Commentary

Monday, 06 August 2012 09:00

Celebrating excellence

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My favourite aspect of putting together Canadian Lawyer’s annual Top 25 Most Influential is receiving nominations for it. Some nominators are very brief, providing simply a name and one or two other bits of information. Others wax poetic for hundreds of words describing the work and accomplishments of the person whose name they have put forward. But no matter how they come in — and I urge readers to keep their eyes open for the request for nominees next spring — I’m always impressed by their variety and quality.
Monday, 06 August 2012 09:00

Bringing value to the client

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In 25 years of writing, I have interviewed thousands of lawyers, in private practice and in-house. What strikes me about in-house lawyers is they think differently than their private-practice counterparts.They see their primary task as risk managers and they ask two key questions: how can I help my company and what value does the legal department bring?
Monday, 02 July 2012 09:01

Environmental law runs afoul

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It is very hard to avoid puns when writing about environmental law issues. The issues, and positions taken, are often polarizing, and the themes and perspectives articulated are commonly recycled. Hopefully this lowest form of wit will not seep into, and unduly contaminate, this column.
Recently, regulators in Ontario have reached decisions, made orders, and issued (emitted?) statements indicating they are prepared to greatly expand the scope of persons against whom environmental remediation orders can and will be made. In isolation that is not a bad thing — maintaining a clean environment is indisputably a laudable objective. Expanding that scope raises certain questions, naturally, such as whether the expansion of that scope is fair and is properly focused to achieve its intended results. Environmental law is largely designed to force individuals and businesses to take account of an externality: the effect of their activities on the environment. The irony is that, in expanding the scope of remedial activity in the manner recently witnessed, regulators may themselves be creating very significant externalities.
At a panel discussion this winter on the intersection of insolvency and environmental law, a representative of the Ministry of the Environment stated that, in seeking orders under the Environmental Protection Act (Ontario), the ministry is willing to look beyond the polluter, where the polluter is a corporation, not only to its directors and officers but to its shareholders. The EPA contains a mechanism to do this where the “management and control” of the polluter is not confined to the polluter itself. But the speaker went beyond those words to invoke a concept that touches the hearts of corporate lawyers: she said, “we think of it as truly a piercing of the corporate veil.”
There is very limited precedent to interpret the meaning of “management and control” in the EPA. However, recent enforcement initiatives, in addition to the comments cited above, suggest the ministry intends to interpret these words broadly. It recently issued an order against Tembec Industries Inc., a non-controlling, indirect shareholder of a bankrupt polluter, to step into the polluter’s shoes at significant cost to address historic contamination. Tembec had only been a shareholder (and an apparently passive one) over a period during which the polluter was compliant. The Environmental Review Tribunal has been reading from the same script. In 2009, the tribunal ordered a municipality to pay for a cleanup to the extent that a private polluter’s insurance was insufficient because the pollution had travelled through the municipality’s sewers. Then last year, the tribunal ordered a former director of a former owner of a polluted site to fund a remediation.
While the words “management and control” in the EPA have not been subjected to much judicial consideration, the doctrine of “piercing the corporate veil” is established law in Canada, and has been so for over a century.
The fundamental concept of the “corporate veil” is that a corporation is a separate legal entity, distinct from its owners, and therefore liable for its own actions. From a policy perspective, limited shareholder liability is integral to encouraging public participation in the capital markets and to facilitating the risk-taking that is the seed of growth in capitalist economies. Without limited liability there might not have been the capital to fund the first railroads, the Ford Motor Co., Apple, nor, more recently, Facebook.
There will be cases where justice requires a remedy, but they are by necessity outliers. In Kosmopoulos v. Constitution Insurance Co., the Supreme Court of Canada stated that “the best that can be said is that the ‘separate entities’ principle is not enforced when it would yield a result ‘too flagrantly opposed to justice, convenience, or the interests of Revenue.’” The corporate veil, in other words, is not to be lifted as lightly as Zsa Zsa Gabor’s. Other cases have found that the veil can be lifted where the corporation is acting merely as an agent, otherwise known as a “sham” or “alter ego” corporation, where it was incorporated to facilitate an illegal or improper purpose, or where there is inadequate capitalization of the corporation by the shareholder such that it cannot meet its anticipated obligations.
Or, more salient to the EPA, where provided by statute. This is where the concept of “management and control” in the EPA intersects with the construct of the corporate veil. As noted, the EPA certainly furthers an important policy. So does the corporate veil. There are lots of cases where balancing competing policies is near impossible, but here it is not. There’s a balanced jurisprudence already established as to when a shareholder can be liable for a corporation’s actions. Furthermore, subordinating the significance of fairness as a criterion for imposing liability in favour of casting a very wide net may lead to unintended results. Bottom line, in seeking to protect our verdant vales, consideration should be given to our corporate veils (if I have to stay away from puns I have to be permitted weak wordplay).
b_150_0_16777215_00___images_stories_01-CANADIANLawyer_2012_July_neillmay.jpgIt is very hard to avoid puns when writing about environmental law issues. The issues, and positions taken, are often polarizing, and the themes and perspectives articulated are commonly recycled. Hopefully this lowest form of wit will not seep into, and unduly contaminate, this column.
Monday, 02 July 2012 09:00

The future of law

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In 2009, I embarked on a major project to look at the state of diversity in the law in Canada. At the time, there were perhaps one or two women managing partners of law firms of any size across the whole country; the number of black lawyers who were partners in Bay Street firms could be counted on one hand; and while many law firms had diversity initiatives, they often consisted of nothing more than a “muliticultural calendar.” In another issue, we wanted to write a story about being gay or lesbian in Big Law. Not one Bay Street lawyer would put their name to the story and talk about the issue. We had an associate from a national firm’s Calgary office on the record, but that’s as close as we could get even though law firms insisted that they were welcoming to all diverse groups.
That year, I attended my first Pride at Work gathering in Toronto. The organization brings together LGBT professionals and their allies from businesses all across the country and every year it holds a big bash during Pride Week in Toronto. In 2009, only one law firm — Fraser Milner Casgrain LLP — was willing to openly support the organization and is considered one of its founders. Looking at this year’s event, Blake Cassels & Graydon LLP, Borden Ladner Gervais LLP, Osler Hoskin & Harcourt LLP, McCarthy Tétrault LLP, Norton Rose Canada LLP, and Thornton Grout Finnigan LLP have joined FMC as law firm sponsors of the event.
In mid-June this year, at the Canadian General Counsel Awards, Douglas Stollery, general counsel at PCL Constructors Inc., was honoured with a lifetime achievement award. He got a bit teary-eyed at the end when he thanked his same-sex partner for all his support over the years. It was all so normal. No gasps from the black-tied crowd, no whispers of shock at the tables full of in-house counsel.
Also over the last few years organizations promoting diversity in the legal profession have been increasing and growing. One of the most active is Legal Leaders for Diversity, a group of in-house counsel committed to increasing diversity in their ranks as well as in the law firms that serve them. It’s really still just a start. Canada is years behind other countries in its promotion and embracing of diversity, which is not just right but makes business sense, particularly in the global economic environment.
I’ll conclude by saying when I attended the year-end gala for the Federation of Asian Canadian Lawyers in the spring, what struck me the most, beyond the incredibly varied backgrounds of the attendees, is that most of them were young. Sitting beneath the stained-glass windows and wood panelling in the University of Toronto’s Hart House was quite a striking visualization of the future of law — young, diverse, engaged, and ready to take on the world.
In 2009, I embarked on a major project to look at the state of diversity in the law in Canada. At the time, there were perhaps one or two women managing partners of law firms of any size across the whole country; the number of black lawyers who were partners in Bay Street firms could be counted on one hand; and while many law firms had diversity initiatives, they often consisted of nothing more than a “muliticultural calendar.” In another issue, we wanted to write a story about being gay or lesbian in Big Law. Not one Bay Street lawyer would put their name to the story and talk about the issue. We had an associate from a national firm’s Calgary office on the record, but that’s as close as we could get even though law firms insisted that they were welcoming to all diverse groups.
Monday, 07 May 2012 09:01

Limit SCC judges' terms to 18 years

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Let’s amend the Supreme Court Act so the judges are appointed for staggered, fixed, non-renewable terms. This would curb the prime minister’s ability to mould the court in his ideological image for generations to come. It would stop his political point of view being perpetuated long after he is put out to pasture. It would ensure a constant supply of energetic and representative judges, full of new ideas.
I suggest 18-year terms staggered every two years seem right for a nine-member court, but shorter terms are worth discussing.
I can hear someone objecting that this scheme might enhance the ability of a long-serving prime minister to stack the court. Five of Canada’s 22 prime ministers served for more than 10 years, and two, Mackenzie King and John A. Macdonald, for more than 18. With staggered 18-year terms, a prime minister of great longevity might end up appointing every Supreme Court judge. But any system of appointments would almost certainly allow a prime minister with such staying power to fill up the court with his ideological soul mates. One merit of the staggered, fixed-term system is that a process of court renewal would begin no later than two years after that long-serving prime minister left office, and would continue apace.
By now pretty much everyone has cottoned on to the fact that the Supreme Court of Canada is becoming the “Harper Court.” The most ideological prime minister in a long time has already appointed four of the nine sitting judges (justices Marshall Rothstein, Thomas Cromwell, Michael Moldaver, and Andromache Karakatsanis) and will soon appoint two more (justices Morris Fish and Louis LeBel will reach the mandatory retirement age of 75 before the next federal election). It’s the Harper Court all right, getting more conservative all the time. We shouldn’t be surprised. After all, we voted the top guy into office and know that he gets to appoint the judges he wants.
The problem is that the country moves on ideologically and demographically leaving the Supreme Court behind. The face of Canada changes, but the court doesn’t keep pace. Isn’t it about time, for example, that someone from a visible minority and someone from the gay and lesbian community sat as a Supreme Court justice? It remains a scandal that an aboriginal has yet to be appointed. The usual counter-argument to such a suggestion is “all that matters is legal ability,” but that retort is specious and simplistic (a subject for another column). The “keeping pace” problem is made worse because a Supreme Court appointment is solely within the gift of the prime minister, with no real democratic oversight. There is none of that pushing and shoving by elected representatives that makes sure certain legitimate interests are promoted and would ensure that the court keeps up with a country in transition.
The United States has been struggling with this problem for a long time (it was on Thomas Jefferson’s mind when the Union was created). Pulitzer Prize-winning historian James MacGregor Burns has written of the U.S. Supreme Court: “Justices throughout the court’s history have clung to their seats long after their political patrons have retired and long after their parties have yielded to their opponents or even disappeared. They have often perpetuated ideologies and attitudes that are outdated or that Americans have repudiated at the ballot box.” The problem is more acute in the U.S. because Supreme Court judges are appointed for life. But in one important respect, the situation south of the border is better than it is in our own country. The president only nominates a Supreme Court justice and his choice has to be approved by the Senate after a long and public political process. Democracy and transparency can have powerful and salutary effects on the judicial appointments process.
In the U.S., the debate over term limits has recently centred on a 2006 academic paper by two law professors, Steven Calabresi and James Lindgren. They write: “A regime that allows high government officials to exercise great power, totally unchecked, for periods of 30 to 40 years, is essentially a relic of pre‐democratic times.” They argue for 18-year staggered terms for U.S. Supreme Court justices; once the scheme was fully phased in, there would be two appointments in each four-year presidential term. One benefit would be “the democratic instillation of public values on the Court through the selection of new judges. . . .” Another would be removing the “ability of one political movement to lock up the court for thirty years, as Republicans did at the start of the Twentieth Century and as Democrats did after the New Deal.” The term limits idea was espoused by a 2012 presidential candidate. Unfortunately for the idea’s credibility, the candidate was Rick Perry, who in a TV debate couldn’t remember how many Supreme Court judges there were.
By the way, there’s nothing radical about term limits for the judges of a country’s highest court. Calabresi and Lindgren point out that members of the constitutional courts of France, Italy, Spain, Portugal, Germany, and Russia serve fixed, limited terms of between six and 12 years. The same is true of some non-European countries — South Africa, for example.
As usual, the devil is in the details. How would the scheme be phased in? The answer seems to be that it should only apply to new appointments; sitting judges would not be affected. What should be done if a justice dies or resigns prior to the expiration of his fixed term? Most agree that an interim justice would be appointed to fill the remainder of the deceased or retired judge’s term. What happens to a judge when his term is over? He retires on a fat pension, that’s what, and can do what retired judges always do — be of counsel to a prestigious law firm, chair a commission of inquiry, etc. It’s not a bad life.
Philip Slayton’s latest book, Mighty Judgment: How the Supreme Court of Canada Runs Your Life, is now available in paperback. Follow him on Twitter @philipslayton.
Illustration: Dushan Milic
Illustration: Dushan Milic
Let’s amend the Supreme Court Act so the judges are appointed for staggered, fixed, non-renewable terms. This would curb the prime minister’s ability to mould the court in his ideological image for generations to come. It would stop his political point of view being perpetuated long after he is put out to pasture. It would ensure a constant supply of energetic and representative judges, full of new ideas.
Monday, 07 May 2012 09:00

Safety first

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It’s month three in a row of sharing useful tips that I’ve heard at events around the country. I hadn’t planned on it, but if there’s good info on offer, I may as well share it. This month’s tips come from the spring meeting of the Canadian Corporate Counsel Association. On a 30 C April day in Montreal, I sat in on a session about ethical obligations of in-house counsel in a technological world. Here are few random tips gleaned from the session that included Dominic Jaar of KPMG, Bernard Brun of the Desjardins Group, and Langlois Kronstrom Desjardins LLP’s Jean-François De Rico.
Of use to any lawyer or anyone who uses a BlackBerry, in particular, but any device that uses Bluetooth: turn off the Bluetooth or make sure it is password-protected. Basically, the panel pointed out, all phones come set up with default passwords and anyone who is so inclined can not only easily access all the information on your device, but may even be able to go through your BlackBerry to access your company or firm’s exchange server if your Bluetooth is on and unprotected.
You can be sure as they were telling the room this, every single person in there whipped out their BlackBerrys and made the appropriate changes. I am pleased to report my Bluetooth was turned off, so Thomson Reuters’ information was safe!
Of course, password and other security measures were a big part of the discussion. The usual caveats about making sure that once you dispose of computing equipment (and that includes items such as scanners), the hard drives are wiped clean or, better yet, shredded so no private or corporate information can be gleaned from them later on. But in the day-to-day life of your average lawyer, many of whom use and carry around laptops and other portable devices, Jaar says: “If you do nothing else, encrypt your hard drive.”
Password protection is not enough — you need full encryption. As De Rico pointed out, studies show that most data breaches occur from within because of human error and/or negligence. So much like you would make sure that your filing cabinets are always locked and secure, do the same with all your computing devices, on the desk or on the go. Windows 7 now comes with encryption options as default settings, so make use of them.
One caveat on the encryption front from Brun: be sure that your IT department is aware of what’s being encrypted so if someone leaves the company, and especially during litigation, there is still access to their information. This might be a good place to have an encryption policy in place and just one of the many ways IT and legal departments can work together for the betterment of all!
So there are two ways to keep your data safe. May as well start now!
It’s month three in a row of sharing useful tips that I’ve heard at events around the country. I hadn’t planned on it, but if there’s good info on offer, I may as well share it. This month’s tips come from the spring meeting of the Canadian Corporate Counsel Association. On a 30 C April day in Montreal, I sat in on a session about ethical obligations of in-house counsel in a technological world. Here are few random tips gleaned from the session that included Dominic Jaar of KPMG, Bernard Brun of the Desjardins Group, and Langlois Kronstrom Desjardins LLP’s Jean-François De Rico.
Monday, 02 April 2012 09:00

Time to reform the OAS

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It’s time baby boomers stop living off the avails of future generations. The Harper government’s plan to revamp the Old Age Security Act should be cheered by Canadians under 50, of which there are plenty — about 25 million, according to Statistics Canada. If the government goes ahead with OAS reform, they will no longer be called on to pay the freight to carry those who benefited the most during the country’s strong growth.
At the time of writing, the government had not tabled its budget, so the plan for OAS reform was unclear. But ministerial speeches indicate the Conservatives are willing to take on the greying of Canada’s population. At the centre are baby boomers, those Canadians born between 1946 and 1965 (disclosure: I fall into the late-stage boomer category, being born in ’61). The first wave of the baby boom became eligible to collect OAS benefits starting in 2011, when they turned 65. Assuming the program doesn’t change, the last boomers will start collecting OAS benefits in 2030.
In January 2012, OAS benefits amounted to $540 a month — indexed to inflation. The government starts clawing back those payments when net income exceeds $67,668, and the entire amount is clawed back when net income reaches $109,764. To put that in perspective, in 2009, a Canadian male earned an average salary of $45,200, while a female earned $31,100, according to Statistics Canada. The median income for a family was $68,410.
Spending for OAS is funded out of government’s general revenues. The problem is that as Canada’s population ages, spending for OAS will skyrocket, rising to $108  billion in 2030 from $36 billion today, a threefold increase. By 2030, there will be more people over 65 than under 14, with two workers for every one person in retirement, compared to a ratio of  4:1 today. It’s a tremendous burden facing future generations, many who aren’t born or haven’t entered the workforce yet.
They will do so carrying an inordinate amount of student debt. The average student loan upon graduation is $27,000, according to the Canadian Federation of Students. They will also be paying much more for a house than their parents and grandparents did and it’s unlikely they will see the kind of rise in property values that have fuelled much of the rise in wealth over the past few decades.
The OAS was first introduced in 1952. It was modified in 1965 to accommodate the creation of the Canada Pension Plan. In 1967 it was amended to create the Guaranteed Income Supplement. The system has been credited with providing Canadian seniors a stable form of income. Interestingly, the original age for benefits to kick in was 70, which dropped to 65 in 1969. During that time, the life span of Canadians has expanded and most can expect to live into their 80s.
Moreover, recent surveys suggest Canadians expect to work beyond the normal retirement age of 65. A survey by Sun Life Financial in late 2011 found that less than one-third of Canadians expect to be fully retired at 66 and 48 per cent plan to ease into retirement and continue working part time. A retirement target of 65 seems outdated in a world where 60 is the new 40. In fact, some countries are raising their mandatory retirement age to 67 or more.
There has been much teeth gnashing over the Conservative government’s move to tackle OAS reform. Much of the consternation seems unnecessary. The government said it won’t impact existing seniors and changes will be phased in. There is ample wiggle room to rein in costs by raising age eligibility requirements or lowering claw-back thresholds. OAS should be a social program to support those most in need — a safety net and not a meal ticket for all.
This is more about defining what government should be and foisting responsibility on Canadians to ensure they are preparing and saving appropriately for retirement. Most working Canadians don’t contribute to RRSPs or TFSAs, the programs designed to help them save and get through their retirement years.
It shouldn’t be the government’s responsibility to provide for all. Governments in Canada cannot continue to be all things to all people. Just ask Greece, or for that matter Ontario. The recent Drummond report warns that without tackling serious issues, such as public pensions and overspending, Ontario is on track to run $30-billion deficits. That will bankrupt the province.
It’s been 45 years since the OAS act faced serious amendments. That’s a long time in politics. Kudos to Canadian politicians for tackling the sacred cow of OAS reform. It’s time boomers paid their own way, while they still have working years left to save. It’s the least we can do for future generations.
Jim Middlemiss blogs about the legal profession at WebNewsManagement.com. You can follow him on Twitter
Illustration: Scott Page
Illustration: Scott Page
It’s time baby boomers stop living off the avails of future generations. The Harper government’s plan to revamp the Old Age Security Act should be cheered by Canadians under 50, of which there are plenty — about 25 million, according to Statistics Canada. If the government goes ahead with OAS reform, they will no longer be called on to pay the freight to carry those who benefited the most during the country’s strong growth.
Monday, 02 April 2012 08:59

Timing is everything

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There is much gnashing of teeth and wringing of hands about women leaving the law profession in droves. But there are still lots who continue in private practice and follow the path to partnership and other successes. There is one thing that most young female lawyers think about — and it is integral in many cases as to whether they will stay or exit the profession: when is the best time to have a baby?
Sometimes these things just happen, but as with many steps along the way in one’s legal career, it can (and probably should) be planned.
A recent panel of women partners on Bay Street, sponsored by Young Women in Law and the Ontario Bar Association, offered a very candid discussion of “Women on the road to partnership.” While most of their advice and experiences would translate to any lawyer on the partnership path, the discussion about children and family seemed to really strike a chord.
The panellists all seemed to agree the best time to take maternity leave was during your years as a senior associate. So if you’re making plans, year five of practice seems to be the sweet spot. Here’s why:
As a young associate, you are doing work for senior associates and partners and don’t have much control over what you are responsible for. This also means you can’t really delegate. And it’s at this time in your career when you are building relationships, finding your way in your legal career, and trying to make a name for yourself (i.e., impress senior members of the firm). It’s long hours and pedal to the metal time.
As a partner, responsibilities change and are more complicated. While you may not be able to delegate work when you are a junior associate, when you are partner you can but other responsibilities of partnership make it much more difficult to duck out of practice for any length of time.
At the senior associate level, you’ve graduated to being able to download some of your work but are still not in the position of responsibility that you’ll find yourself in as a partner. Thus, sweet spot!
All the panellists said they’d had children both as associates and partners and found it difficult to take off more than a few months for parental leave once they were partners.
There was one other piece of advice they shared, in the context of keeping your eye on the partner prize: when you are ramping down for your planned maternity leave, keep your foot on the gas. While you may not be getting new files, offer your services in other ways such as helping to write papers or do some quick and fast assignments.
So if nothing else when planning your career, I think some great tidbits to ruminate over regarding one of life’s bigger decisions.
There is much gnashing of teeth and wringing of hands about women leaving the law profession in droves. But there are still lots who continue in private practice and follow the path to partnership and other successes. There is one thing that most young female lawyers think about — and it is integral in many cases as to whether they will stay or exit the profession: when is the best time to have a baby?Sometimes these things just happen, but as with many steps along the way in one’s legal career, it can (and probably should) be planned.
Monday, 05 March 2012 08:01

Pulling the rug out

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The Supreme Court doesn’t just decide those fancy, beloved by the press Charter of Rights cases about civil liberties, police powers, and other headline-grabbing stuff. It still resolves, for example, dull tax disputes between the taxpayer and his avaricious government. It still deals with traditional constitutional fights between different levels of government (there is a surprisingly large number of these cases — they’re almost the court’s bread and butter). Sometimes these apparently tedious decisions, easy to overlook, go to the heart of the country’s economic and business fabric.
One such case is Copthorne Holdings Ltd. v. Canada. Decided last December, Copthorne is about the Income Tax Act’s General Anti-Avoidance Rule, known to tax aficionados and legal geeks as GAAR. (Please try to stay awake.) GAAR is intended to stop abusive tax-driven transactions technically permitted by the Income Tax Act but whose primary purpose is to avoid taxation. Bad boy Copthorne Holdings had engaged in naughty transactions of this sort, but the tax department wasn’t having any of it, invoked GAAR, and denied Copthorne the tax benefits it had anticipated. Copthorne challenged the ruling, but lost in the courts below. The Supreme Court affirmed the lower courts in a unanimous and clear judgment delivered by Justice Marshall Rothstein on behalf of a nine-member panel.
The director of the Canada Revenue Agency has said the decision will not have much of an effect on how the CRA goes about its business. Most tax practitioners are skeptical and expect beefed-up CRA use of GAAR. After all, although recognizing GAAR’s limitations, in Copthorne the Supreme Court strongly endorsed the rule and its application. Tax probity was affirmed. You can bet that the CRA will be vigorously using all the tools at its disposal, including this one.
Copthorne is quite different from Lipson v. Canada, a GAAR case decided by the Supreme Court in 2009. When Lipson was handed down, Canadian tax guru Vern Krishna called it “the most significant tax decision in 70 years.” In a 4-3 decision, petulant judges divided philosophically over tax policy and took bad-tempered swipes at each other. Some judges (the bare majority) favoured GAAR and the government. The rest did not apply the rule and stood in solidarity with the taxpayer. But now, in Copthorne, the Supreme Court seems to have got its act together. The judges are all rowing in the same direction. The philosophical divide has magically disappeared.
Copthorne, unanimous, clear, and
balanced, trumped Lipson. Reaction to the decision was favourable. The Supreme Court seemed attuned to reasonable business practice and gave clear guidance to the financial and tax community. But good feelings about the court lasted less than a week. That was because Reference re Securities Act, another unanimous nine-judge decision, released a few days after Copthorne, was as bad a decision as Copthorne was good. Nine judges got it right in Copthorne. The same nine got it wrong in the reference.
For a long time, those involved in Canada’s capital market have yearned for a single national securities regulator to replace the absurd patchwork quilt of 13 sets of rules administered by 13 separate regulators, one for each province and territory. In 2006, the federal government produced a draft Canadian Securities Act intended to establish a single regulator. The draft act did not unilaterally impose a unified system, but allowed provinces and territories to opt in. The expectation was that, sooner or later, they would all embrace a national system, driven by irresistible logic and by the imperative of an increasingly international capital market.
There was, of course, the inevitable whingeing from some of the provinces, particularly Quebec and Alberta. For political cover, the government of Canada asked the Supreme Court for an advisory opinion on whether the proposed act fell within Parliament’s general power to regulate trade and commerce. The government argued that the securities market had evolved from a provincial matter to a national matter affecting the country as a whole. As a consequence, it said, the federal trade and commerce power now gave Parliament legislative authority over all aspects of securities regulation. Alberta, Quebec, Manitoba, and New Brunswick argued that the proposed scheme infringed the provincial power over property and civil rights.
Most observers thought the Supreme Court reference was pretty much pro forma. A national securities regulator was obviously an idea whose time had come. Surely a few provincial politicians playing to the gallery couldn’t derail a scheme endorsed by everybody who knew something about finance and business. The Supreme Court, it was widely assumed, would recognize reality.
But it didn’t. In an awkward unanimous judgment, the court decided that the draft Securities Act was unconstitutional. It agreed that “what the Act seeks is comprehensive national securities regulation, with the aim of fostering fair and efficient capital markets and contributing to the stability of Canada’s financial system.” But, said the court: “federalism demands that a balance be struck, a balance that allows both the federal Parliament and the provincial legislatures to act effectively in their respective spheres. Accepting Canada’s interpretation of the general trade and commerce power would disrupt rather than maintain that balance. Parliament cannot regulate the whole of the securities system simply because aspects of it have a national dimension.”
To reach this conclusion, the court used an antiquated division-of-powers approach and applied hoary precedent (it cites a case from 1881, the Parsons decision, as a leading relevant authority on the scope of the trade and commerce power). As for the argument that the securities market has been so transformed as to make the day-to-day regulation of all aspects of trading in securities a matter of national concern, the court simply rejected it.
What a bad decision! It doesn’t reflect modern business and fiscal reality. It doesn’t deal with crucial policy issues. It used a very traditional form of constitutional analysis when other approaches were available that could have led to a better result. Just when things were looking good, out comes the rug from under our feet.
Philip Slayton has been dean of a law school and senior partner of a major Canadian law firm. His latest book is Mighty Judgment: How the Supreme Court of Canada Runs Your Life. Visit him online at philipslayton.com.
Illustration: Pierre-Paul Pariseau
Illustration: Pierre-Paul Pariseau
The Supreme Court doesn’t just decide those fancy, beloved by the press Charter of Rights cases about civil liberties, police powers, and other headline-grabbing stuff. It still resolves, for example, dull tax disputes between the taxpayer and his avaricious government. It still deals with traditional constitutional fights between different levels of government (there is a surprisingly large number of these cases — they’re almost the court’s bread and butter). Sometimes these apparently tedious decisions, easy to overlook, go to the heart of the country’s economic and business fabric.
Monday, 05 March 2012 08:00

Be the better person

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I’m going to put this out there as a universal truth in the legal profession: at one point, everyone’s been on the other side of the table to another lawyer who’s not been civil. Perhaps it’s been in the courtroom, perhaps just in the hallway, or maybe it was in a letter or a series of letters, or it’s just been during a short phone call. And it seems it doesn’t matter what area of law you practice — civil litigation, corporate-commercial, real estate, family, criminal, immigration law, etc. — there’s always a bad egg out there somewhere. And it’s such a scourge on the profession that law societies, bar associations, and legal academics have tried to tackle the “problem.” But the “problem” really is that rudeness can’t be cured or legislated. “You can’t change an a-hole,” one distinguished member of the bar recently noted at a panel I attended on civility.
While lodging a complaint with the law society against such individuals is an option, the best way to deal with it, according to the above noted panel, is to be the better person. “Don’t be civil because it’s the honourable thing to do, but because it’s strategic.” Too true. The best course is not to engage in a back and forth, be reasonable, be prepared for objections that may come up, and don’t lose your cool.
Ontario Superior Court Justice Susan Healey, who presides in Barrie, Ont., noted that as a judge she sees a tremendous number of lawyers going through the courts, and offered up some invaluable tips on combating incivility and making yourself look good in the process. I will share them because they were good, especially the first one.
• If you’re in court with an a-hole, don’t point it out to the judge. The judge can
pretty much see it for herself.
• Behave well. The more professionalism and integrity you show, the greater
the contrast with the other lawyer.
• Surprise attacks are a bad idea.
• Don’t be dragged down by the combative attitude of the other side.
• Don’t interrupt the judge.
• Don’t talk among yourselves and disregard the judge, you know, who is running
the courtroom.
While her tips above apply to litigators, here are some words of wisdom from Healey that every lawyer should live by: “Arrogance and swagger are not a show
of competence.”
So, as the famous sportswear manufacturer says, “just do it.” Behave well and stay above the fray and both you and your client (not to mention the profession) will benefit.
I’m going to put this out there as a universal truth in the legal profession: at one point, everyone’s been on the other side of the table to another lawyer who’s not been civil. Perhaps it’s been in the courtroom, perhaps just in the hallway, or maybe it was in a letter or a series of letters, or it’s just been during a short phone call. And it seems it doesn’t matter what area of law you practice — civil litigation, corporate-commercial, real estate, family, criminal, immigration law, etc. — there’s always a bad egg out there somewhere. And it’s such a scourge on the profession that law societies, bar associations, and legal academics have tried to tackle the “problem.” But the “problem” really is that rudeness can’t be cured or legislated. “You can’t change an a-hole,” one distinguished member of the bar recently noted at a panel I attended on civility.
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