controversy. Earlier this year, the government asked Robertson to investigate the alleged election campaign dirty tricks.

At the time, Robertson, a Harper Grey LLP partner, knew this his firm had made the $1,000 donation, but felt that the transaction did not impinge on his neutrality. Robertson, who does not belong to a political party, had been conducting special prosecutions since 1994, including a 2001 investigation that led to charges against a Liberal MLA.

In the event, Robertson cleared Heed, but approved charges against two of his senior campaign workers. The next day, a senior provincial justice official, upon learning of the donation, telephoned Robertson to express concerns about how the public might view the relationship between the financial contribution and the special prosecutor's decision not to proceed against Heed. Robertson immediately stepped down.

Meanwhile, one month later, chief prosecutor Pierre Cimon felt forced to resign from a Quebec inquiry into alleged Liberal party political interference in the nomination of judges. Cimon, over a five-year period, had made five separate donations to the Liberal party, ranging in amounts of $250 to $750. Cimon had told the inquiry chair, former Supreme Court of Canada Justice Michel Bastarache, about the contributions, and neither man considered them an impediment.

But the opposition had a contrary view, and Cimon came under public attack within a week of his appointment. Declaring himself non-partisan, the Quebec City lawyer with four decades experience decided that he could not continue as chief prosecutor. The climate was unbearable, he said. It was impossible, given everything that was said, to work in peace and conduct a major investigation. We cannot do an inquiry like this while always being suspected of partisanship.

While Cimon felt wronged, Robertson felt the need to apologize. The Vancouver lawyer said that he agreed that his firm's donation presented a serious public perception issue. It is clear now that I should not have accepted this assignment, Robertson said afterwards. For that, I am truly sorry.

Harper Grey went one step further, halting all political donations as a result of the imbroglio. It also returned Robertson's fees. Harper Grey recognizes the public concern and seriousness of thematter, the firm said in a statement. We regret that the action of one of our firm's partners has initiated concerns regarding the special prosecution process. It added, The work should not have been taken on.

Such a view is gaining some traction. In a recent column on legal weblog Slaw, Doug Jasinski questions whether law firms should continue with political donations. From a marketing perspective, the former lawyer, now ad agency principal, says the answer is probably no, given the increased public scrutiny of and lack of trust in the legal profession.

The risk/reward ratio for law firm political donations is frequently too high to make it a prudent marketing strategy, Jasinski argues. Firms interested in pursuing government-related work of any kind need to be both completely transparent and utterly pristine in their dealings with public bodies and political organizations.

Campaign contributions muddy the waters, and where mud exists, mud-slinging is sure to follow.

University of Ottawa law professor Stephane Émard-Chabot also urges caution when law firms dip their toes in political waters. Given the close nexus between lawyers and politicians, he says both groups must exercise special caution in their relationships. Lawyers are highly represented in the political class, says Émard-Chabot, a former Ottawa city councillor and a former practising lawyer. The links are always there; adding a financial aspect makes it even more complicated.

As a result, he says law firms, as business entities closely associated with the administration of justice and political parties, should abstain from making political donations, even though they are largely a matter of public record. However, Émard-Chabot adds that individual lawyers should be free to make political contributions as long as they are transparent.

Maintaining integrity is the most important thing, both for the legal profession and the politicians, Émard-Chabot says.
Right now, there is close to a crisis of confidence in both groups. It hurts every time that a law firm is seen to be influencing and joining the network of power. And there is a compounding effect. People say, 'Oh, there they go again.'

He adds: Projecting a clean image is more important than the ability to raise funds from law firms. Everything that can be done to lower raised eyebrows is well worth it.

Nevertheless, he acknowledges that the amounts of money involved, by legislation, are so small that political donations are unable to achieve any influence. Because of these legal limits, the gain to politicians is small while the loss to lawyers and politicians is large.

Not necessarily, says Dean of Osgoode Hall Law School of York University Lorne Sossin. For him, the key is transparency, not the donation itself. Referring to the B.C. situation, Sossin says: Nobody would believe that a $1,000 contribution by the firm would jeopardize the special prosecutor's impartiality. But there is an appearance of impartiality.

He faults law firms for generally not having in place better procedures to let their members know about gifts, whether to a charity, a politician or a political party, so that individual lawyers can be aware of potential conflicts of interest. The current situation of little internal disclosure is not sustainable, says Sossin, who is also director of the law school's Centre for the Legal Profession, established in part to examine ethical and professional issues. The law firms have to get out of donations or become more transparent.
Clearly, he favours the latter approach. We should not begin with the premise that all donations are evil, Sossin says. If donations stopped, the political system would cease to function.

Instead, in the case of a special prosecution appointment, he suggests that both the government and the lawyer should be aware of any donation. Explains Sossin:

The key to disclosure is that both sides at the outset can consider whether the relationship is proper. It should be discussed and perhaps even given to a third party to assess. Then, if the assignment goes ahead, the parties can say the potential conflict was known and investigated before proceeding. That's impossible after the fact.

Joining Sossin on the pro-law-firm donation side is Tim Murphy, a partner at Macmillan LLP in Toronto and chief of staff to former prime minister Paul Martin. There is virtue and value in making political donations, Murphy says. Firms and individual lawyers have a responsibility to participate and contribute to the political process, especially in the legal context where we, as lawyers, are the interpreters and arbiters of rules as they apply to the public.

Noting that lawyers and their firms are also members of the community, Murphy says they should demonstrate their commitment to society by participating in community events, including those that involve donations such as political fundraisers.

As for ethical and conflict-of-interest concerns, Murphy says the public has overreacted. If I am asked to be an independent prosecutor and I had made a personal contribution, that suggests a connection, he says. But if one of my partners individually or the firm gives money, then reality has nothing to do with perception.

He adds, emphatically, Because people have a gross misconception about how the system works, it's an astounding thesis that others should base their behaviour on that gross misconception.

Rae agrees. The pendulum has swung too far. The amounts are so trivial that they can't buy influence, yet you can't run an election campaign without money.

Meanwhile, the British Columbia government has appointed a new special prosecutor to investigate Heed, and questions are being raised about seven other special prosecutors who either made personal donations to the Liberal party or work at firms who gave. Everyone seems to be examining their donation practices. Says Doug Buchanan, a partner at Davis LLP in Vancouver, one of the province's leading firms: We are alert to the issue and are considering it.

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Public commission on legal aid formed in B.C.

Gary Oakes — Fri, 09 Jul 2010 00:00:00 -0400

Six of the major players on the British Columbia law stage have formed an organization they hope will find solutions to the continuing crisis in legal aid throughout the province.

Access to justice is one of the cornerstones of our society, Stephen McPhee told The Lawyers Weekly. It is as essential a service as health care and education.

[W]e have a responsibility to ensure that no Canadian is denied adequate access to our justice system because they lack the ability to pay for essential legal services.

If British Columbians cannot receive guidance on legal issues, then they are not able to participate properly in our justice system, and the system is likely to fail them, McPhee added.

He's vice-president of the B.C. branch of the Canadian Bar Association (CBABC) and chair of the steering committee that is overseeing the newly-minted Public Commission on Legal Aid (PCLA).

It will hold meetings around the province this fall to hear from ordinary people and stakeholders on what's wrong with the system and then produce problem-solving recommendations to the provincial government.

The commission is jointly funded by CBABC, the Law Society of B.C., the Law Foundation of B.C., the B.C. Crown Counsel Association (BCCCA), the Vancouver Bar Association and the Victoria Bar Association.

It will be led by highly-regarded veteran Vancouver lawyer, Leonard T. Doust of McCarthy Tétrault.

McPhee explained that last December, CBABC passed a resolution calling on the province to hold public hearings on the legal aid system.

When it became apparent in subsequent months that the government wasn't going to fund such a project, members of the steering committee decided to take up that task themselves.

A common theme was that it is important to engage the public on the issue of access to justice and drive the future of legal aid through the views of the public to whom the system belongs and for whom it exists.

Steve Fudge, president of the BCCCA, told the national legal newspaper that his group hopes the commission hearings will increase public awareness of the many ways in which better legal aid coverage actually reduces the overall cost of our justice system.

He said in both civil and criminal cases, unrepresented persons require more court time at every stage. And the main problem is not that lawyers don't want to take on legal-aid cases.

[I]t is that so many people who require someassistance with their court proceedingsare denied any legal-aid coverage at all.

When that happens, judges (and in criminal proceedings, Crown counsel) must then take on a dual role: on the one hand ensuring that the litigant or accused person understands what is going on and is given a fair hearing or trial, while on the other deciding the case (if a judge) or vigorously presenting the case against the accused (if Crown counsel).

Fudge pointed out that while prosecutors and defence counsel can speed things up in criminal cases by agreeing on evidence admissions or guilty pleas, it's not that simple with someone who's defending himself.

For example, even if such a deal is made with an unrepresented accused, there is little to stop that person from changing his or her mind at the last moment and reneging on the agreement, he said.

In addition, just explaining a proposed agreement about admissions or [a] guilty plea is a much more difficult and time-consuming task when dealing with an unrepresented accused.

Fudge's group also hopes the commission hearings may generate some useful ideas about the best ways to finance and deliver an effective legal-aid program, noting that both Ontario and Manitoba have recently seen fit to increase funding for such services in their provinces.

Although there was a threat of withdrawal of services in Ontario, it does not appear that was the motivation in Manitoba, and I am not persuaded it was the only factor at play in Ontario.

He insisted that Crown counsel in B.C. firmly believe that providing broad legal-aid coverage to those caught up in our court system is cost effective.

And there is a moral dimension as well: I don't think anyone wants to see children apprehended who ought not to have been; or [to have] access to children denied when it ought to have been granted; or someone convicted of a crime they did not commit; yet the risk of such outcomes increases as legal-aid coverage decreases, Fudge told The Lawyers Weekly.

When the Public Commission was announced on June 24, CBABC President James Bond noted that while legal-aid funding has been slashed, the demand for such services has increased.

He now believes that unless government hears that the peopleconsider legal aid a priority, it is unlikely that the difficulties [the system has] faced over the last two decades are going to change.

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Appeal court limits tort claims by employees

Steve Levitt — Fri, 09 Jul 2010 00:00:00 -0400

Over the last couple of years, employment counsel have had to carefully review employees' circumstances to ensure they were not overlooking significant tort claims against employers. However, a recent decision of the Court of Appeal may have closed the door to employee tort claims based on negligence.

In Piresferreira v. Ayotte, [2010] O.J. No. 2224, the Ontario Court of appeal decreased a large claim won by an employee who was constructively dismissed and suffered from post traumatic stress disorder as a result of her abusive manager. The case involved an employee who was an account manager at Bell Mobility in Ottawa who suffered from increasingly strong verbal abuse from her manager. Her manager then physically pushed her in 2005 and, when the employee pressed for an apology, informed her that he was filling out a performance improvement plan for her.

While Bell Mobility investigated this incident and reprimanded the manager, it never informed the employee of this, and collaborated with her manager in imposing a performance improvement plan. The employee became ill, never returned to work and commenced an action for constructive dismissal and tort.

The trial judge found Bell Mobility liable for the torts of negligent infliction of mental suffering, intentional infliction of mental suffering, and battery. She concluded that the employee could never work again because of her disability caused by her manager and Bell Mobility, and awarded both general damages (of $50,000) and loss of income until the age of 65 ($500,924) less a 10 per cent contingency for the possibility she would not have worked until the age of 65. The trial judge would have awarded damages for constructive dismissal based on a 12-month notice period ($87,855) and bad faith in the manner of dismissal ($45,000), but did not do so on the grounds that they would have duplicated the tort damages.

The Court of Appeal overturned the damage award and determined that the tort of negligence and the tort of negligent infliction of mental suffering is not available in the employment context. Essentially, the appeal court replaced the tort damages with the damages for constructive dismissal. Despite evidence demonstrating that the employee was no longer able to work and would suffer a loss of future income, the appeal court only awarded the employee damages for constructive dismissal of $87,855, damages for bad faith of $45,000, and damages for battery of $15,000.

While the appeal court found that proximity and foreseeability existed to establish a duty of care, it concluded that there should not be a duty of care between an employer and employee for policy reasons. The court was of the view that recognizing the duty of care would duplicate the obligation of good faith and fair dealing, as well as claims for constructive dismissal, and was therefore unnecessary. The court based its decision in part on its conclusion that no Canadian appellate court has recognized a free standing cause of action in tort against an employer for negligent infliction of mental suffering, and that the recognition of such a tort is better left to the legislature.

This conclusion is problematic in a number of respects. First, the appeal court did not refer to Sulz v. Minister of Public Safety and Solicitor General, [2006] B.C.J. No. 3262, where the B.C. Court of Appeal upheld a damage award of over $900,000 based on such a tort claim (however, the employer conceded negligence, so the B.C. Court of Appeal did not have to address the issue directly.)

Second, the appeal court is unclear whether its conclusion on the duty of care was limited to the tort of negligent infliction of mental suffering, or if it applied to negligence in general. As a consequence, there is some uncertainty as to how this decision fits with other cases that have recognized a duty of care in the context of the employment relationship. For example, in the leading decision on negligent misrepresentation, Queen v. Cognos Inc., [1993] S.C.J. No. 3, the Supreme Court of Canada (SCC) found a duty of care on the part of the employer making representations to an employee in the recruitment process.

Third, the tort of negligence (particularly negligent infliction of mental suffering) is not duplicative of the duty of good faith and fair dealing. As the SCC made clear in Honda Canada Inc. v. Keays, [2008] S.C.J. No. 40, the duty of good faith and fair dealing only applies to the manner of termination by the employer. For the tort to be duplicative, the duty of good faith to an employee would have to apply throughout the employment relationship, and that is not the case.

In a decision that post-dated Keays, RBC Dominion Securities Inc. v. Merrill Lynch Canada Inc., [2008] S.C.J. No. 56, the SCC found that an employee owes a duty of good faith to the employer throughout the relationship. There is no good reason why the duty of good faith should not be reciprocal throughout the entire employment relationship; the appeal court has presumed that this is the case without pointing to any decision confirming that proposition.

The appeal court also refused to recognize a duty of care in the employment context on the basis that the matter is better left to the legislature. However, the Ontario legislature has spoken on this issue. Recent amendments to the Occupational Health and Safety Act (Bill 68), effective June 15, require employers to create and administer anti-harassment and anti-violence policies and programs. While the amendments to the Act were not law at the time of the decision, they send a strong signal that public policy favours recognizing a duty of care.

Finally, the Ontario Court of Appeal's award of damages for bad faith fails to compensate the employee for her actual loss. In Keays, the SCC stated that compensation for breach of the duty of good faith is to be awarded not through an arbitrary extension of the notice period, but through an award that reflects the employee's actual damages. In this case, the evidence established that the employee would no longer be able to work and thus suffered a loss of future income. Based on the principles in Keays, the damages awarded ought to have compensated the employee for the loss of future income, even though they were awarded on the basis of contract damages as opposed to tort. The loss of future income formed part of her actual damages.

Piresferreira has exposed issues that will require further appellate consideration, possibly by the SCC. In the interim, counsel should ensure that if they are pursuing a claim for bad faith, they lead evidence establishing a connection between a significant impact to an employee's health due to the manner of dismissal and the losses being suffered, in order to be entitled to an award of damages.

Steve Levitt practises employment law with Nelligan O'Brien Payne LLP, a full service law firm in Ottawa.

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Proposed PIPEDA amendments upgrade key provisions

Fazila Nurani — Fri, 09 Jul 2010 00:00:00 -0400

The Minister of Industry recently tabled amendments to the federal private sector privacy legislationthe Personal Information Protection and Electronic Documents Act (PIPEDA). Two major amendments include breach reporting and notification requirements, and a consent exemption for the use and disclosure of personal information in business transactions.

PIPEDA was introduced in 2001 and has applied to many private sector enterprises since 2004. Section 29 of PIPEDA requires Parliament to review Part 1 of PIPEDA every five years, and the House Standing Committee on Access to Information, Privacy and Ethics (ETHI) completed that review in 2007. Over three years later, Bill C-29, the Safeguarding Canadians' Personal Information Act, will amend PIPEDA in several significant ways.

Under Bill C-29, a breach is defined as loss of, unauthorized access to, or unauthorized disclosure of personal information resulting from a breach of the organization's security safeguards or from a failure to establish those safeguards. Only the Alberta statutory equivalent to PIPEDA, the Personal Information Protection Act, currently has a breach notification requirement, but under the Alberta statute, breaches must be reported to the Alberta privacy commissioner if there is the possibility of harm to even one individual. The Alberta commissioner will then determine if individual notification is required.

Under the PIPEDA amendments, on the other hand, organizations must report data security breaches involving personal information to the Privacy Commissioner of Canada only if they are determined to be material. Materiality would be assessed based on criteria that include sensitivity of the information, the number of individuals affected and whether the breach is indicative of a systematic failure of security.

Unlike the Alberta model, the commissioner has no power to require the organization to notify individuals, nor does she have any power to seek a remedy on behalf of affected individuals unless they themselves complain.

Bill C-29 states that affected individuals must be notified if the organization deems the breach to pose a real risk of significant harm. Significant harm is defined to include bodily harm, humiliation, damage to reputation or relationships, loss of employment, business or professional opportunities, financial loss, identity theft, negative effects on one's credit record and damage to or loss of property.

Notice has to be given as soon as feasible after the organization confirms the occurrence of the breach, and must contain enough information to allow individuals to understand the significance of the breach. The form and manner of notice will be set out in regulations, which I presume will allow for notice to large groups of people through the mass media where it is not feasible to give individual notice.

Given that under Bill C-29 the organization itself determines whether the thresholds of material breach and real risk of significant harm are met, businesses may be left with a great deal of wiggle room for breach reporting and notification. Arguably, the absence of penalties for non-compliance in reporting breaches is a weakness of the bill as well. However, the bill may still have the desired effect, as public awareness and expectations are heightened on the appropriate response of an organization that fails to protect personal information.

Bill C-29 permits organizations to use and disclose, without the knowledge and consent of the individual, personal information related to prospective business transactions, as is the case in Alberta and B.C. A prospective business transaction is defined to include purchase or sale of a business, mergers and amalgamations, financings, leasings and joint ventures. The bill thus remedies a flaw in the current legislation that makes certain aspects of due diligence difficult. The parties must have entered into an agreement that requires the recipient to use and disclose the information solely for the purposes related to the transaction; to protect that information with appropriate safeguards; and, if the transaction does not proceed, to return or destroy the information within a reasonable period of time. It is also a condition that personal information be necessary to determine whether to complete the transaction.

If the proposed transaction successfully completes, there would be a post-closing notification to affected individuals whose personal information may have been disclosed. However, transactions where the primary purpose is the purchase, sale or other acquisition of personal information (i.e. the primary or sole asset is a customer database), will not be covered by this new consent exemption.

Other key proposed amendments include:
- An expanded carve-out for business contact information, and new consent exceptions for work product information and employee information in the federally regulated sectors;
- Clarification that consent required is only valid if it is reasonable to expect that the individual understands how and why their information is being collected, used or disclosed; and
- Clarification on the meaning of lawful authority for the purposes of disclosing personal information to government institutions without knowledge or consent of the individual.

While the proposed amendments do not address every recommendation of the ETHI, they will certainly bring PIPEDA more in line with the similar provincial statutes of Alberta and B.C., and represent a necessary upgrading of a statute that impacts many private sector enterprises on a daily basis.

Fazila Nurani is the president and founder of PrivaTech Consulting. She is a privacy lawyer and an information management consultant, as well as a Certified Information Privacy Professional in Canada. She advises organizations in a wide range of industries on privacy best practices.

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Perks rise along with mercury

Donalee Moulton — Fri, 09 Jul 2010 00:00:00 -0400

Summertime and the livin' is easy.

Lawyers want to believe the lyrics to Billie Holiday's song are more than mere melodyand firms are working hard to enable their teams to enjoy a more relaxed pace as the weather heats up.

We try to be flexible where we can. People place a high value on time, said Mary Jackson, chief officer of legal personnel and professional development with Blake, Cassels & amp; Graydon LLP (Blakes) in Toronto.

Acknowledging that value is an important way to show appreciation for lawyers, especially as the recession fades and law firms return to business as usual, or better. As we emerge from the recession, recruitment and retention will become an increasingly important component of a firm or corporate legal department's personnel strategy. As firms recommence hiring, it is essential to recognize and reward employees or risk losing them to other opportunities, noted John Ohnjec, a lawyer and division director with Robert Half Legal in Ottawa.

If increased compensation is not a current possibility, employers should consider other low- or no-cost alternatives, he added. Flexible work schedules and summer employee activities are a great way to supplement a firm's employee engagement plans.

The message firms send when they provide little extras, or greater flexibility, is significant, said Chris Hornberger, a partner with Halifax Global, a management consulting firm in Nova Scotia. Lawyers and law firm staff are looking for signs they are appreciated and respected. Employees who feel appreciated, in turn, are more likely to be the most satisfied and productive.

The benefits of living easier in the summer often far outweigh the cost. The little perksan ice cream [for everyone] or a barbecue outsideare fun and valued, said Jackson. Sometimes the small things can buy you great goodwill.

Blakes does a number of things to give employees more time to enjoy the warm summer months. For example, the firm closes early before long weekends and puts on only a skeleton staff when a holiday is stranded before or after a weekend.

It shows you are trying to be sensitive to people's lives, stressed Jackson.There are numerous ways to show that sensitivity. Flexible schedules are a popular and efficient way for employers to offer work flexibility because it involves little or no additional cost as long as the work gets done and schedules are coordinated among staff. Also, more people are seeking flexible schedules as they strive to balance their careers and personal lives, said Ohnjec.

Another option is giving a few hours back to workers on Fridays so they can launch into their weekend plans, whatever they are, earlier, he added. Many employees schedule weekend trips during the summer, so they appreciate getting an early start to their travels and beating traffic to their next destination.

Of course, it's not all about getting away from the office. Sometimes it's all about getting together with colleagues in a relaxed and enjoyable atmosphere. Firms that make the effort to bring lawyers and staff together are rewarded for that effort by increased loyalty, reduced absenteeism, and enhanced productivity, said Hornberger.

The key, she added, is to put together an event that staff will want to come to as opposed to one they feel they have to come to. This could be an annual ball game, a barbecue at a senior partner's cottage, a family day with bouncy castles and yo-yos for the kids, or a team hike followed by a picnic.

Usually it's not what you do, it's that you take the time to do it, said Hornberger.

And summer, of course, allows you to do it outdoors. Planning a firm-wide picnic, sporting event or activity isa great way to take advantage of the warm weather, said Ohnjec. While it may mean a few hours away from the office, the improved morale and team camaraderie could actually help productivity.

If appropriate, he added, allow employees to bring significant others or children. Employees who feel their employer supports them in their personal life as well as professional will often be more engaged in their work environment.

Giving staff more time to enjoy the lazy, hazy, crazy days of summer is smart business. It is, bottom line, a cost-effective recruitment and retention strategy. According to a study by Salary.com, one of the top three reasons why employees leave their job is insufficient recognition.

By building in some flexibility and fun, law firms are rewarding their top performers and encouraging others to strive harder, said Hornberger.

In a recession, the little extras also add up to a lot more. With tightened budgets and increased responsibility among staff, many companies are offering greater schedule flexibility to reduce the risk of burnout, noted Ohnjec.

For firms that aren't sure just what options would best appeal to their legal teams, there's a sure-fire way to find out. Ask them. Law firms need to develop and maintain regular feedback mechanisms, said Hornberger. In order to respond effectively to employees' needs, you have to know what those needs are.

The time to ask, she noted, is not the staff picnic. Annual staff surveys, informal focus groups, a workplace health committee, ongoing input from HRthese are all tried and true options for soliciting feedback. And once you have that feedback, you need to act on it.

_________________________________________________________________________________

Summertime and the livin' is not always easy

Accommodating staff requests for summer hours, increased flexibility, and a lighter load is not always easy. It is challenging, noted Mary Jackson, chief officer of legal personnel and professional development with Blake, Cassels & amp; Graydon LLP in Toronto.

Addressing those challenges is a critical element in employee satisfaction and retention. Solutions are at hand, however. For example, if you don't have regular contact with staff members due to adjusted schedules or telecommuting, you may not always have a clear sense of what they are working on. Check in with employees via phone or e-mail and request regular update reports. Schedule times to meet in-person when there is availability, said John Ohnjec, division director with Robert Half Legal in Ottawa.

Firms will want to acknowledge the work, and the needs, of those who are also not benefitting from more flexible schedules. There may be tension and jealousy.

There is a solution: addressing the issue head on. It is important for employers to equally consider requests from all workers, noted Ohnjec. If there are business reasons for why a flexible schedule will not work for a staff member, a manager should share this information so that there aren't misunderstandings.

Also, he said, include guidelines about flexible schedules in the employee handbook.

Employees do not expect a cookie-cutter approach, noted Chris Hornberger, a management consultant in Halifax, but they do expect to be treated fairly. Explain how your approach is reasonable for both the individual and the firmand explain early. Tensions that are allowed to build over time can be very difficult to dismantle.

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Giving back with tax sparing

Vern Krishna — Fri, 09 Jul 2010 00:00:00 -0400

Canada's direct economic foreign aid to developing countries receives a good deal of attention. Less obvious, because it is less understood, is Canada's indirect foreign aid through international tax treaties through tax sparing. Tax sparing is an economic concept that allows a country to grant foreign aid through the tax system instead of direct parliamentary budget expenditures.

Under tax sparing, a multinational enterprise's (MNE) country of residence spares the corporation taxes that it might have had to pay on income that it earned in a foreign country, but which the foreign country forgave because of special tax concessions. Tax sparing is a credit for unpaid taxes, whereby both countries lose tax revenues. The source country loses revenue by forgiving taxes; the residence country loses by granting credits for phantom taxes. A win-win for the MNE.

The source country is prepared to lose revenues in the interests of attracting foreign investors to it in order to stimulate economic investment and development. The residence country loses revenues by giving the MNE a credit for notional taxes never paid, but gets nothing in return. Thus, the residence country subsidizes the source country in the latter's economic developmentan indirect and non-transparent form of foreign aid.

For example, the Canada-Brazil Tax Treaty provides that Canada will provide a credit of 25 per cent for withholding taxes on dividends and interest remitted from Brazil to Canada, regardless whether the payer in Brazil actually paid withholding taxes at those rates. Since the withholding rate on dividends and interest under the Treaty is set at a maximum of 15 per cent, the Canadian parent corporation gets a credit for an incremental 10 per cent that its Brazilian subsidiary never paid in taxes. Clearly, an incentive for Canadian MNEs to invest in Brazil.

The concept of sparing emerged in the 1950s following recommendations by a British Royal Commission that the United Kingdom adopt the concept in its treaties. Since then national positions on tax sparing have changed in compassion with political and economic shifts. Even the United States, now an ardent opponent of tax sparing, supported the idea in the early 1950s. In 1955, President Eisenhower spoke to Congress on his foreign economic policies and said: Under proper safeguard, credit could be given for foreign income taxes which are waived for an initial limited period, as we now grant a credit for foreign taxes which are imposed. This would give maximum effectiveness to foreign tax laws that are designed to encourage new enterprises.

The Senate Committee on Foreign Relations rejected the novel concept. Understandably, tax sparing is controversial. Countries enter into income tax treaties with developing countries for political and economic reasons. Some use tax sparing as part of their foreign aid policy to promote industrial, commercial and scientific development in developing countries. They are also concerned that if they do not agree to tax sparing provisions, their MNEs may be at a competitive disadvantage with other countries that do provide for such arrangements. Thus, competitive economic considerations pull in countries that might otherwise not accede to tax sparing provisions for principled tax policy reasons.

Tax sparing is essentially a non-transparent way of providing foreign aid. Since the cost of the aid is buried in the loss of tax revenues (tax expenditures) to the resident country, the cost is hidden from public scrutiny. Tax sparing distorts capital markets and the allocation of resources between domestic and foreign investment decisions. For example, an MNE that can take advantage of tax sparing in a foreign country has a competitive advantage over domestic enterprises in the residence country. Clearly, a policy that rewards an MNE for its foreign investments compared with domestic enterprises is neither neutral nor economically efficient for the residence country.

Tax sparing also promotes avoidance corporate conduit structures in international business and is a magnet for treaty shopping. The best route for Canadian corporations into India is through Mauritius. Tax sparing also allows MNEs to inflate their profits in the source country through transfer pricing mechanisms. Transfer pricing rules attempt to prevent such abuses in related party transactions. The guidelines, however, require efficient tax administration and have substantial costs to enforce effectively. Transfer pricing disputes involve prolonged litigation.

As with all tax expenditures, tax sparing incentives are equivalent to direct grants or subsidies. Many countries have systems in which they provide direct grants and subsidies to businesses for certain types of operations in certain locations. These grants and subsidies are a cost.

Forgiveness of tax through a tax holiday is nothing more than an economic cost to the source and residence countries. The only difference between a direct grant and forgiven taxes is in the manner of delivery of tax benefits. Just as it would be inappropriate for the residence country to seize the direct grant that a business received in the source country, it would be equally inappropriate for the residence country to claw back tax incentives provided by the developing country. The opposition to, or support of, tax sparing evolves and changes as economies develop and global trade and investments increase. Pragmatic economics is always a strong counterweight to theoretical tax principles.

Vern Krishna is tax counsel with Borden Ladner Gervais LLP, and executive director of the CGA Tax Research Centre, University of Ottawa.

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Air India inquiry offers a legal blueprint for the fight against terrorism

Cristin Schmitz — Fri, 02 Jul 2010 00:00:00 -0400

Lawyers are pivotal players in fighting terrorism whether they are sorting out the internecine squabbles of Canada's national security agencies, prosecuting multifarious terror charges, acting as special advocates (SAs), or simply giving independent legal advice to people desperate enough to consider joining the RCMP's witness protection program.

That is one of many messages that can be gleaned from the 2,600-page report of the Commission of Inquiry into the Investigation of the Bombing of Air India, Flight 182 which proposes to situate lawyers at most of the key junctures in the nation's future anti-terror efforts.

Delivered June 17 in Ottawa by retired Supreme Court justice Jack Major of Calgary's Bennett Jones, the $32-million report ($16 million for legal fees) details the depressing turf wars, communication gaps, and shocking bungling of the RCMP, CSIS, and other entities and officials that failed to prevent the 1985 attack that killed 329 people, and which has blighted the investigations and prosecutions in the intervening 25 years.

Lawyers who deal with national-security related issues told The Lawyers Weekly the five-volume report offers up a precise, reasoned, and innovative blueprint for handling many terrorism-related legal issues (see page 26).

Commissioner Major's 29 multi-pronged recommendations are underpinned by four volumes (1,264 pages) of specially commissioned, groundbreaking original research, such as University of Toronto law professor Kent Roach's look at handling the thorny disclosure/secrecy dilemma in terrorism prosecutions, and former Manitoba Deputy Attorney General Bruce MacFarlane's comparative analysis of terrorism mega trials.

The inquiry's chief counsel, Mark Freiman of Toronto's Lerners, led the team of about a dozen lawyers who helped Commissioner Major put together his report over a three-year-period.

Freiman told The Lawyers Weekly the commission has proposed many cutting edge solutions. They range from narrowing the ever-expanding, and often unwieldy, amount of material that the Crown has been automatically delivering to the defence in terrorism prosecutions to creating a specialized team of terrorism prosecutors led by a new director of terrorism prosecutions.

The entire approach of the report is that for every situation where there is a potential of conflict between the needs of national security and the needs of the trial process, to find a means to minimize that, and where the conflict cannot be avoided, to locate the decision in the proper place, Freiman said.

In that vein the commission has recommended the creation of a beefed-up national security advisor post. One of the advisor's most important duties would be to sort out, in the greater national interest, the wrangling amongst CSIS, the RCMP, and other agencies and departments involved in national security over the sharing of confidential information with each other and the courts. My personal opinion is that having a lawyer in that position would be extremely helpful, said Freiman.

The commission's recommendation that security-cleared special advocates (currently used only in immigration security certificate cases) be appointed in all terrorism prosecutions to challenge warrants, and national security privilege claims, made by the Crown was welcomed by lawyers who do the specialized work.

It's better than what we have now which is nothing there is a vacuum there now, said Leonard Shore of Ottawa's Shore David Hale. Shore, a security-cleared criminal lawyer who was appointed amicus curiae to represent the accused's interests in closed-door evidentiary hearings in R. v. Khawaja, Canada's first terrorism prosecution, said it's got to be better than it is now, because right now it's on an ad hoc basis [that amici are appointed]. Sometimes it happens, and sometimes it may not happen.

Freiman acknowledged that the commission has accepted that SAs, and keeping some information secret on national security grounds, are necessary features of terrorism prosecutions notwithstanding the criticism that SAs are merely a fig leaf to disguise the fundamental unfairness of not fully disclosing the prosecution's case to the accused.

SAs have made a positive difference in security certificate cases, he pointed out. It's a very important tool if we are serious about protecting the integrity of criminal prosecutions.
Gordon Cameron of Ottawa's Blake Cassels & amp; Graydon, an experienced special advocate, agreed. The presence of amici, or special advocates, should not be an excuse to withhold evidence that can be given to a person affected by the proceeding, he said. But once the decision is made that that information is going to be withheld, the special advocates are the best we have got to counterbalance that secrecy.

Cameron said he is open-minded about the proposal to appoint a director of terrorism prosecutions. It is evident to me that [the prosecution] needs centralized management and specialized staffing for this type of work because its specialized work that requires serious training and centralized management to get consistency and quality, he observed.

Criminal lawyer Norm Boxall of Ottawa's Bayne Sellar Boxall, who is also a special advocate, endorsed the commission's recommendation that the Federal Court's present exclusive jurisdiction to decide claims of national security privilege under s. 38 of the Canada Evidence Act be scrapped in favour of allowing superior court trial judges to determine such issues in all criminal cases.

The present system, which delays criminal trials while the Federal Court decides the Crown's claim of that certain relevant information cannot be disclosed to the accused on national security grounds, has been criticized by both national security and criminal procedure experts.

As a trial counsel, the bifurcated process is really difficult and not conclusive to the smooth running of a trial, or a fair trial, Boxall explained.

Claims by the Attorney General of Canada and by RCMP Commissioner William Elliot that provincial superior court judges lack sufficient expertise in dealing with secret information have no merit, says the commission's report.

Boxall told The Lawyers Weekly he disagrees with the recommendation that federal prosecutorial guidelines should be changed to narrow the Crown's current practice of automatically delivering to the accused everything except that which is clearly irrelevant. As defence counsel, I think existing disclosure has to remain, he said. It is important to disclose all material that is not clearly irrelevant.

Boxall, co-counsel with Jacques Shore of Gowlings for the Air India Victims' Families Association, emphasized that the government must act on the recommendations. The report cannot just be shelved. It should not be allowed to gather dust. There needs to be action, he said.

Department of Justice spokesperson Carole Saindon could not comment on what legal reforms the government agrees with, or plans to implement, if any. The recommendations are still under review and so it is not possible to elaborate at this time, she told The Lawyers Weekly.

Major proposes more special advocates, less disclosure

The Report of the Commission of Inquiry into the Investigation of the Bombing of Air India Flight 182, led by retired Supreme Court Justice Jack Major, recommends significant law reforms in the areas of terrorism investigations, prosecutions, and financing. One of the Commission's key focuses is how to better manage the tension between gathering secret intelligence to help protect Canadians' security, and gathering material capable of being used as evidence in terrorism prosecutions.

These are legal highlights from the report's 29 multi-pronged recommendations:

Attorney General of Canada

The Attorney General of Canada should retain, and expand, his or her pivotal role in terrorism prosecutions. Provincial attorneys general should notify the Attorney General of Canada through the proposed new Director of Terrorism Prosecutions of any potential prosecution that may involve a terrorist group or terrorist activity, whether or not the offence is prosecuted as a terrorism offence. The federal attorney general should be prepared to exercise the right under the Security Offences Act to pre-empt, or take over, provincial terrorism prosecutions if it is in the public interest.

National Security Advisor

The role of this Privy Council Office official should be upgraded. Reporting directly to the Prime Minister, the person would help devise national security policy, as well as supervise and co-ordinate national security activities between various agencies and departments. This includes deciding whether to disclose security threat information from CSIS to police agencies and resolving, in the public interest, the persistent skirmishing between the RCMP and the Canadian Security Intelligence Service (CSIS) over information sharing. The National Security Advisor would lead a team of people seconded from agencies with national security responsibilities, such as the RCMP, CSIS, the Department of Foreign Affairs and the Canadian Border Services Agency.

Director of Terrorism Prosecutions

This new senior legal official would be appointed by the Attorney General of Canada and work within the federal Department of Justice, rather than the Public Prosecution Service of Canada.

The DTP would supervise and conduct federal terrorism prosecutions, while also providing legal advice to integrated National Security Enforcement Teams, and to the RCMP and CSIS on their counter-terrorism work. The aim would be to ensure the continuity and consistency of legal advice and representation in terrorism investigations and prosecutions.

CSIS

To the extent practicable, CSIS should conduct its counterterrorism investigations in line with the legal rules of evidence and disclosure so its information can be used in the criminal justice process.

Witness Protection

State-funded counsel should be made available to those considering entry into the RCMP witness protection program, including to help them negotiate protection and compensation agreements.

Special Advocates

Security-cleared special advocates, or SAs, (currently used only in immigration security certificate cases) should be appointed in terrorism prosecutions. Their role would be to represent the accused in challenging warrants issued under s. 21 of the CSIS Act or under Part VI surveillance provisions of the Criminal Code.

SAs could access all relevant confidential information in the Crown's hands, including unedited affidavits used to justify warrants. They could not disclose such information unless authorized to do so by a court.

In the same manner as SAs do now in security certificate cases, they would also protect the interests of accused during closed-door ex parte applications by the Crown under s. 38 of the Canada Evidence Act (CEA) to prevent the disclosure of information that the prosecution argues would harm international relations, national security or national defence.

Privilege

The Federal Court's present exclusive jurisdiction to decide claims of national security privilege under s. 38 of the CEA should be scrapped in favour of allowing superior court trial judges to determine such issues in criminal cases.

Appeals, or reviews, of privilege rulings under ss. 37 and 38 of the CEA should no longer be permitted on an interim basis, i.e. no appeal until after a verdict in the case.

The CEA should also be amended to create an additional national security class privilege for documents prepared for, and the deliberations of, the National Security Advisor and his or her office.

A case-by-case common law privilege, pursuant to the Wigmore criteria, should also be available to protect the identities of CSIS informants when the public interest in confidentiality outweighs the public interest in disclosure.

Disclosure

Electronic and staged disclosure should generally be used to make terrorism prosecutions more manageable. Federal prosecutorial guidelines should be changed to narrow the Crown's current practice of disclosing everything except that which is clearly irrelevant.

Only material which is relevant, and of possible assistance to the accused, should automatically be handed over to the defence. Material which is not clearly relevant (as opposed to being clearly irrelevant) should be made available to the accused for inspection and copying.

The Crown should be able to choose to provide electronic disclosure, but must ensure that the defence has the technical resources needed to use the disclosed electronic data base, including the appropriate software to allow annotation and searching.

The trial judge should have the discretion to order full, or partial, paper disclosure where the interests of justice require. The authority and procedures for electronic disclosure should be set out in the Criminal Code.

Terrorism Trials

The federal government should share the costs of major trials with the provinces to ensure proper project management, victim services, and adequate funding to attract experienced trial counsel capable of making appropriate admissions of fact and otherwise conducting an efficient trial.

Pretrial rulings should not be appealable before trial. The Criminal Code should be amended to ensure that pretrial rulings still apply if a prosecution ends in a mistrial, or is severed into separate prosecutions. Pretrial rulings would only be non-binding in the event of a material change in circumstances. The Code should be amended to permit omnibus hearings of common pre-trial motions in related, but severed, prosecutions. It should also be changed to allow a judge to empanel up to 16 jurors to hear a case. If more than 12 jurors remain when deliberations start, all the jurors will choose the 12 who will decide the case.

Charities, Not-for-Profits and Terrorist Financing

The traditional privacy concerns surrounding income tax information should be reconsidered because the Canada Revenue Agency (CRA) is still barred by the Income Tax Act from disclosing information which is relevant to terrorist financing. Where revocation of charitable status is not justified, the CRA should make full use of intermediate sanctions (e.g. monetary penalties or suspending a charity's power to issue tax receipts for donations) to combat misuse of charitable status.

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Why judges should meet kids more often

Nicholas Bala And Rachel Birnbaum — Fri, 02 Jul 2010 00:00:00 -0400

In most provinces, judges rarely meet children who are the subject of litigation between parents. More judicial interviewing of children would improve decision-making and outcomes for children, and better respect their rights.

Practice discouraged

While legislation and Canadian case law have long recognized that judges have the discretion to meet privately with children who are the subject of a custody or access dispute, the traditional judicial view has been that such direct involvement of children in the family court process should be discouraged.

A central concern of judges is that even listening to children, without their parents present, has the potential to be emotionally traumatic, since the children may have a loyalty conflict or guilt at expressing negative attitudes about a parent. Judges are also concerned that they lack training in interviewing children, and in any event the views expressed by a child may not accurately reflect the child's true feelings.

Many judges also believe that private meetings with a child are inconsistent with the traditional judicial role, and even if parents are told what the child said, such a procedure is not consistent with due process. Judges prefer to have a mental health expert interview the child, and report to the court about the child's preferences, often in the context of a broader assessment. In some jurisdictions, a lawyer may be appointed to represent a child, although there are questions about how far counsel can go in presenting evidence about a child's wishes. Parents or other witnesses may also be permitted to give testimony about a child's state of mind, as an exception to the hearsay rule.

Comparative perspectives

Although uncommon in most Canadian provinces, in a number of jurisdictions, including Quebec, it is increasingly common for judges to meet with children without parents being present. There is a belief that children have the right to meet with the person who will make such an important decision about their lives. Children may benefit from being able to ask questions of the judge and gain information about the court process.

We are presently undertaking a comparative study of attitudes and practices regarding judicial interviewing of children. We started our research in 2009 by surveying judges in Ohio, where the practice is common, and Ontario, where such meetings are rare. All of the surveyed judges in Ohio have regular experience with interviewing children, whose ages ranged from 3 to 17 years of age. Almost all of them consider the practice useful, as a way of getting to know the child better, but they are aware of the limitations of the information gained.

Fewer than half of the Ontario judges had ever interviewed a child, and even judges with experience as children's lawyers expressed concern about their lack of training for undertaking such an activity. It is clear that the culture of the court affects judicial attitudes and practices.

Suggested practice

There are controversial issues about judicial interviews, and especially in Canada, there is a lack of appellate authority or legislation to provide guidance. In Ontario, legislation gives the child the right to have counsel present, and it may be appropriate, if the child has no counsel, for a therapist who has worked with the child to attend. Although parents' counsel may be asked to suggest questions that should be posed to the child, they should not be present.

Ontario legislation specifies that a record is to be kept of the interview. Some judges inform the child that they will be giving the parents a transcript of the interview. Other judges provide the parents a summary of what transpired, but do not provide a verbatim account; in the absence of appellate direction, this seems a preferable practice as it may spare the child needless embarrassment and distress.

Most children don't want to choose between their parents, but they have views that may influence the specific parenting arrangements that are made. While judges (as well as assessors and lawyers) should avoid directly asking children their preferences, children with strong views will inevitably tell their story. The judge should make it clear to the children that they have a voice, not a choice.

Mediators and judges at settlement conferences should also hear from children, as their opinions may help forge an agreement about a parenting plan. In more contentious cases that go to trial, clear rejection of one parent by the child could be an indication of alienation, but might also be a reflection of genuine problems or even abuse.

While high-conflict separations are emotionally traumatic for children, a properly conducted judicial interview with a child who wants to meet the judge is not likely to further traumatize the child. There is some research to suggest that children who feel that they have been heard in the course of parental separations may actually have better outcomes.

Judges will often benefit from meeting with children, though this meeting must never be the sole source of the judge's information about the child. Except for urgent cases, judicial interviews are not replacements for child legal representation or an assessment by a mental health professional, but should be viewed as supplements.

Not all children want to or should be interviewed, but judicial interviews should occur more often than is current practice in Ontario; similarly, arbitrators should arrange to meet children. Training and education would greatly assist decision-makers in conducting these interviews.

The study of how to best involve children in the family justice system is still in its infancy. We are continuing our research, and in particular, are surveying children and young adults who have had experience with the family court process (some having been interviewed by judges and others not) to learn more about their perceptions of what would be the fairest and most effective way to involve children in the process.

Nicholas Bala is a professor of law at Queen's University and Rachel Birnbaum is an associate professor of social work at the University of Western Ontario. They will be presenting results of their SSHRC-funded research on judicial interviewing of children at the National Family Law Program in Victoria on July 15.

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Lawyers benefit from battle over multiple listing service

Christopher Guly — Fri, 02 Jul 2010 00:00:00 -0400

As the federal Competition Bureau battles with the Canadian Real Estate Association (CREA) over the Multiple Listing Service (MLS), lawyers have an opportunity to return as the true quarterback of the sale or purchase of a residential property, according to Ontario lawyer Mike Forcier.

Lawyers could be negotiating the contract and finding out what the client wants from the very beginning. And with the Internet, there's already a huge wealth of information out there on homes for sale. But people need someone to decipher the detailsand who better to do that than a lawyer, who has the specialized knowledge to deal with closings and negotiations, says Forcier, a 53-year-old sole general practitioner in Owen Sound, Ont., who focuses mainly on real estate and family law.

We should embrace this chance, not fear it.

He's certainly doing the former.

Seven years ago, he helped launch Propertyshop.ca, an online service in which residential property owners sell their own real estate while relying on a lawyer to provide the legal work and advice.

Backed by seven lawyers, some of whom nine years ago formed a company called Lawyers Web Property Shop Ltd. that now runs the website, Propertyshop.ca currently has 64 Ontario solo and small-firm lawyersincluding veteran real estate practitioner and Law Society of Upper Canada bencher Bob Aaronwho charge, on average, between one and one-and-a-half per cent of the property sale price to provide advice on such matters as conditions for sale and purchase, zoning, legal title and title insurance, negotiating the Agreement of Purchase and Sale, and conducting legal searches required for opinion on title. Lawyers pay $1,000, plus HST (as of July 1) in Ontario, to join the online service.

Through an agreement with Ottawa real estate agent Joe Williamswhom The Ottawa Citizen recently dubbed the city's most hated realtor for eschewing the standard commissionPropertyshop.ca clients only pay $109 plus HST, unless the buyer has an agent and the commission is negotiated, to have their homes listed on the MLS. The MLS controls about 90 per cent of residential real-estate transactions in Canada. The only additional charge is $380 (plus HST), paid to Propertyshop.ca, which includes a listing on the website, photos and description of the property for sale, and two signs: a large custom-made one for the lawn (with the price listed) and a talking one featuring a three-minute pre-recorded information message on the property which prospective purchasers can obtain by calling a local or toll-free number.

There's also a back end to the site in which lawyers can enter an ID number and obtain the vendor's name, a legal description of the property, download an agreement of purchase and sale, and draft an offer in minutes, adds Forcier.

Based on a $250,000 sale with a one-and-a-half per cent commission, a lawyer with Propertyshop.ca would earn $3,750 rather than the typical $500 to $600 in legal fees.

While the idea of a lawyer charging a fraction of a real estate agent's standard five per cent commission to complete a transaction might seem novel in Canada, Forcier discovered that it's quite common in Scotland where solicitors charge a one to one-and-a-half per cent commission on a property sale with no realtor involvement.

I've never understood why, in a real estate deal, the most important documentthe Agreement of Purchase and Saleis negotiated by a realtor, says Forcier, who characterizes Canada's real estate industry as one of the last great cartels. I think real estate agents overcharge and there's too many of them, he states, adding that unlike the five to six years of training lawyers must complete before practising law, real estate agents only need to complete an eight-to-ten-week course (with the first section dealing with dressing as a professional and how to figure out your commission.)

Most realtors don't like me.

He says that meanwhile, lawyers left to handle the legal work in a transaction do almost nothing.

All we do is a bunch of clerical worktaking information from one form and putting it into another. But we're the ones who have to make everything right.

With a growing number of private deals, lawyers are working harder, and unlike realtors, are not getting paid more. So when people are used to paying five per cent commission to a real estate agent, they will gladly pay one or one-and-a-half per cent to a lawyer.

As lawyers reduced their residential real estate rates over time, Pallett Valo LLP, the Mississauga firm where Ray Mikkola is a partner and head of the commercial real estate law group, opted to not offer legal services for residential real estate transactions.

To do a good job, you need to spend some time, and we decided we couldn't do it at a reduced rate, explains Mikkola, who worries that if other lawyers get more actively involved in listing and selling real estate now, they might lose referrals from realtors for traditional legal work involving a transaction, since lawyers could be seen as competitors. That would hit sole general practitioners in rural and remote communities the hardest.

There is a shortage of lawyers in smaller areas, because it's hard to make ends meet, explains Mikkola, a member of the executive of both the Ontario and Canadian Bar Association's real property sections. One way lawyers pay rent and staff is to have a steady stream of residential real estate transactions.

However, those lawyers could also diversify into selling real estate and benefit if the Competition Bureau is successful in challenging what it has characterized as CREA's anti-competitive rules regarding the MLS, which accounted for $149 billion in sales last yearan amount bigger than Canada's petroleum industry, according to the Vancouver Sun.

Despite amendments made earlier this year to CREA rules that eliminated the requirement of a full-service realtor as part of any MLS listing (CREA still allows Canada's more than 100 local real estate boards the flexibility to set their own rules), the Competition Bureau stated in a March 22 news release that the 99,000-plus-member association continues to deny consumer choice and stifle competition by not removing the existing roadblocks to real estate agents who list properties on the MLS from offering innovative services and pricing options to consumers.

CREA's rules restrict the ability of consumers to choose the real estate services they want, forcing them to pay for services they do not need, said Melanie Aitken, a lawyer who serves as Canada's Competition Commissioner and is a past bencher of the Law Society of Upper Canada. (In a recent interview, she told Bloomberg that Canadians paid $7.5 billion in fees to real estate agents last year.)

On June 30, the Competition Tribunal will hear motions for leave to intervene in Commissioner of Competition v. Canadian Real Estate Association, in which Aitken's office has asked the tribunal to prohibit CREA from directly or indirectly imposing the MLS Restrictions on the use of the MLS and related trademarks when licensing those trademarks to member real estate boards.

The Ottawa-based National FSBO [For Sale By Owner] Network Inc. and lawyer and former licensed real estate agent Lawrence Dale, co-founder of the Toronto discount brokerage, Realtysellers (Ontario) Ltd. (whose operations were suspended in 2006 over access to the MLS system), and who is also part of a $100-million lawsuit against CREA and the Toronto Real Estate Board, are both seeking intervenor status in the case, which is expected to be heard in the fall.

Ultimately, the issue is about giving consumers freedom of choice, says Alan Silverstein, director of legal engagements and new initiatives for Telus's automated software mortgage program, Assyst Real Estate.

There's no question that the MLS belongs to realtors. But people should be able to decide whether they want full or limited service from a real estate agent, says Silverstein, who is certified by the Law Society of Upper Canada as a specialist in real estate law.

The public wants to pay based on getting value for service. But I don't think that a property that sells in 24 hours is worth a five-per-cent commission.

As for lawyers getting more involved in selling homes, Silverstein points out that under s. 5 (1) (g) of the Ontario Real Estate and Business Brokers Act, they're already allowed to trade in real estate (although a lawyer cannot split a commission with a broker on a sale or a purchase). Meantime, Forcier hopes to soon have 200 Ontario lawyers signed up with Propertyshop.ca.

The big difference between real estate agents and sole practitioners is that they are organized by big brandsRE/MAX, Century 21and we're independents, he says.

So we've organized a way to help lawyers cooperatively and give consumers better service at a lower price using a lawyer.

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Cold war breaks out at work

Donalee Moulton — Fri, 02 Jul 2010 00:00:00 -0400

Tempers often rise as air conditioning works overtime to cool law firms across the country. Finding the right temperature, a key element of what experts call thermal comfort, is central to employee satisfaction and the bottom line.

Temperature is one of the most common problems in terms of indoor air quality, said Sandy Bellow, technical specialist with the Canadian Centre for Occupational Health and Safety in Hamilton.

Indeed, said Alan Hedge, a professor of ergonomics at Cornell University in Ithaca, N.Y., this is the major complaint in American offices.

It is a serious issue, he added. It affects the performance of people and how they feel about the environment.

Success depends on understanding the issues and the effects of thermal discomfort. And having realistic goals.
It's difficult to satisfy everybody, noted Bellow. You should be striving to [satisfy] 80 per cent of the people in the workforce. That is generally achievable.

Still, most offices fall far short of attaining this goal, according to a study conducted by the Center for the Built Environment at the University of California in Berkeley, Calif. that included respondents in Canada, the U.S. and Finland. The researchers found that only 11 per cent of respondents expressed satisfaction with their thermal comfort in the 215 buildings surveyed.

In summer, interestingly, satisfaction usually registers on the warmer end of the Celsius scale.

Temperatures in summer were shown to be usually too cold, below the comfort range, surprisingly, and these low temperatures were associated with increases in a number of symptoms among the occupants, said Mark Mendell, a researcher with the Lawrence Berkeley National Laboratory in California.

Mendell and his co-researcher, Anna Mirer, analyzed data collected from 95 air-conditioned office buildings across the U.S. The data, gathered by the U.S. Environmental Protection Agency in a study called BASE (Building Assessment Survey and Evaluation), focused on building-related symptoms. Symptoms included problems with upper and lower respiratory tracts, eyes, and skin as well as headache, fatigue, and difficulty concentrating.

These findings suggest that cooling offices less in summer, so that temperatures are in the comfort range and not too cold, would increase thermal comfort and also decrease symptoms in office workers, said Mendell.

Some people develop sensitivities to components in the air, noted Bellow. Age, activity level within the job, health conditions, and clothing all affect a person's sensitivity to preferences for temperature.

Quite simply, when the air gets too chilly, productivity declines. The research shows that when people experience temperatures they feel comfortable with usually warmer rather than cooler they do more work and spend more time at their desks, said Hedge, who has measured the relationship between temperature and computer keystrokes among employees.

In his article, IAQ [indoor air quality] Effects on Office Productivity, he concluded that, Air temperature affected the quantity of computer work and this was not confounded by employee's gender, job, time-of-day, day-of-week or the sequential day of the study.
There is also little relief to be easily found when individuals in a firm are chilled. In a cool environment, even with a sweater or jacket, the extremities tend to get cold, noted Hedge. That reduces dexterity.

It also raises the level of dissatisfaction. The hottest spots for disagreement are probably shared areas. Issues are mainly experienced in common spaces. The residents of that area will adjust the thermostat to suit their specific comfort levels without considering others sharing the space, said Deborah Davids, manager of office services with Miller Thomson LLP in Toronto.

When an issue arises in shared spaces, she added, the building is able to adjust temperature in the air vents above the specific workstation.

The best option is not one thermostat fits all. A common problem, explained William Fisk a senior staff scientist and department head of the Indoor Environment Department at the Lawrence Berkeley National Laboratory, is use of a single thermostat and hardware system to control the temperature in a large and diverse region of a building. The temperature at the thermostat location may be controlled well, but elsewhere temperatures are substantially different and uncomfortable.

Placement is also an issue, noted Bellow, The location of the thermostat can be problematic. For example, if it is on a south-facing wall that gets a lot of heat during the early part of the day.

More thermostats, where practical, help solve the problem. Installation of thermostats in individual offices contributed greatly to the comfort of the occupants, said Davids.

Occasionally, she added, a humidifier will be provided to enhance comfort.

Davids also recommended that firms have a policy for temperature in common areas, which would be set to industry standards.

In his research, Mendell found that a variety of building-related symptoms such as headache, fatigue, and difficulty concentrating were increased by over 50 per cent in the buildings kept below 23°C. These buildings, kept too cold for comfort in summer, included almost half the buildings measured during the warmer months.

Turning the air conditioning down also has important implications for the environment. When the A/C is running flat out, noted Hedge, you're wasting a huge amount of energy.

One reason the air conditioning proves too chilling for lawyers and other staff: the cooling system is set based on the assumption that the building is full. It's a false assumption. It's seldom the case, noted Hedge. Research indicates only 40 to 50 percent of [employees] are usually there.

Of course, individual lawyers can take steps to help enhance their own comfort. Dress appropriately, said Bellow. Wear long sleeves or go sleeveless if you tend to overheat.

The firm should also monitor temperature woes, she added. Every workplace should have a health and safety committee. They can be gathering information and determining problem areas.

Once determined, of course, action is required. It's important that people running the firm listen to their employees, stressed Hedge.
When those employees are neither shivering nor sweating, they'll be working at peak performance and they will think more positively about the firm. In the end, said Hedge, you'll have happier employees.

Is your building giving you chills?

Many of the problems with law firms that are too hot or too cold for the comfort of staff are directly tied to the buildings themselves.
Old age, and the best of intentions, can be an issue. Many problems can stem from the design of the building and maintenance of the heating and ventilation system, noted Sandy Bellow, technical specialist with the Canadian Centre for Occupational Health and Safety in Hamilton.

For example, she pointed out, buildings constructed in the '70s during the energy crisis are 'tight.' Some of the designs strove to have as little fresh air coming in as possible.

The flip side of keeping fresh air out, of course, is keeping colder (or hotter) air in.

To improve temperature control we need better building design, improved hardware, and improved operation and maintenance practices, said William Fisk, senior staff scientist with the Lawrence Berkeley National Laboratory. We know how to do a better job, but there are costs that are probably the main constraint.

However, he added, the economic benefits of even very small improvements in productivity would far exceed the costs.

By the numbers

80 %
You can't satisfy everyone, but aim to satisfy 80 per cent of employees with your office temperatures, say experts.

11 %
A recent study found that only 11 per cent of respondents expressed satisfaction with their thermal comfort in the 215 buildings surveyed.

23°C
Research has found that a variety of building-related symptoms such as headache, fatigue, and difficulty concentrating were increased by over 50 per cent in buildings kept below 23°C.

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The ins and outs of law firm mergers

Geoff Kirbyson — Fri, 02 Jul 2010 00:00:00 -0400

When Don Douglas began his due diligence on what would become his firm's first merger in more than a decade, he started deep in his own memory banks.

The CEO of Winnipeg-based Thompson Dorfman Sweatman LLP (TDS) went to law school at the University of Manitoba (U of M) with David Perlov, the managing partner of Perlov Stewart LLP, also of Winnipeg, back in the early 1970s.

They hit it off immediately when they found themselves on the opposite ends of a moot court case.

We prepared the documents and argued the case in the Law Courts building. We worked hard on that case for a couple of months and talked about it while we were preparing for it and afterwards, too, Douglas says. We had a class of 130 people but that particular occasion resulted in my having a friendship for David, an affection for him and a respect for his abilities.

Fast forward nearly 40 years and the seeds that were sown so long ago started to sprout after Perlov called Douglas this past winter seeking advice from a lawyer with significant experience in real estate financing. Douglas put him in touch with Rick Adams, one of TDS's stable of about 70 lawyers, who came in on a weekend to lend Perlov a hand. When Adams got back to his own office the next week, he mentioned the possibility of bringing Perlov's four-lawyer firm into the TDS fold.

I gave David a call and it became apparent early on that there didn't seem to be a reason why we wouldn't merge the two operations, Douglas says. We had space available and we'd like to have as many lawyers as we can. The more lawyers, the more economic the operation becomes, as long as people are in cultural harmony.

The merger, which became official at the beginning of June, boosts the lawyer count at TDS to about 75 but Douglas says he's not done yet. He'd like to bring in another eight or nine lawyers over the next couple of years. He says lawyers who want nothing to do with administration matters don't have to give it a second thought at his firm.

One of the attractions we paint at TDS is you can walk in the door in the morning and practice law until the minute you leave, he says.

Perlov, who started his own firm 35 years ago along with Allan Stewart, another U of M classmate because he wanted to be his own boss, says he was finding the management side of things to be onerous.

(The TDS possibility) gave me a certain comfort level. By not having to deal with administrative matters, I could deal more with my clients instead. At this stage of the game, I found that attractive. Knowing the quality of Thompson Dorfman Sweatman from a reputation, service and administrative point of view, it became a fairly easy decision, he says.

Perlov says moving another one of the firm's three partners into the managing partner role wasn't really considered.

People fall into slots in terms of what they like to do and most lawyers aren't geared to the management of a firm. They prefer to do their work, he says.

The move also enabled TDS to re-establish a family law practice with the addition of Perlov Stewart's Gerald Ashcroft. TDS had been dormant in that area since the early part of the decade.

In the intervening years, it occurred to me that we probably should have a good family law lawyer working for us. It provides a dimension to the practice that, upon reflection, we should have had, Douglas says.

The other lawyers at Perlov Stewart, which also included Peter Sim, specialized in the business and personal needs of their clients.

The TDS-Perlov Stewart merger wasn't the only one to be consummated recently. New Brunswick-based Clark Drummie just announced plans for its eight lawyers to join the Saint John operations of McInnes Cooper. The move will boost the office to 62 lawyers and McInnes Cooper's total in Atlantic Canada to 210.

Our clients will benefit from McInnes Cooper's regional reach and our lawyers will benefit from the strength and support of a growing regional business law firm, says Willard Jenkins, Clark Drummie's managing partner. We will continue to service our clients seamlessly, with the attention and quality they have come to expect now with support in additional areas wherever needed.

Ian Holloway, dean of law at the University of Western Ontario, says the dominant business model in Canada is firms of 10 lawyers or less. Yet, law schools fail their students by not teaching them enough about the business side of the profession, he says.

The problem we face is lawyers, on the whole, are lousy business people, he says. We don't give students the business strategy. We teach them the law when the skills most of them will need to succeed as lawyers are business skills.

Holloway says many of today's smaller firms are graying but they're reluctant to bring in fresh blood.

They think, 'this kid's going to steal my work,' rather than thinking of it as an opportunity, 'this kid is my pension plan.' That's a function of a lack of business acumen, he says.

There will always be a role for smaller firms in the marketplace but they'll be in tough if their niche is servicing the business community, says Bruce King, managing partner of Winnipeg-based Pitblado LLP.

I think they'll find increasingly that they need broader resources of a somewhat larger firm in order to properly address their clients' needs. Law continues to become increasingly more sophisticated and even small businesses need a broader spectrum of specialized legal services for them to be properly served, whether it's tax planning, labour and employment advice or privacy advice. Those are all areas of law that every business owner needs help with, King says.

Holloway says he doesn't anticipate a rash of law firm mergers in the short to medium term because the pace of consolidation has slowed down around the globe.

We tend to be followers in Canada. What we may see, though, is mergers of opportunities cases where a small firm with a plum practice area will be picked up by a big firm that wants to pick up that practice area, he says.

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Supreme Court of Canada expands administrative boards' Charter powers

Cristin Schmitz — Fri, 25 Jun 2010 00:00:00 -0400

In a landmark 90 decision, the Supreme Court has revised the framework for analyzing when administrative boards and tribunals can resolve constitutional issues, including granting Charter remedies.

Justice Rosalie Abella's June 11 ruling in R. v. Conway is a must-read for administrative law practitioners because its effect may be to extend Charter powers to a significant, but as yet unknown, number of administrative boards and tribunals which currently claim they don't (or have been held by courts not to) have jurisdiction to resolve constitutional issues, including granting Charter remedies.

In the wake of Conway, there is a strong presumption that tribunals can apply the Charter and issue Charter remedies nevertheless legislatures can still specifically reject such jurisdiction, suggests University of Toronto law professor Kent Roach, co-counsel for the intervener Criminal Lawyers' Association.

Notably, Conway scraps the three-pronged Mills test in favour of a more streamlined litmus test for discerning whether a board or tribunal is generally a court of competent jurisdiction to grant remedies under s. 24(1) of the Charter.

It liberalizes it, opines David Mossop, counsel for the intervener Community Legal Assistance Society of Vancouver.

Toronto's Marlys Edwardh told The Lawyers Weekly the decision will enable people to use the Charter to obtain remedies from administrative boards and tribunals that are not expressly barred by the relevant statutory schemes.

It will open up Charter relief in many kinds of administrative tribunals which have not had it, or not exercised it, predicted Edwardh, counsel for Paul Conway, the appellant who unsuccessfully sought Charter remedies from the Ontario Review Board.

Whatever its future fallout, Conway certainly is a clear and succinct primer on the past 25 years of intense judicial debate at the Supreme Court about the scope of Charter jurisdiction of administrative boards and tribunals.

Remarkably, that debate seems to be over for now. Speaking with one voice, all the judges endorsed Justice Abella's merger of the major strands of the court's administrative law jurisprudence emanating from three lines of cases: Mills v. The Queen, [1986] 1 S.C.R. 863; Slaight Communications v. Davidson, [1989] 1 S.C.R. 1038; and Cuddy Chicks Ltd. v. OLRB, [1991] 2 S.C.R.

A merger of the three distinct constitutional streams flowing from this court's administrative law jurisprudence calls for a new approach that consolidates this court's gradual expansion of the scope of the Charter and its relationship with administrative tribunals, Justice Abella explained.

The jurisprudential evolution has resulted in this court's acceptance not only of the proposition that expert tribunals should play a primary role in the determination of Charter issues falling within their specialized jurisdiction, but also that in exercising their statutory discretion, they must comply with the Charter.

In a nutshell, the Supreme Court ruled that administrative tribunals with explicit, or implied, authority to decide questions of law and whose Charter jurisdiction has not been clearly withdrawn by Parliament or the legislatures are courts of competent jurisdiction to apply the Charter to matters within the proper exercise of their statutory functions.

The availability of an appeal from a board's decision on a question of law is indicative of the board's power to decide legal questions, the court elaborated.

Notably, the court also ruled that whether a particular board or tribunal is competent, as a general matter, to grant remedies under s. 24(1) of the Charter is something to be decided once. It is no longer a matter to be determined (potentially differently) each time a different Charter remedy is sought.

Counsel told The Lawyers Weekly the court's new approach means many more boards and tribunals than was previously thought may be clothed with general Charter jurisdiction.

However it is too early to say whether more Charter remedies will actually be granted by boards and tribunals because Charter claimants still have to clear the hurdle of proving that the constitutional remedies they seek are, in the words of the Supreme Court, the kinds of remedies that [legislators]anticipated would fit within the [board or tribunal's] statutory scheme.

The Supreme Court dismissed the appeal of Conway, a man physically and sexually abused as a child by close relatives who has been held in secure mental health facilities since 1984 when he was found not guilty by reason of insanity of repeatedly raping his aunt. The Supreme Court affirmed that the Ontario Review Board, which annually reviews the status of detainees found not criminally responsible, could not give Conway, who remains a serious threat to public safety, the absolute discharge and treatment remedies he sought under s. 24(1) of the Charter. The court said Parliament made clear in the Criminal Code that absolute discharges are not available to dangerous detainees. The Code expressly prohibits the board from prescribing or imposing treatment.

Although the board may not grant those two remedies, which are barred under its statutory scheme, the Supreme Court ruled that the board is generally a court of competent jurisdiction under s. 24(1) and may therefore grant Charter remedies that are consistent with its statutory mandate. The Supreme Court rejected the board's position that it did not have general Charter jurisdiction.

We feel it's a victory, Edwardh said. It will add a significant amount to both the discretion the board exercises, and what values inform it. I also think it will add a great deal in terms of remedial tools to the board if they are confronted with something that can't be dealt with in the ordinary dispositions they make, and that needs additional jurisdiction, which can be the Charter jurisdiction.

By way of example, she cited a patient-detainee who might want to participate in certain religious activities, or read certain materials that are barred by hospital authorities.

She added that under the Conway analytical scheme some boards, such as the National Parole Board, may be found in future to have Charter jurisdiction, notwithstanding previous court decisions to the contrary.

Counsel for the Ontario Review Board, Stephen Moreau of Toronto's Cavalluzzo Hayes, said the ruling certainly means that all provincial review boards have Charter jurisdiction.

He suggested all boards which do not have express powers to decide questions of law and who may historically have felt that their only role was to apply the law and not decide questions of law should carefully review the decision. The potentially new aspect of this case, he said, could be seen to be that the court is signaling, with more fervour than ever, that every one of the justices of that court believes that tribunals should be dealing with Charter issues, absent express provision saying they shouldn't. But I don't agree that this decision is somehow a major retelling of the Charter story.

Mossop noted that British Columbia's Administrative Tribunals Act expressly bars some tribunals, such as dispute resolution offices under the Residential Tenancies Act and the Employment and Assistance Appeal Tribunal (which hears welfare appeals) from hearing Charter issues.

He predicted Conway will spur further litigation up to the Supreme Court about the breadth of boards' Charter powers (for example, do review boards ordering conditional discharges for not-criminally responsible detainees have the power to order governments to supply community housing?). Another issue is the standard of review to be applied to tribunals' findings in constitutional cases.

Simon Fothergill, counsel for the intervener Attorney General of Canada told The Lawyers Weekly it remains to be seen whether this results in more tribunals being found to be courts of competent jurisdiction to grant Charter remedies.

He added, while the court has clearly modified the Mills test, the branch of the test that has usually been determinative of whether an administrative tribunal has jurisdiction to grant Charter remedies appears to remain, i.e., whether the tribunal can grant the particular remedy sought, given the relevant statutory scheme. In the words of the court, 'on this approach, what will always be at issue is whether the remedy sought is the kind of remedy that the legislature intended would fit within the statutory framework of the particular tribunal.'

Fothergill also highlighted the court's observation that tribunals can vindicate claimants' Charter rights by exercising their regular statutory powers and processes in accord with Charter values, without turning to their Charter jurisdiction.

Roach agreed the decision tells tribunals they need not invoke [s.] 24(1) if they can exercise their statutory jurisdiction in accordance with the Charter.

He suggested the decision rationalizes previous decisions, but is not revolutionary. It boils down the separate tests for remedies under s. 24 of the Charter and s. 52 of the Constitution to a holistic question of whether a tribunal can apply the Charter, and rejects the necessity of establishing jurisdiction on a remedy-by-remedy basis.

The court propounded tests for determining (1) whether a tribunal has jurisdiction under s. 24(1) of the Charter to apply the Charter (i.e. whether it can grant Charter remedies generally) and if so (2) whether the tribunal is empowered to give the particular remedy requested in light of its statutory scheme.

At step one a board or tribunal will be found to be a court of competent jurisdiction capable of granting Charter remedies in relation to Charter issues arising from its discharge of its statutory mandate if it has explicit, or implied, jurisdiction to decide questions of law, unless it is clearly demonstrated that the legislature intended to exclude the Charter from the tribunal's jurisdiction.

Once a tribunal is found to be a court of competent jurisdiction, the second question becomes whether the tribunal's statutory scheme enables it to grant the particular remedy sought.

Answering this question is necessarily an exercise in discerning legislative intent, namely whether the remedy sought is the kind of remedy that the legislature intended would fit within the statutory framework of the particular tribunal. Relevant considerations include the tribunal's statutory mandate and function, Justice Abella explained.

She said this new approach which she described as a merger of existing jurisprudence had the benefit of attributing Charter jurisdiction to a tribunal as an institution, rather than requiring Charter claimants to re-litigate, remedy by remedy, whether a tribunal is a court of competent jurisdiction.

In so ruling, the top court appears to have dropped the established Mills test, which stipulates that in order for a tribunal to qualify as a court of competent jurisdiction under s. 24(1) of the Charter, the board must possess (1) jurisdiction over the person; (2) jurisdiction over the subject matter; and (3) jurisdiction over the remedy.

R. v. Conway, [2010] S.C.J. No. 22.

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Nova Scotia triples auto insurance cap

Dean Jobb — Fri, 25 Jun 2010 00:00:00 -0400

Nova Scotia's New Democratic government has tripled the cap on insurance claims for minor injuries suffered in auto accidents to $7,500 while giving more victims the right to sue for higher damages.

The changes, announced April 28, will be fully implemented on July 1. They overhaul a seven-year-old auto insurance regime that recently withstood a constitutional challenge but personal injury lawyers contend was unfair to victims caught by a broad definition of minor injury.

It's a move in the right direction, so I applaud the government for advancing the rights of accident victims in Nova Scotia, says Barry Mason, one of the lawyers who lobbied to reverse injury-claim limits the previous Conservative government imposed in 2003.

It was less than what we hoped for, but better than the system that was in place, Mason, who practises with the Presse Mason Law Office in Bedford, told The Lawyers Weekly. I think it will allow a greater number of accident victims to be able to be compensated beyond cap damages.

In announcing the changes, Finance Minister Graham Steele said the government hopes the new regulations will ensure both fair compensation for accident victims and affordable, stable premiums for all of Nova Scotia's drivers.

A key changebesides increasing the minor-injury cap and indexing it to inflationis the adoption of Alberta's definition of a minor injury as a strain, sprain or whiplash-associated injury that leaves no long-term impairment or pain. Under the old definition, an injury that left no permanent serious disfigurement, no serious impairment of an important bodily function or resolved itself within a year of the accident was considered minor.

The old cap covered every type of injury, says Mason. You could have a broken bone, you could have nerve damage, you could have brain damageas long as the injury was 'resolved' within 12 months.

It's essentially giving a proper definition to a minor injury and it's certainly more in line with what most people would understand the term to mean, added Janus Siebrits of Halifax's MacGillivray Law Office. The previous definition was extremely restrictive and could theoreticallyor in factcapture very serious injuries.

Siebrits and Mason were involved in challenges to the old cap and its definitions as discriminatory under s. 15 of the Charter. The Nova Scotia Court of Appeal rejected the challenges last year and the Supreme Court of Canada turned down an application for leave to appeal on May 27 (Gionet v. Nova Scotia (Attorney General), [2010] S.C.C.A. No. 63).

The new definitions and cap apply to injuries suffered after April 28 but the government declined to make the changes retroactive. Coupled with the failure of the constitutional challenge, Mason says this means thousands of victims have been caught by the incredibly unfair $2,500 cap.

Many of those cases will now head to trial, Mason says, where the new battleground will be the exact meaning of the old regime's restrictive definitions of minor injury. We still don't really know how the (old) cap is going to be interpreted.

The government released a consultant's report that predicted insurers will pay an additional $7 million to settle claims under the new regulations, and would have paid an extra $69 million if the changes had been made retroactive to 2003.

Mason, pointing to evidence heard during the constitutional challenge, claims insurance companies made an additional $250 million between 2003 and 2007 alone and could have absorbed the cost of retroactive changes. There was a real business case to be made that the changes could have been made retroactive without causing any increase in insurance premiums in Nova Scotia.

The Insurance Bureau of Canada (IBC) issued a statement saying the new regulations will increase claim costs, but it's too early to predict if premiums will increase. An effective auto insurance system must maintain a balance between benefits and stable premiums, said Bill Adams, IBC's vice president Atlantic. The government has changed that balance to provide more benefits.

Mason also welcomed amendments that relieve accident victims of the burden of proving their injuries are serious. That can be a heavy burdenthe government has eliminated that provision, so now it's our view that the burden would rest on the insurance company or the defendant to prove that an accident victim's injury was minor, not on the accident victim having to disprove it.

The Nova Scotia government will also explore the possibility of providing optional full-tort coverage, which Mason says is only available in Saskatchewan. It would give drivers the option of buying expanded coverage and avoiding the minor-injury cap completely, if they pay a higher premium.

It sounds good but it may not benefit many people, says Mason, noting that few people opt for the additional coverage and insurance companies could price it out of existence.

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Intimate relations in nursing homes

Donalee Moulton — Fri, 25 Jun 2010 00:00:00 -0400

Sex is not only for the young. For older individuals living in nursing homes and other long-term-care facilities, the expression of intimacy raises important, and often unique, issues. It must be appropriate, respectfuland legal.

Things are becoming a lot more complex. Services are being provided to more people with cognitive impairment and increasing physical needs. We need to be careful about the assumptions we make, said Charmaine Spencer, a lawyer and research associate with the Gerontology Research Centre at Simon Fraser University in Vancouver.

Many of those assumptions are related to competency. Fundamentally, for someone to engage in intimate sexual relations, there must be consent, said Judith Wahl, a lawyer and executive director of the Advocacy Centre for the Elderly in Toronto.

If a person has some degree of dementia, she noted, it does not mean they are not competent or not competent all the time.

Consent is compounded by questions of competency and accepted patterns of behaviour. For example, noted Spencer, who is also an adjunct professor in the Department of Gerontology at Simon Fraser, take the situation of a resident who is cognitively impaired and having sex with her spouse, who lives in the community. There is a question about the ability to consent.

There are consent issuesand cultural expectations, she noted, stressing that, Children cannot consent. It will still be an assault.

Not that long ago, the issue of intimacy among long-term-care residents was not an issue at all. We're very good at meeting the physical needs, spiritual and recreational [needs]. Traditionally, we haven't been good at responding to [resident's] sexual needs, said John O'Keefe, a senior social worker at Northwoodcare Inc. in Halifax, which provides a range of living accommodations for seniors and others.

At one time, he added, we tried to keep people apart. Now we have evolved to the point where we try to support consenting adults.

One indication of that support is the development of guidelines around the expression of intimacy. Such guidelines, said Wahl, are important. Long-term-care homes are people's homes. It should be a normalized environment.

The acuity of needs of people is increasing. A lot more people are not capable, she added. Staff needs to address this in an appropriate way.

In the absence of guidelines, there is often no uniform direction for staff and only personal reactions, noted Spencer. There really is a strong need for guidelines. Otherwise people are trying to address these on an ad hoc basis and personal values really kick in.

O'Keefe developed such guidelines for Northwood a decade ago. They include guidance on distinguishing between appropriate and inappropriate sexual and intimate behaviour; on dealing with residents who are cognitively awareand those who are not; and on inappropriate intimate behaviour directed toward staff themselves.

Duty of care is a critical legal issue, said Wahl, past chair of the CBA National Elder Law Section. The home has a responsibility. These are people's homes. These are adults. There is a spectrum from allowing no [sexual] relations to having restrictions.

There is a classic balance between providing protection and supporting independence, noted O'Keefe.

A new study from the U.S., for example, has found that 17 per cent of new HIV infections occur among people over the age of 50. By 2015, the report concluded, over half of people living with HIV will be 50 years of age or older.

In addition, Growing older with the epidemic: Aging and HIV found that, Currently, older adults experience a near total lack of attention to their sexual health from health care professionals and broad assumptions that they are not sexually active. Medical professionals are hesitant to talk with older adults about sexual health thereby putting at risk the health of older [individuals].

In some cases, the values inherent in a facility's guidelinesor their practical expressionmay conflict with the wishes of the resident's family. O'Keefe stressed that the key is providing direction for those who work with residents. That direction also encompasses the resident's family.

They need to understand we are a community that tries to nurture expressions of intimacy. Often you get family members who have very strong views, said O'Keefe, who recently presented on this topic (along with Wahl) at a Canadian Bar Association, Nova Scotia Branch, conference on elder law in the next decade.

Wahl strongly recommends that residents, their families and staff discuss the issues related to expressions of intimacy. The sexual discussion has to come out of the closet, she said. People do need to have a full life. We have to be sensitive to people's needs.

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Fashion at the office

Donalee Moulton — Fri, 25 Jun 2010 00:00:00 -0400

All too often, when the sun comes out, the clothes come off. For law firms, their lawyers and their clients, less can mean more: more negative reactions, more concern about the quality of the advice, and more overall discomfort.

Everyone can be tempted to dress more casually when the mercury rises, said John Ohnjec, a lawyer and division director with Robert Half Legal in Ottawa. This is true for a variety of professions and industries. However, for those within the legal field, they must remember that there is an even higher standard expected of their profession. Individuals need to represent their firm or corporation's brand image and ensure that they remain polished and professional.

In a professional services environment, you are trying to maintain a professional image, said Mary Jackson, chief officer of legal personnel and professional development with Blake, Cassels & amp; Graydon LLP in Toronto.

On the other hand, she noted, there are times when casual wear makes sense.

The change of season brings with it both higher temperatures and more relaxed attitudes. Lawyers need to be careful they don't get too comfortable with the lazy hazy crazy days of summer. Summer does present challenges for both men and women, said Pat Ross Woodford, a former stylist in London, England, who now lives in Beaver Bank, N.S. Lawyers need to remember that they still need to look professional while trying to keep cool.

Ultimately, said Chris Hornberger, a partner with Halifax Global, a management consulting firm based in Nova Scotia, you should dress like your client dresses or a notch above. Your client will set the tone for what is appropriate.

The greatest challenges, and choices, are faced by women. For men who are lawyers, there may be the tightest restrictions, said Jackson. For women, there are more options, but there is also more opportunity for mistakes.

For women, those mistakes include sandals, bare legs, and clothing that is too tight, too short or exposes too much skin, said Ross Woodford. Clothing should be made of natural fibres with just enough man-made fibre to keep items from wrinkling.

Never wear anything that is too tight, she added. You should be able to swing a skirt around your hips without it pulling up or creasing but not be baggy looking. It's a good test to ensure that you are buying the right size.

Another no-no is cleavage, stressed Hornberger. There is no occasion in the office when it's appropriate to expose your cleavage. Rest assured, people notice and the attention is not positive.

Which is not to say, of course, that lawyers cannot be fashionable in summer clothes. They just need to be aware of their appearance. As the weather warms up, it's only natural to dress lighter to keep cool but many laid-back, breezy clothes are not office-appropriate, said Ohnjec. Employees should try to look polished and professional at all times, even when dressed casually. That means tucking in shirts, wearing pressed clothing, and following the attire guidelines your firm or corporation has established.

Also pay attention to footwear, he said. A lot of sandals or casual shoes may look great after hours but are not appropriate for a legal work environment. If you have to ask yourself whether something is appropriate to wear to the office, chances are it isn't.

Common sense is the best barometer, said Jackson. Short shorts probably don't lend themselves to the workplace. Neither do flip-flops. If it tends toward beach wear, it's likely inappropriate.

Men's attire will be well suited for summer. Men should wear lightweight suits in neutral colours, and keep light colours for days when you will be in the office catching up, said Ross Woodford. Darker colours present a more authoritative look and are best worn when important meetings are scheduled. A crisp white or lightly coloured shirt and tie are necessary at all times.

What is never acceptable, she noted, are frayed collars or cuffs, rings around the collar, neckties not properly knotted, and scruffy shoes.

Many firms have a casual day for lawyers and staff, a time to loosen the pant strings a little. Sometimes it is a little too much.

Lawyers need to understand what the firm means by casual wear, and they need to appreciate that clients expect professionalism regardless of whether it's casual Friday or manic Monday, said Hornberger.

How a lawyer looks not only says something about them as an individual, she added, it says something important about the firm.

Just because a firm has a dress-down day doesn't mean lawyers can show up in track suits and torn jeans, said Ross Woodford. Men should wear casual chinos that are crisp and properly pressed. This should be worn with a casual shirt and blazer. Women could also wear casual chinos, but no jeans, a t-shirt and a blazer or a nice sweater.

The best-dressed lawyers may well be those who anticipate what they'll need to wear in a variety of situations. During the summer months, it's smart to dress in layers. You can take off a suit jacket if it's warm and still have the option to put it on if you have an unexpected meeting, said Ohnjec.

Keeping an additional collared shirt or tie in your office can also be a good plan, he added. Remember to plan ahead. Always maintain your professionalism by upping your attire a notch or two if you know you are going to be meeting with a client that day or have an offsite meeting.

While fashion choices are too numerous to count, dressing well comes down to one thing. In the end, clothing like everything else is about judgment, said Jackson.

When you're dealing with the public, people want to feel comfortable with your judgment, she noted. Whether we like it or not, people have an impression of us in the first few minutes.

Dress codes: Necessity or needless policies?

When the weather gets warm, the fashionistas in the firm get reckless. Sometimes, office attire is entirely inappropriate. In anticipation of those times, many firms have a dress policy.

It's essential, said Pat Ross Woodford, a former stylist in London, England, who now lives in Beaver Bank, N.S. Firms should have a definite dress code. This should be discussed during interviews and held to the highest standard.

With summer approaching, now is a good time to remind employees of your dress code, noted John Ohnjec, a lawyer and division director with Robert Half Legal in Ottawa.

Companies need to be diligent about enforcing the dress code, he added. If one employee gets away with ignoring the dress code, two things could happen: others will soon follow or they'll resent the employee for breaking the rules and getting away with it. It's best to address the issue immediately to avoid any escalation either way.

Mary Jackson, chief officer of legal personnel and professional development with Blake, Cassels & amp; Graydon LLP in Toronto doesn't feel that dress code policies are all that helpful, but she agrees lawyers who step outside acceptable standards need to be dealt with. Rather than prescribe specific clothing, she said, you need to talk to people as individuals when they make mistakes.

What's hot this summer

Summertime fashion is fun yet professional. Be Envied, a designer clothing outlet in Pueblo, Colo., and internet retail store, points to two top trends for women. First, there are flowers everywhere. Pick your favorite blooms on dresses or skirts. Those cool summer fashion clothes are the hit this hot, hot summer season, said owner Anne Niccoli. I recommend adding fashion accessories that fit your personality.

The second trend sweeping stores is high-waist fashion. High waist is in, whether tulip skirts, balloon skirts, shorts, and pants, the high-waist fad is looking brilliant to all the ladies of style, said Niccoli.

For men, this summer exemplifies a shift from the skinny boy suit to one with a little more atten-hut [a military term meaning come to attention], wrote Daniel Dykes on fashionising.com. Think of a cut that... would appeal to a military officer, he said, one that accents a sense of the masculine through three key silhouette elements: broad shoulders, a slim waist, and slim trousers.

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Get on headhunters' radar

Warren Smith — Fri, 25 Jun 2010 00:00:00 -0400

Perhaps the single most common question a recruiter faces when making a headhunt call is how did you get my name? While the exact answer will vary from lawyer to lawyer, recruiters spend a great deal of time researching their market to seek out the best possible candidates for their clients. So what is it, exactly, that puts a lawyer on our radar? Here are a few common traits standout lawyers exhibit which draw the attention of recruiters (and clients) alike. We in the industry refer to them as the 4 P's:

Profile
You have to be known to be found. This is not to suggest only high profile rainmaker lawyers establish themselves on a recruiter's radar; profile can be established in the market through a variety of different activities. Reputation for excellence, a specialized knowledge base, or unique market connections are all facets a recruiter considers when determining a lawyer's market profile. Personally, I also look for a lawyer's profile outside the legal market; this tells me a great deal about that lawyer's client reputation, which is often of even greater interest to a firm seeking to acquire talent in the marketplace. The key here is to understand how best to build your profile in a manner which plays to your personality strengths.

Publish
Publishing remains a critical component of establishing your credentials in the market, as it helps reinforce your market strengths in a public forum. The key to effective publishing is to determine the forum that best suits your talents and strengths as a lawyer, and then incorporate publishing efforts into your daily activities. Publishing can take the form of an article in a peer reviewed journal, writing a mainstream news article, or establishing credentials with key journalists as one of their go-to quotable sources on issues related to your area of practice. Social media is a real option as well; an effective blog or Twitter account can quickly and significantly augment your publication credentials in the market. The benefit with published material is it persists in the market (and on the Internet) beyond the original presentation, making it easier for both recruiters and clients to find you down the road.

Present
Public presentation, whether at forums, roundtables, client seminars, or continuing legal education (CLE) events remains one of the great ways to showcase your knowledge in an interactive environment. Done consistently, presenting reinforces a market impression of an expert status in your chosen field. Clients, perhaps even more so than recruiters, will often use this to assess potential counsel beyond the initial personal referral/introduction. Similarly, recruiters monitor events and seminars for key and emerging legal personalities. This helps us stay abreast of rising talent and leading lawyers for future headhunting opportunities.

Plan
Perhaps the most important key to getting the headhunter to call is the same used to build a successful (and enjoyable) practice: successfully implement your business plan. Understanding your personal strengths, and building a plan to showcase them in the market remains a universal theme amongst all lawyers who recruiters and clients consistently seek out. While it is a given that all leading lawyers must first be good lawyers, it is not enough to rely solely on your knowledge of the law to build a successful practice in today's market.

While the temptation may be to toil away at your desk, working solely on matters for other partners or a select few clients at the firm, this may limit your opportunities for growth down the road, whether at your firm or in the market generally. Recruiters make a career out of tracking talent in the market; if we don't know who you are or where to find you, odds are potential clients or future employers won't either.

Warren Smith is a Managing Director with The Counsel Network, Canada's oldest and most respected lawyer recruitment and career consulting firm. He is also the only Canadian elected to the Board of Directors for the National Association of Legal Search Consultants (NALSC), North America's leading legal recruitment industry association.

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Class action contends lawyers' copyright infringed by commercial database

Cristin Schmitz — Fri, 18 Jun 2010 00:00:00 -0400

Do lawyers enjoy copyright in the facta, pleadings, motions and affidavits they file in open court and, if so, can their works be reproduced via a commercial on-line database, without permission or compensation?

Those are some questions recently raised by a novel $51-million class action for alleged mass copyright infringement that was filed in Ontario Superior Court last month against legal publishing giant Thomson Reuters Corp. and Thomson Reuters Canada Ltd., by prominent immigration lawyer Lorne Waldman.

The Toronto lawyer contends that the defendants' Westlaw Litigator service is infringing his copyright, and that of hundreds, if not thousands, of other lawyers by reproducing (in PDF, Microsoft Word and other downloadable formats), and making available on-line for a fee, more than 50,000 pleadings, court motions and facta the defendants recently copied from civil court files across Canada.

The defendants have created a service whose sole purpose is to carry out mass copyright infringement for their own financial profit, Waldman alleges in a May 25, 2010 statement of claim whose allegations are disputed by Thomson Reuters.

Argues Waldman, in addition to asserting that they own copyright in legal documents they did not create, the defendants seek to trade on the name and reputation of the lawyer and /or firm who actually drafted the document by showing (and permitting searching by) lawyers and firm names.

Of course none of the lawsuit's allegations have been proven in court. Absent settlement, the case is also likely to take years to be determined on the merits, beginning with skirmishes over class certification.

Waldman's counsel Louis Sokolov and Jordan Goldblatt of Toronto's Sack Goldblatt Mitchell told The Lawyers Weekly the lawsuit breaks new ground in Canada. They said they did not know of any similar case having been decided by a court elsewhere in the common law world.

(In the U.S., the question of whether digitizing copyrighted material into a searchable database is sufficiently transformative to qualify as a non-infringing fair use under American copyright law was recently raised but not decided in a class action against Google for its controversial project to scan and create a searchable online database of millions of books.)
Waldman, in addition to demanding general damages of $50 million (or alternatively, statutory damages under the Copyright Act) and punitive damages of $1 million, is asking the Superior Court to enjoin Thomson Reuters permanently from dealing in any way with the documents authored by the class members; to enjoin further copying of court documents without consent of the authors; and to compel the defendants to disgorge any profit reaped from the alleged mass infringement.

He also requests that a class action be certified and that he be appointed as the representative plaintiff.

Sokolov acknowledges anybody can go to the court file and get a copy of a document and use it as a basis for their research or work. That's fair.

But he argues the difference of course is if you go to a court file and make a copy, the court isn't making a profit off a lawyer's work. The court is providing it as a public service. But it's a material difference to take tens of thousands of documents and offer them for sale, on a bulk basis, without any compensation, or indeed any permission, from the people who wrote them.

The nature of the copying, the nature of the publication, and the nature of the profit-making from it, puts it in a different category altogether, and we think that that's what makes this matter actionable.

Goldblatt adds on top of that there is also the fact that the documents are transformed into a format where they can be downloaded, and directly copied from [via cut and paste, for example]. So it goes above and beyond research, to where it can be used as the very basis for another draft of the document.

Counsel for Thomson Reuters, Wendy Matheson of Toronto's Torys, told The Lawyers Weekly her clients dispute the plaintiff's allegations and are defending the action.

The Copyright Act provides various defences to copyright infringement, including an exception for fair dealing for the purpose of research or private study.

Matheson did not outline her clients' defence given the newness of the law suit, but she did note that the Litigator service provides significantly enhanced access to court documents that are already available to the public and already routinely used by lawyers. Certainly the service benefits both the legal profession and the public, including the public interests that are served by our well-established open court system.

As do several on-line database services that have existed in the U.S. for years, the Litigator service pierces the veil of practical obscurity shrouding court files by digitizing, sorting, indexing, and making available online selected pleadings, motions and facta.

These are made searchable by, among other things, area of practice, level of court, counsel, and law firm.

One issue of dispute may be whether that amounts to actually selling court documents, or just making those documents more accessible for a fee. Certainly the service does give the profession and the public access to a rich vein of aggregated legal reference material that otherwise remains mostly buried (unless, and until, Canadian courts permit direct on-line access to documents in their files, as the Supreme Court of Canada did last year when it posted appeal facta on its website).

Thus a lawyer or self-represented litigant using such a service can presumably, for example, research an opponent's tactics across a raft of cases, or adapt the pleadings and facta of leading counsel without incurring the hefty hourly rates that may have been paid to create the original documents.

Explains Sokolov, we are not saying that the service doesn't have utility but only that the owner of the service has a responsibility to abide by the law, obtain permission, and fairly compensate people.

Waldman's statement of claim asserts that Westlaw gives its subscribers access to Litigator for an annual fee. The database of public court documents is organized into case reporters in areas such as tort, pensions and estates. Subscribers wishing to access case documents not reported in one of the case reporters they subscribe to may also search for, and then view or download, a document for $65, according to the statement of claim.

Waldman contends that Litigator service infringed his copyright by improperly offering for commercial download the factum he prepared to represent Maher Arar at the Ontario Court of Appeal an original literary work imbued with his own skill and ingenuity, learned from years of practice.

He claims the defendants are trading on his good reputation by showing, and permitting searches by, the names of the drafting lawyer/and or law firm. He says the defendants also claim ownership of the factum by branding each page (except in the PDF of the original) with the statement ©Thomson Reuters Canada Ltd. or its licensors. All rights reserved.

The statement of claim asserts that the defendants have, among other copyright infringements, authorized their subscribers to copy copyrighted works into their own court documents. The defendants are not the owners of the intellectual property in these documents, yet they claim rights and take action as if they were.

Sokolov and Goldblatt say lawyers who have contacted them about the case from all over North America have been overwhelmingly positive.

However, public reaction has been mixed so far, with one lawyer commenting on the Slaw legal weblog that the Litigator service likely improves the quality of legal work by providing precedents to people who might not otherwise have ready access to these documents. The real question, then, is whether Thomson should be paying somebody something for the data it's assembling in the Litigator database. Thomson may be profiting from it but so is the profession. That issue should not be resolved in a class action lawsuit.

Sokolov suggests fair compensation to lawyer-authors would depend upon the nature of a particular document [and] the amount of times it has been used. There'd be a number of factors that would go into it. If, for example, a lawyer has afactum in there that is downloaded hundreds of times and is used extensively, copied extensively, I think that gives rise to a different level of compensation than a document that may sit in there and has never been copied.

Click here to see this article in our digital edition (available to subscribers).

Keeping courts' hands off arbitration

Barry Leon And Andrew McDougall — Fri, 18 Jun 2010 00:00:00 -0400

When a Canadian business is asked to agree to a seat (or place) for an international arbitration, it should be concerned about the possibility of interference by a local court in that jurisdiction. This is particularly so when the seat is an unfamiliar jurisdiction.

No matter how modern the jurisdiction's arbitration rules; how competent the arbitral institution; how attractive the hearing and other facilities; or how safe, convenient or welcoming the place (international connections; visa availability; lack of impediments for visiting counsel, arbitrators, parties and witnesses), the risk of local court interference can undermine it all.

The seat of an arbitration is its legal location, not necessarily where hearings will be held. Its courts have the ability to lend support to the arbitration or to interfere with it.

The prospect of a local court interfering with the arbitration by entertainingoften slowlyand even worse, granting relief such as an anti-arbitration injunction or an order narrowing the scope or subject matter of the arbitration, or setting aside the arbitration award on some basis that does not accord with international standards, justifiably makes foreign parties and their counsel nervous about that place.

Whether local courts will interfere more than is acceptable in accordance with international standards is an important issue to resolve before accepting an unknown place as the seat of an arbitration. This should be a fundamental consideration when assessing newer international arbitration options such as India, Singapore and the United Arab Emirates (Dubai), to name just a few, as well as when assessing more established options such as Geneva, Hong Kong, London, New York, Paris and Stockholm.

It is also a consideration when the international business and legal communities look at Canada as a potential place for an arbitrationToronto, Montreal, Vancouver, Ottawa or Calgaryalthough happily from a Canadian perspective, the assessment of Canadian places of arbitration is generally favourable (although aberrant court decisionseven if corrected by appellate courtsdo disproportionate damage to Canada's reputation on the world stage).

There is one new arbitral centre in which the prospect of local court interference may have been banishedthe Bahrain Chamber for Dispute Resolution (BCDR).

Earlier this year, the BCDR was launched as a joint venture between the government of the Kingdom of Bahrain and the American Arbitration Association. It has the strong support of the local government and boasts world-class hearing facilities in Manama, Bahrain.

What may separate the BCDR from the rest of the pack is the creation of what is informally termed an arbitration free zone under Bahrain's new arbitration legislation. The BCDR has stated publicly:

[W]here international disputes are heard at the BCDR, where the parties involved agree to be bound by the outcome, the award will be guaranteed and not subject to challenge in Bahrain. This resolves an issue that has been a significant problem in many parts of the world, despite existing international conventions. Bahrain's arbitration 'free zone' will, therefore, offer jurisdictional and legal certainty in the recognition of arbitration awards, an essential component of modern day commercial transactions.

A legislative decree regarding the Bahrain Chamber for Economic, Financial and Investment Dispute Resolution provides (in Article 11) that parties to a dispute may agree upon the applicable law relevant to the subject matter of the dispute . . . and (in Article 25) that if the parties have agreed in writing to choose a foreign law concerning the dispute, and they shall not be entitled to challenge the award before Bahrain's Courts, and that the challenge against the award shall be before the competent authority in another state.

While local courts in any jurisdiction should not be interfering with international arbitrations beyond accepted international standards, in Bahrain the parties can point to a specific statutory prohibition on court interference. The BCDR believes that this should provide foreign parties with greater confidence that Bahrain's courts will not interfere.

This innovation in arbitration is but one of the BCDR's innovations. The legislative decree also introduces statutory arbitration. Commercial and financial cases over 500,000 BHD (US$1.3 million) involving an international party or a party licensed by the Central Bank of Bahrain, which would previously have come before Bahrain's domestic courts, will be subject to statutory arbitration in the BCDR.

The BCDR is fortunate to have the Bahraini minister of justice as the motivating force, exercising leadership from the beginning. Most countries can only dream of the kind of support that Shaikh Khalid bin Ali Al Khalifa is providing to the BCDR.

More and more countries are coming to realize that having a strong international arbitration regime is an important contributor in becoming an international financial centre. Bahrain has joined the handful of countries in the world that have their governments proactively supporting international arbitration as a means of helping to further economic activity, growth, trade and development, and attract foreign capital and international business.

Barry Leon and Andrew McDougall are partners in the International Arbitration Group at Perley-Robertson, Hill & amp; McDougall LLP/s.r.l. in Ottawa. They primarily represent and advise parties as counsel in international arbitration, and periodically serve as international arbitrators. Barry also serves as an arbitrator and mediator with ADR Chambers in Ottawa and Toronto.

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Dealing with spills

Dianne Saxe — Fri, 18 Jun 2010 00:00:00 -0400

Humans are not perfect. Engineering, while amazing, is not perfect. Accidents (including spills) will happen. What should environmental law, and lawyers, do about it?

We tend to do the easy things, more often than the important ones. For example, it is easy and popular to make accidents illegal. Almost every country has laws against spills, and they are comparatively easy to prosecute.

A few spills can and do cause catastrophic harmwe only need to look at BP's oil spill in the Gulf of Mexico. But environmental lawyers often rue the amount of time that we spend dealing with minor spills, which are usually unimportant in comparison to the perfectly legal destruction that goes on around us. As we consume ever more and population soars, the earth warms, species disappear and subdivisions take over the countryside. Not to mention wars.

There is a lot that lawyers and engineers can do to reduce the frequency and severity of spills. Making spills illegal, with serious penalties, does encourage organizations to improve their environmental management. Ever since John Braithwaite's pioneering research in Australian coal mines in the 1980s, it has been clear that thorough, well-documented management systems can help. It was differences in management, communication, and the methodical application of precautions that distinguished coal mines having high death rates from those where employees went home at night. These differences were elaborated into environmental management systems, like ISO 14000, that are now widely adopted around the world.

But accidents still happen: the Challenger; the Exxon Valdez; Three Mile Island, not to mention Chernobyl and Bhopal. Isn't there more that we lawyers can do? Are we really reduced to fighting over who pays for the disaster after it happens?

Environmental law's most durable successes have probably been bans: on DDT, so that egg shells would stop collapsing beneath mother birds; on the slaughter of whales; on PCBs. Banning CFCs stopped the destruction of the ozone layer. The ban on cod fishing halted further destruction of our once great cod stocks, but not until they had been devastated by regulated fishing. Promises to be careful just don't seem to last for long.

But we can't ban everything. In fact, we don't seem to be able to ban very much for long. The national wildlife refuge in Alaska has been under constant attack, despite the extreme sensitivity of its fragile and irreplaceable caribou herds. The American moratorium on offshore drilling was lifted just weeks before the Gulf oil spill, as part of President Obama's campaign to pass a badly needed climate change bill. (A drill rig immediately set off for Alaska.) And enforcement is a constant challenge, as we saw this spring when a Chinese oil tanker plowed into a banned area of the Great Barrier Reef, gushing oil into its critical ecosystem.

Environmental assessment (EA) was supposed to help us figure out, among other things, which risks of failure we cannot bear. But it doesn't work very well. For example, we build nuclear plants, with nowhere to put the waste. If BP had conducted a fuller EA of its well, it would probably still have obtained its permit. EA also does a poor job of comparing real-life trade-offs. If the U.S. blocks offshore drilling, but remains dependent on oil, it will have to keep buying that oil overseas, from hostile countries. That means constant movements of crude across the oceans in tankers, which have their own frequent spills. It also transfers trillions of dollars to those hostile countries and entangles the U.S. in foreign wars. It will be a dreadful irony if the BP oil spill prevents the U.S. from reducing its dependence on oil, and its contribution to climate change.

There is one area, however, in which the legal system makes a clear, simple and unique contribution to making things worse. We encourage investors, insurers, and other financial players to take ultra high risks by capping their exposure to third-party damages. Canada's Nuclear Liability Act, for example, limits the liability of the nuclear industry for a Chernobyl-style accident to the relatively tiny amount of $75 million. (A bill to increase the cap to $650 million received first reading in April, again.)

Offshore drilling benefits from a similar, enormous, hidden subsidy. The American Oil Pollution Act limits liability to $75 million. Congress now proposes to retroactively change this to $10 billion although BP has undertaken to pay full compensation. Canada has even lower caps. For example, the Canada-Nova Scotia Oil and Gas Spills and Debris Liability Regulations, under the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act, put a $30 million cap on third-party liability. If an accident happens, the general taxpayer, the natural environment and nearby communities will bear any extra costs. Thus, profits are privatized while the public bears the risk.

Would removing the caps help reduce the frequency and severity of spills? It might. It would certainly give all the financial players a much greater incentive to take every possible precaution, and perhaps to invest instead in alternative sources of energy. Without such hidden subsidies, would oil look so cheap?

Dianne Saxe is an environmental law specialist and heads the environmental law boutique Saxe Law Office in Toronto.

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Using social media safely

Elaine Wiltshire — Fri, 18 Jun 2010 00:00:00 -0400

Social media is not going away. Once thought of as trend, sites like MySpace, Facebook and now Twitter have seeped into our everyday lives.

According to the Social Media Reality Check conducted by CNW Group and Leger Marketing in 2009, nearly 50 per cent of users surveyed said they access social media tools once a day. It was also reported that over 60 per cent use social media to research products before purchasing, and one-quarter of users said they feel better about an organization that is engaged in social media.
So what does that mean for companies? If you are not online, you may be losing customers.

Social media certainly is no longer a fad, probably never was a fad, said Brian Fraser, partner at Gowling Lafleur Henderson LLP and presenter at the 16th Annual Conference on Advertising and Marketing Law.

We, as lawyers and certainly as advertisers, need to understand social media and we need to get our heads around all the issues that relate to it.

From intellectual property rights to privacy concerns, from compliance with a third-party site's terms of use to disclosure issues protecting a company's legal rights when dealing with social media marketing can be difficult to navigate if you're in unfamiliar territory.
One way to ensure a company's safety when dealing with legal issues surrounding social media is to ensure a corporate policy is in place before the site goes live, said Ruth Rapoport, assistant general counsel at Unilever Canada Inc.

According to Rapoport, a corporate policy should speak about the planning process of an internet marketing campaign, especially in terms of who in the company has to be involved with the initiative.

You have to identify in the policy the person who is going to be responsible for its compliance, she said. You also have to designate somebody who is going to be responsible for circulating the policy within the company.

Other issues that need to be addressed in the policy include who will communicate with the users of the site or social media page; who will be monitoring the site and what type of monitoring is needed; how to ensure the content is in compliance with the law and any third-party site's terms of use; and the IP and privacy rights of the users.

Also, as with all policies, you want to make sure that relevant people are consulted and that you get the sign-off needed.

I've seen teams work for months and months on policies and forget to consult people who really should have been consulted or they don't get approval so the policy disappears.

Rapoport also suggests having a decision tree in place, saying it's a very useful tool when working with social media.

A decision tree gives the site moderator guidance on how to deal with certain situations. For example, if a user posts a comments that contravenes the company's posting policy, the decision tree would direct the moderator to remove the content.

It also will identify those cases when [the moderator] would have to go back and run something by legal or corporate communications before giving a response.

The moderator also needs to be properly trained to not only deal with issues that may arise, but also understand the company's key messages to ensure branding continuity.

The moderator has to use the exact language, said Rapoport. So you have to impress this on people who are going to be moderating your site or you can get into trouble.

Moderators are also an important element in terms of ensuring the site's overall success.

Somebody has to make sure the site is doing what you want it to do, she said. And more importantly, that people are actually paying attention, because it really doesn't help to have a lot of time, money and effort into something that nobody's paying attention to.

Using a third-party site can be enticing for a company looking to promote a brand, product or initiative, especially based on the sheer volume of users and accessibility of sites like Twitter and Facebook.

Viral marketing really takes advantage of the functionality of social media tools to attract high traffic to a company's site or social media profile.

What viral marketing does is harness the strongest consumer triggers it's the personal recommendation, said Kelly Moffatt, a partner at Osler, Hoskin & amp; Harcourt LLP and conference presenter.

The goal of the viral marketing campaign is to create a message, send that message out to part of your target market and then make that message so compelling that your target market feels compelled to forward it on.It really just captures people's interest so they really do a lot of the marketing for you.

Viral marketing is based on the idea of rapid multiplication someone tells two friends, they each tell two friends, and so on.
But, said co-presenter Catherine Bates of Heenan Blaikie LLP, a tweet isn't just telling one friend, it's telling 50, 100, or maybe 1,000.

Social media tools are an instantaneous first step that has the potential to go even further on a hugely exponential basis, said Bates.
But viral marketing really comes with a unique set of legal risks due to its unpredictable nature. The goal of legal counsel is to make sure the necessary steps have been taken to manage and anticipate potential risk associated with these types of campaigns.
One specific risk, especially when dealing with third-party sites, is loss of control of the message, said Moffatt.

The internet makes it so easy for [users] to forward your message, but it also makes it a lot easier for them to tweak [it], she said. So really that creates a risk that both your message and the audience to which it's going to be delivered is going to become inconsistent or get a bit off-track with what the marketers' original objectives were.

Bates agrees, adding, Once the message has been created, whether you created it or your consumers did, it's going out there and you don't know what it's going to be associated with, how it's going to be presented or in what context.

Another issue that may arise when dealing with third-party sites is loss of control over who sees the message, which can expose an advertiser to legal liability.

Ultimately, if something successfully goes viral, the hope of viral is that it goes to everyone, so you can't control whose hands the message will arrive, Bates said. This raises questions in terms of regulated products, for example, advertising to children.

Bates points to Québec's Consumer Protection Act which prohibits commercial advertising to children under the age of 13. She also points to the Canadian Marketing Association's code of ethics and their special considerations in marketing to children and teens.
Once it leaves the hands of the advertiser, whose hands will that be forwarded to raises questions as to what the ultimate obligations are of the advertiser up the chain.

According to Bates, taking steps to show best intentions on the part of the advertiser can help to limit fallout if the content does land in the wrong inbox. Giving guidance to consumers, such as asking them only to forward the message to their friends over the age of majority, is one simple way of demonstrating best intentions.

Loss of control of the medium is also an issue when dealing with third-party platforms, since advertisers really are at the mercy of their terms and conditions.

Anytime you want to run a promotion on someone else's platform, you have to be aware that they have control over that platform and they can decide to shut you down, added Bates. Sometime that risk may be worth it, sometimes it may not.

Moffatt suggests that sponsors host contests or other types of marketing campaigns on their own website and use social networking tools to drive traffic to that site, as opposed to doing it all within the Facebook platform, which obviously leaves you much more susceptible and much more at the mercy of their terms and conditions, policies and decisions.

User generated content in any internet marketing context can also cause issue in terms of ownership and potential liability.

According to Fraser, If it's the advertiser who is soliciting and facilitating comments, it's unlikely that the advertiser can avoid liability for the content by saying 'these representations are just made by the consumer they're not connected with us.' That's particularly true if the site is being moderated.

Internet marketing campaigns of any type are time consuming and can be costly for the company looking to utilize these tools, especially given the current market conditions.

A successful campaign means ensuring potential legal issues are addressed early in the planning process.

Ultimately, cutting edge technology can lead to cutting edge, exciting and innovative marketing ideas, but user beware especially in the wild west of social networking.

Details that protect a campaign sponsor can seem straightforward, said Bates, but in the rush from concept to execution things can be lost along the way.

Tips for protecting your IP online

One of the challenges facing organizations now more than ever is how to attract and retain business, despite the vast amount of choice in the market and the economic realities facing consumers.

One of the most important ways a company can try to go out there and get new business and keep their customers interested is to develop clever and hopefully very effective advertising campaigns, says Ingrid VanderElst, a partner with Tory LLP's intellectual property group and presenter at the 16th Annual Conference on Advertising and Marketing Law.

That's very easy to say but in practice it can be very tough to pull off and really requires a huge application of effect, both in terms of a company's internal resources as well as bringing external resources in to assist, which of course has a cost associated with it.
Creating a successful marketing campaign, whether online or through traditional media, can be costly and time consuming; therefore it's important to ensure a company's legal rights are protected.

According to VanderElst, How you protect the elements of an advertisement really depends upon the intellectual property right that is associated with the various elements.

Copyright and trademark law can be applied to many of the elements found in an advertising campaign and not just the traditional elements such as text, images and slogan, but digital elements such as website design and domain names.

VanderElst advises that when launching a new product, make sure to register the domain name, whether a website is part of the branding process or not.

Registration is inexpensive and will protect the company from someone outside the company who buys the domain name with the intention of selling it to the company when the brand becomes valuable. This practice is known as cybersquatting.

Although there are some remedies, you may find yourself having to negotiate and deal with someone when you really don't want to, says VanderElst.

Another issue to consider when embarking on an Internet marketing campaign is the use of third-party sites, such as Facebook, YouTube or Twitter.

Use of these sites can give rise to intellectual property issues since there can be a question as to who owns the content. VanderElst recommends looking closely at the terms and conditions of the site to help determine ownership before embarking on a social media marketing campaign.

Also with social media marketing, comes the question of user generated content. When looking at social media, part of the allure for advertisers is the ability to directly communicate and interact with consumers.

But what if the advertiser was interested in using the user generated content for its own purpose? According to copyright law, whoever wrote or posted the material is the author and owns the rights. So the question then becomes how does a company get the right to use it?

I would suggest, if you can, obtaining from users who are posting material a license to use the material for any purpose, in any medium and you're able to modify or create derivative work from it, says VanderElst. Make the licence as broad as possible so you can do with the content what you want to do with it.

She also says that a licence would be the prudent way to go rather than an assignment, since there are some questions as to the validity of an assignment of copyright in electronic form.

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Law firm general counsel a rarity

Elaine Wiltshire — Fri, 18 Jun 2010 00:00:00 -0400

Malcolm Mercer of McCarthy Tétrault LLP and Stephen Sibold of Bennett Jones LLP have a unique position in the Canadian legal landscape they are two of only a handful of lawyers who hold the title of general counsel at a Canadian law firm.

Although firms in the U.S. were quick to adopt this position starting in the early 2000s, the vast majority of Canadian firms have not yet jumped on the general counsel bandwagon.

In the U.S., with the combination of the litigation exposure that big firms were facing and the prospect of having to comply with some statutory requirements, they said, 'we really need to have a dedicated person or individuals who can look after the firm's legal interests,' said Sibold.

In the U.S., the focus of the general counsel is largely litigation prevention. In Canada, we don't have the same litigation concerns because we just don't have the degree of litigation generally.

According to a survey release in 2005 by legal consulting firm Altman Weil, Inc., over two-thirds of the AmLaw 200 firms in the U.S. that were surveyed have a designated general counsel a number that rose 6 per cent between 2004 and 2005.

Mercer said one of the driving forces behind McCarthy Tétrault's decision to add the position was the change in the conflicts law that rose from the R. v. Neil decision in 2002.

Firms are dealing with a much more complicated environment in terms of conflict, said Mercer, adding that another motivating factor behind the creation of this position was the firm's growing size.

In our particular case, we saw a number of issues and a number of risks which caused us to realize that with a firm our size and the issues of complexity that we faced that this would be helpful to the firm.

Sibold agrees that the size of the firm has a lot to do with the need for a general counsel position.

A number of law firms are getting to a size where they can economically justify having someone dedicated to do legal work for the firm, which, in the past, had always just been parcelled out to various partners and associates to do off the corner of their desk, he said.

Sibold also said he doubts that the general counsel role in Canadian law firms will ever reach the popularity it has in the U.S. because there are not enough large firms that can justify the position from a cost-benefit standpoint.

I wouldn't be surprised if more of the larger law firms developed a role, but I'm not sure it will go beyond the larger firms.

However, Salima Alibhai, senior consultant of ZSA Legal Recruitment, thinks that as law firms become more global in nature, the demand for general counsel positions may start to increase.

Canadian law firms are conservative by nature and so they adopt practices once they have seen them be successful in the U.K. and the U.S., she said. We're just a little bit behind them and eventually as Canadian law firms get more global they will be hiring in-house counsel.

So when or if that time comes, what types of lawyers will best fit this unique position?

There's a tendency for litigators to take the role because the nature of their background is helpful in terms of the things you have to do as an in-house general counsel, said Mercer.

But the unique nature of the role means that there really isn't a single type of lawyer or list of qualifications that would make a candidate successful.

Mercer and Sibold both come to their positions with very different backgrounds and legal experience.

Mercer began with McCarthy Tétrault in 1984, the year he was called to the bar. He was co-leader of the national litigation practice, specializing in commercial, corporate, real estate, insolvency matters and professional negligence.

How did he become the firm's first general counsel? I got asked to do it, he said bluntly.

Sibold, who specializes in corporate securities law, left Bennett Jones in 1996 and served as general counsel for Canadian Airlines for nearly five years. He then served for five years as the chair and CEO of the Alberta Securities Commission. Bennett Jones then approached him about returning to the firm, which he did for a year and a half before taking a 10 month scholastic leave of absence in 2007-2008 to obtain his LL.M. at the University of California, Berkley School of Law, as a Fulbright Scholar.

It was upon his return from Berkley that he was asked to be the firm's first general counsel.

I had been a general counsel beforeand I liked the role, so I said I'd be delighted to give it a shot, recalled Sibold.

Alibhai said that there is no real difference between the type of person who would be interested in a general counsel position with a company versus the same position within a firm.

There is a certain type of lawyer that tends to go for the general counsel positions. And it is a person quite different from a person that wants to become a partner in a firm, she said. They want to work for a business; they want to grow that business; they don't want to work for a variety of different businesses.

Mercer agrees that his position with the firm is not unlike other in-house counsel positions in terms of job responsibilities. But one major difference is that both Sibold and Mercer divide a portion of their time between general counsel responsibilities and work in private practice.

It's a combination of a practical management job and educational role, plus a legal role, and basically you need to like that combination of things, said Mercer.

One key component for someone to be successful in this role is extensive knowledge of the firm meaning that recruitment from outside the firm may not be the best option for a firm looking to fill this type of position.

The person would be familiar with the firm, and so it would be an easier integration for that person to come in as general counsel, said Alibhai.

Sibold agrees intimate knowledge of the firm is essential to be successful in the role.

You need a senior person because they are dealing with partners. You need someone who has the credibility and respect of the partners because sometimes they have to deliver some hard messages on things like conflicts or professional conduct and so on. A junior lawyer just isn't going to be able to do that.

Mercer said that one of the reasons he feels successful in the role is his long history with the firm. I know it very deeply, he said. That has two advantages: one, you're able to understand the context, and two, when you provide advice or make decisions, people are prepared to think that you're acting in the interest of the firm and to not see it as a political role, which is quite important.
Both Mercer and Sibold said they are happy with the career move and feel the position is a good fit for them.

It's not something that I had envisioned, said Sibold. If you'd asked me a few years ago if I thought I'd be doing this, I wouldn't have thought about it. But the position presented itself and I was given the opportunity and I've found it very interesting.

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