A recent U.S. court decision reminds us of the importance of considering potential third-party-beneficiary issues when drafting contractual indemnity provisions in Canada. On March 3, the New York Supreme Court (Appellate Division) upheld a lower court decision giving Diamond Castle Partners, a U.S. private equity firm, the right to sue IAC/InterActiveCorp. for damages for breach of representations IAC made in connection with the sale of its subsidiary, PRC LP, in late 2006. Diamond Castle was not a party to the purchase agreement. Instead, the representations were made to Panther/DCP Acquisition LLC, an affiliate of Diamond Castle formed for purposes of completing the acquisition. After the deal closed, PRC and Panther merged. In January 2008, PRC filed for bankruptcy and Diamond Castle’s equity interest in PRC was extinguished as part of the ensuing reorganization.
For both partners and associates at law firms, it’s all about the money. And I don’t mean that in a derogatory way. The way lawyers get paid and earn revenue is at the heart of most law firms. Every law firm — no matter what type of law you practise, where you are located, or how many people there are in your firm — needs to make money in order to stay afloat. But you may be surprised at how “shy” Canadian lawyers are to talk about money.
|Illustration: Dushan Milic|
I’m not going to opine about who was wrong or right in the conflagration between the Canadian Bar Association and the former board and executive director of the Canadian Corporate Counsel Association, the topic of this month’s cover story, “Fighting for independence.” All I can say is that it has not been pretty, but at the end of the day, here’s hoping that corporate counsel end up benefiting from it.
In mid-March, Ontario Attorney General Chris Bentley said in an interview with the Canadian Press that he was open to the idea of putting cameras in the courtroom and wanted to canvass judges, prosecutors, and defence counsel on their thoughts about it. “I’m interested in the views of people as to whether we should move forward,” he said. “I’m open.”
|Illustration: Todd Julie|
I am not a fan of the public inquiry. Misplaced, in my opinion, is the ever-growing enthusiasm for aggrieved or unsatisfied parties to sound the clarion call for the expenditure of public funds to eventually provide a report that often doesn’t result in either action or improvements, because it ends up ignored by politicians or the organization it is aimed at. Names are rarely named and fault even more infrequently apportioned. Reports and recommendations sit on the shelf collecting dust, generally wasting the taxpayers’ outlay and not giving much satisfaction to anyone. Although, they do provide interesting work for lawyers.
Former Quebec Justice minister Marc Bellemare did not hear what he wanted to in the report from Michel Bastarache into the appointment of judges in Quebec. In his report released Jan. 16, the former Supreme Court of Canada judge concluded that Bellemare was not pressured by third parties to appoint judges to the Court of Quebec. Most coverage of the report centred on how it essentially cleared Premier Jean Charest of influence peddling. Bellemare, the next day, was already claiming Bastarache was biased and that the report should have laid some blame on Charest’s shoulders. The political fallout from the report and its impact on Charest and the Quebec Liberal Party’s fortunes remain to be seen.