Conflicts are a messy business, on every level these days, it seems. While conflict of interest rules underpin the justice system and are at the heart of the practice of law, no one ever dreamed that complying with them would become so onerous and so costly. And it’s not just a big-firm problem. Conflict-related concerns affect law firms of all sizes in a wide range of practice areas. They also no longer occupy the periphery of practice with a growing number of firms assigning a partner or entire groups of lawyers to manage — or is that avoid — conflicts for clients and the firm.
Following conflict rules, which includes their interpretation through a number of Supreme Court of Canada decisions, is absolutely imperative, as an error could lead to damaged client relationships, increased costs, delays, further lawsuits, and even disciplinary action against practitioners. The problem is not that lawyers have to abide by conflict rules, it’s that the rules, and again their interpretation, are complex and are imposing a substantial burden on lawyers, firms, the courts, and even clients.
For a few years, the increasing complexity, cost, and effort required to comply with conflict of interest rules have weighed heavily on law firm manager’s minds. In March 2007, the Canadian Bar Association created a task force to examine the issue and develop a set of model rules and materials to make the process of managing conflicts easier and practical.
The task force is led by Scott Jolliffe, the managing partner of Gowlings, who has been on the forefront of the issue for years. He’s joined on the panel by 14 lawyers who represent law firms across the country, in-house counsel, law societies, and legal insurers — all of whom have varying but interwoven interests in making the application of the principles of conflict of interest more effective. While the task force can’t create enforceable rules, its aim is to develop a set of widely accepted model rules that law societies will incorporate into their rules of professional conduct.
For the first six months, the task force worked together to identify the most prominent areas of concerns and in October released its consultation and background papers. They’re online at www.cba.org/conflicts. The consultation paper has 15 questions that address loyalty requirements and their interpretation, information-sharing within firms, retainer letters, and the problematic challenges posed by current conflict rules.
As already stated, conflict rules don’t just apply to top-tier firms. Mid-size firms, lawyers in smaller communities, and their clients are all affected by the rules. They also affect lawyers’ abilities to move between firms, not to mention firms that have multiple offices that operate in several jurisdictions.
There aren’t likely to be many lawyers who are not touched one way or another by aspects of today’s complex web of conflict rules, which makes it so much more important for every lawyer and every level of practice in this country to take part in the task force’s consultations. The task force is in the throes of its consultation period. The deadline for sending comments is Nov. 29 and Canadian Lawyer encourages all Canadian lawyers to participate by visiting the task force’s web site to read the consultation paper and complete the questionnaire. More than any other issue facing the profession, the miasma of conflict rules and interpretations needs clarity in order to be effective and protect lawyers and clients. Make your voice heard.
The issue of securities regulation and enforcement has been big news in Canada over the last few months. It appears that the debate over whether this country needs a single securities regulator will never be resolved.
Federal Finance Minister Jim Flaherty has once again stated he’s putting together a panel to draft legislation for a national securities regulator. The panel was scheduled to meet before the end of 2007, but by press time no moves had been made. While Flaherty is pushing for a single regulator, Quebec, most vocally, and a number of other provinces say they are opposed.
“A common securities regulator does not mean an Ontario or Toronto-oriented regulatory body,” Flaherty told the Senate standing committee on banking, trade and commerce last month. “That is what we have now . . . . We have an Ontario-dominated securities regulatory system. For those in favour of an Ontario-dominated system, they should permit the current system to remain. For those who want a distribution of powers, they should support a common securities regulator in Canada.”
The debate rages on and, as former Ontario Securities Commission chairman Jim Baillie suggests in our cover story this month, Canada will still look like a bunch of Keystone Cops on the international enforcement scene with its slew of provincial regulators instead of one voice for the country.
But even if Canada never achieved national securities regulatory unity, the many parts of it that now do exist have to do better at arresting corporate crime. Again, our international reputation depends on it. As one recent newspaper article about lax enforcement noted, Canada is not just considered an “enforcement-free zone” where people get away with white-collar crime, but a place where they can profit dearly from such crimes. That’s not a reputation conducive to building a strong economy.
There has been a lot of chin wagging about the differences between Canadian and U.S. treatment of such crimes and it is true that in many ways the patchwork, some might even say haphazard, system in this country is to blame. But there is more to it than that. As the cover story notes, there is a bit of a cozy relationship between the OSC, in particular, and the lawyers who both prosecute regulatory matters and represent or work for the companies and/or directors involved in many of these cases.
On the criminal end of it, there are problems with the Integrated Market Enforcement Teams set up to investigate criminal activities on the markets. A report on IMETs from Nick LePan made public last month points to all sorts of problems, including a lack of prosecutors well versed in securities law. Not to mention that with 13 different regulators across the country, timeliness goes out the window in cases that may involve federal prosecutors and one or more provincial Crowns.
Fighting fraud is not a high priority either within the RCMP or the Public Prosecution Service of Canada, says LePan, and that has to change. No one is complaining about lack of resources; IMET and the OSC have enough to do what they need to, but the lack of co-ordination, complicated multi-jurisdictional regulatory system, and cozy relationships among securities lawyers are making a bit of a mockery of the securities enforcement system in this country. A single regulator would help for sure. But timeliness and co-operation leading to some real results could also go a long way to comforting investors, particularly those who in some cases have been waiting decades for the resolution of cases in which they’ve been bilked of their hard-earned money.
In November 2005, Helena Munroe was whisked away, under false pretenses, from her Nova Scotia home by her brother. Claiming his sister was unhappy, he secretly took Helena, suffering from Alzheimer’s disease, back to his home in Scotland. It would be 19 months before her husband, Sandy Munroe, would be able to see her again. And even now, it will be at least two years — and a long and arduous battle — before she returns home to Nova Scotia. Just days before we went to press, it was announced that Helena would soon be returning to Canada on the heels of a British panel, formed under a law designed to protect vulnerable adults, determining Sandy to be her official caregiver and decision-maker.
As a psychologist specializing in Alzheimer’s, Helena knew what lay ahead when she was diagnosed with the disease. She did the right thing: drew up papers designating her power of attorney and preparing a health-care directive long before she was declared mentally incompetent, in May 2005. Her husband would be the one to take care of her, with a close friend as an alternative. Her wishes were set out in official documents. That would have been fine, if her brother hadn’t swooped in and jetted off with her to the U.K. Once Helena was moved beyond Canada’s borders, her wishes, as outlined in those documents, essentially became unenforceable.
Her husband pleaded to have the brother charged criminally with kidnapping. Nothing happened. He fought in Canadian and British courts to get her back. Nothing worked. Sandy, along with the help of Canadian diplomats, finally located her again in a psychiatric hospital in northern England in February 2006.
It was still months before he could see Helena. And still, he had to prove to the panel and an independent mental capacity advocate to prove that he was her official caregiver. An arduous and lengthy process that shouldn’t have been necessary if the power of attorney and health-care directive documents prepared in Nova Scotia carried any weight across borders.
The case, as outlined in our Legal Report on Wills and Estates on page 49, highlights the need for changes in legislation to protect vulnerable adults from ending up in similar situations, particularly as the number of elderly people in society is increasing. Within Canada there is a trend toward having documents created in one jurisdiction recognized in another, but outside the boundaries of Canada, there’s practically no protection.
The Hague Convention on International Protection of Adults was struck in 2000 yet very few countries in the world have signed on — Canada is not one, neither is the U.S. — even though 40 countries were part of the negotiations leading to the agreement. So far, ratification of the convention has not been much of a priority for the “new” Conservative government. Defence Minister Peter MacKay, who is from Nova Scotia, has taken a personal interest in Helena Munroe’s case. He is a powerful member of the current government and perhaps his involvement in the resolution of this affair will prompt him to push for more action on the federal front.
With Canada being a nation of immigrants who have family all over the world, and the numbers of older people growing, Canada needs to create legislation to protect vulnerable adults that put into law the recognition of their written wishes so they are applied evenly across the country, but also move forward on international agreements that would extend those same protections.
It may not be the sexiest issue out there, but our mother and fathers, grandmothers and grandfathers deserve at least that much from our politicians.
The Supreme Court’s 1985 Singh v. Minister of Employment and Immigration decision gave any foreigner who set foot in Canada all the procedural rights that the Charter grants to full-fledged Canadian citizens. In that ruling, the word “entitle” appears 24 times in relation to would-be Canadians. The word “responsibility” appears just once.
Nobody wants to be insulted. Nobody wants to think or feel that they or their colleagues are not worthy. It’s human nature to react when you’re feeling threatened. But the reaction to Maclean’s magazine’s “Lawyers are rats” interview with author Philip Slayton is quite amazing.
I do believe that law associations and law societies should rightfully stand by their members and not let lawyers’ names and reputations be tarnished. But the reaction to the Maclean’s interview is over the top. First of all, the magazine itself completely torqued the comments and, as Law Society of Upper Canada Treasurer Gavin MacKenzie noted, “has decided to fill the yellow journalism void created by the decision of Weekly World News to cease publication.” Over the last few months, all of the magazine’s covers have been sensationalist. This particular one, with its series of clip-art faux lawyers on the front with captions like “I pad my bills,” “I’m dishonest,” and “I take bribes” is just another in a parade of tabloid-inspired covers.
But many of the responses by lawyers, and their associations, have simply added fuel to the fire. Ontario Bar Association president James Morton’s op-ed piece in the National Post was too much when he brought in a comparison to a 1940’s Nazi anti-Jewish movie. He calls the Maclean’s article sensationalistic, but any comparisons to the Holocaust are themselves sensationalistic and entirely overboard. Almost all the official reactions from the legal profession called the Maclean’s interview one-sided and unbalanced. Well, it is an interview with one man about his opinions; it’s not supposed to be balanced.
“Maclean’s allows these few stories to stand unquestioned as representative of the legal profession,” says MacKenzie. Again, it was an interview about Slayton’s books and his opinions. A one-on-one interview is inherently one-sided. There were no libels or smears against individuals; it was simply a portrayal of opinion. The questions were leading and some of the answers quite provocative, but there’s nothing wrong with that.
Slayton’s book, Lawyers Gone Bad, isn’t about the lives of everyday lawyers who do real estate transactions or write employment contracts. Neither did he choose to write about lawyers who get suspended for not filing their annual fees or those whose fiddle with their trust accounts. Nobody would want to read that. Of course he cherry-picked the sexiest, most lurid stories. It’s not an overview of the profession. It’s a deliberate look at some of the seamiest lawyers out there. And none of it is really an exposé, as many commentators and mainstream media have called it. The tales he tells are all on the public record, in court documents, in discipline proceedings. He’s rounded them out with interviews and other research, but none of it is secret. It’s now simply all collected in one place.
The reality is there are lawyers who go bad, sometimes of choice and sometimes through circumstance. This month’s cover story on Peter Shoniker illustrates just that. But the same way as there are honest and dishonest mechanics, there are honest and dishonest lawyers. What Slayton does try to bring to the fore are some of the issues that can be instrumental in why some lawyers go “to the dark side.” The pressures of billing and profits are relentless, particularly in large firms. Law societies are relatively conservative and the discipline processes are not as transparent, effective, and as even across the country as they could be. And, as even I’ve heard through conversations with many law students, law schools tend to focus on business law (and big law firms), generating money, and working with the wealthy.
Slayton has said many things that lawyers themselves say. He’s been attacked by critics but at the same time lauded by many practitioners who agree with him. Instead of hurling insults, the profession should take note and engage in debate about the issues Slayton has brought to light. He is not some fly-by-night operator, but a former law school dean and Bay Street lawyer who has keenly observed the profession for decades. Everyone may not agree with him and, of course, the increase in sales of his book resulting from this brouhaha is benefiting him, but his opinions shouldn’t be dismissed. Canadian Lawyer will still run his columns and give him the freedom to express his opinions in our pages.
For a little over a year and half now, I’ve been in the background at Canadian Lawyer as the associate publisher, essentially working with the editors and helping to set the tone and agenda for the magazine, as well as working with the art director and publisher to ensure the continued success of an attractive and high-quality product. But with this issue of the magazine, I’m moving into the driver’s seat and taking over as the editor of Canadian Lawyer.
For the last 10 years, I’ve been working mainly on Law Times, our sister newspaper that covers the newsy goings on of the legal profession in Ontario. As with many others who’ve become legal journalists, I was fortunate enough to have come under the tutelage of previous editors Jim Middlemiss and Michael Fitz-James, both of whom essentially held my hand in those early days when a young non-lawyer like myself was finding her sea legs in this somewhat daunting area of coverage. (You can only imagine how many times this young scribe was asked by multitudes of members of the bar if I was a lawyer. Thankfully, those days are long gone.)
Over the past few years, this magazine has undergone some changes, both in look and content (though nothing too radical!) and our team has grown and evolved. With this issue, former managing editor Kirsten McMahon will take over the full-time editorship of our growing sister magazine Canadian Lawyer InHouse. Since its launch last year, InHouse has garnered great interest from both inside and outside counsel and the magzine now deserves to have its own dedicated editor to oversee its growth. Kirsten will continue to write for all four of our CLB Media legal publications.
As readers may also have noted, we’ve increased our bench strength, bringing in staff writer Jennifer McPhee, who has managed a steep learning curve over the last eight months, and is also making a great contribution to all four of our law books. Rounding out the writing squad is Law Times associate editor Helen Burnett, who’s work mostly appears in the newspaper and online but will also be found in the pages of each issue of Canadian Lawyer 4Students and soon more frequently in the regional roundup of this magazine.
The next few months will bring some changes and tweaking to the magazine as I get more comfortable and set the agenda for the coming year. As always, I welcome input from readers in all areas ranging from story ideas to letters to commentaries and anything in between. Feel free to contact me at any time via e-mail at firstname.lastname@example.org or by phone at 905-713-4385. I look forward to hearing from you and to this new and exciting endeavour.