Legal Feeds Blog
Are passengers in automobiles “using” those vehicles? If a recent decision at the British Columbia Court of Appeal stands, they indeed are — and that legislative interpretation could have repercussions for the auto insurance industry.
|Lawyer Douglas MacAdams says the decision clarifies law that has been “murky and contentious for many, many years, and to the benefit of the injured.”|
The incident occurred in July 2006, as the appellant, Marnetta Felix, drove her drunken and argumentative boyfriend, Kevin Hearne, home on the highway. A couple of times, Hearne grabbed the steering wheel, apparently trying to scare his girlfriend.
When he grabbed the wheel the third time, however, Hearne pulled it and crashed the car, killing himself and seriously injuring Felix.
What did legislature intend?
Felix sued Hearne’s estate and won a judgment of $792,000 plus costs and then brought an action against the Insurance Corporation of British Columbia for indemnification. The B.C. Supreme Court, however, sided with the public insurance administrator, citing specific regulations that seemingly exclude such incidents.
That decision was struck down yesterday by the BCCA in a unanimous ruling written by Justice Elizabeth Bennett, who expanded the contextual scope of the case by citing continual amendments indicating the legislature’s intent to provide universal, comprehensive coverage in all incidents involving motor vehicles.
In 1975, for example, the province’s regulations defined an insured person as “a [licensed] driver . . . who operates or drives . . . with consent”; in 1984, the licensing requirement was dropped and the definition was broadened as “an individual who with . . . consent . . . operates the vehicle”; and in 2001, the definition was broadened further as “an individual who with consent . . . uses or operates the vehicle.”
The introduction of the word “uses,” to Bennett’s mind, demonstrates a clear intention by the province to include non-drivers in the vehicle.
“‘Use’ is general enough to include a passenger passively using a motor vehicle for transportation. . . . [The relevant provisions] exemplify the intention of the legislature to create a universal insurance scheme to address the identified public policy interest.”
Case law: unusual auto injuries
Bennett goes on to cite a couple of other cases where indemnification was provided in unusual motor vehicle incidents. In Citadel General Assurance v. Vytlingam, insurance was provided for a man who suffered injuries resulting from large rocks that had been dropped from an overpass. In Amos v. ICBC, meanwhile, a man was insured for injuries sustained during an attempted carjacking.
Douglas MacAdams, who represented Felix before the BCCA, says his case also benefited from the 2014 decision in Niedermeyer v. Charlton, in which a tour operator claimed he was absolved of liability in a car crash because his extreme-sports-loving passengers had signed a waiver. The courts, needless to say, disagreed.
“The court of appeal used that case as a way to speak lovingly and comprehensively about the B.C. automobile insurance program,” says MacAdams. “That certainly put the wind in my sails.”
These cases, coupled with amendments that have consistently broadened coverage for motor vehicle users in the province, were enough to win the day for the appellant.
“The word ‘use’ is to be considered in the context of the legislative scheme to provide ‘access to compensation for those who suffer losses’ as a result of a motor vehicle accident, along with the legislative history, context and jurisprudence noted above.”
“While a passenger, or user, in a moving automobile, Mr. Hearne grabbed the steering wheel causing the accident that led to Ms. Felix’s injuries. . . . There is, in my view, a clear unbroken chain of causation from his negligent act to her injuries.”
MacAdams says the decision clarifies law that has been “murky and contentious for many, many years, and to the benefit of the injured.” Further, he notes that it will have implications not only for public insurance schemes operating in B.C., Saskatchewan, Manitoba, and Quebec, but also for the private auto insurance industry.
“As I understand it,” he says, “most insurance documentation across the country includes some formula that has in it the word ‘use’ so I think, yes, lawyers in other provinces are going to pick up Felix and say, ‘Hey look at this.’”
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The next year will see increased hiring activity in the Canadian legal market and lawyers can expect a 2.7-per-cent overall uptick in salaries, according to a new survey by Robert Half Legal salary guide.
|Business law, privacy & data security, ethics and corporate governance, and family law predicted to be growth areas for legal jobs in 2016. Source: Robert Half Legal 2016 Salary Guide|
Law firm lawyers with 10 years of experience should expect an even greater raise, the guide says, but demand is on the rise for in-house counsel as well.
“Corporate legal departments are responding to increasing business demands and adding staff at every level to address legal work related to compliance requirements, contract administration and industry-specific issues,” according to the guide, which says technology, financial services, energy, and insurance are among sectors that have seen increased hiring.
The “candidate-driven market” is a result of high demand for specialized legal skillsets, says Gene Roberts, division director of Robert Half Legal in Toronto. “It’s making those people who have those specialized legal talents far more in demand because of the breadth of things they can kind of take on,” he says.
Legal professionals with specialized skills are often receiving competitive counter-offers, said Charles Volkert, executive director of Robert Half Legal.
“Employers who are reluctant to offer competitive compensation packages or expedite the hiring process risk losing highly sought-after legal professionals to other organizations,” he said.
When it comes to legal specialists, e-discovery experts are going to see the largest gains in their annual base compensation, Robert Half also predicts. Litigation Support and e-discovery directors with 10 or more years of experience will see a 5.8-per-cent uptick in pay next year, with salaries expected to be in the range of $98,500 to $129,750.
“As litigation becomes far more intricate and complicated, these matters are starting to see a lot more attention and a lot more hands-on work,” Roberts says, adding that law firms and law departments are seeking professional help to do collection and review work in cost-effective ways.
Firms “are seeing that sometimes it makes more sense to have a specialized team of e-discovery lawyers come in to do a document review rather than having articling students or [junior] associates handling these absolutely massive and complicated matters,” Roberts adds.
By the numbers:
• Average starting salaries for lawyers at law firms are expected to increase 3.5 per cent in 2016.
• Lawyers with 10 or more years of experience working at a midsize law firm (35 to 75 lawyers) are expected to see a pay increase of 4.5 per cent from 2015. That’s an average range of $165,250 to $233,500 annually.
• At a small-to-midsize law firm (10 to 35 lawyers), lawyers with 10 or more years of experience should see starting salaries go up by 4.2 per cent to the range of $139,750 to $203,250 per year.
• First-year associates in big firms (75 lawyers or more) are expected to earn between $87,250 and $99,750, a 3-per-cent increase over Robert Half Legal’s 2015 projections.
• In-house counsel are projected to see an average raise of 2.9 per cent from 2015. Pay for corporate lawyers with four to nine years of experience at large companies (more than $250 million in revenue) is expected to go up by 3.3 per cent to the range of $149,500 to $246,000 annually.
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- More money allows for expansion of criminal, employment, and other legal services
Every student legal aid clinic in Ontario is about to get a $100,000 annual funding boost.
|Windsor's Marion Overholt says her clinic will use the funds to expand coverage in the areas of small claims, consumer issues, and wrongful dismissal claims.|
One of them is the Queen’s Legal Aid Clinic in Kingston, Ont. It facilitates learning for 90 law students with 50 more working for the specialized clinics under its umbrella.
“We are very pleased for Queen’s Legal Aid to have these funds. Law students take pride in providing high-quality legal services and it’s going to our community, which could not otherwise access the rates,” says Jana Mills, acting senior review counsel at Queen’s Legal Aid.
“We are going to expand our current areas of service to include applications to the Human Rights Tribunal of Ontario and expand representation in employment law cases.”
They also expect to expand all services. Public legal education outreach and initiative will help residents of Kingston “avoid unnecessary and expensive legal interventions,” says Mills. Additionally, new case workers will also be trained and a third review counsel will be hired.
The money will help provide technology and enhance the legal learning process for law students and clients, says Mills. Interviewing via Skype and a new database should streamline legal work she explains.
“It gives the students an opportunity to help... a vulnerable population [while] at the same time receiving hands-on experience,” she says.
Community legal services at the University of Windsor plans to expand the number of review counsel “who will be able to work exclusively in the area of small claims, looking at consumer data issues and wrongful dismissal claims,” says Marion Overholt, executive director of Legal Assistance of Windsor, Community Legal Aid.
Windsor and Essex County have one of the highest unemployment rates, she explains.
“As a result we have seen a rise in situations of precarious employment, so being able to offer workers who lose their job an opportunity to consult with us and determine if they have a claim in terms of wrongful dismissal, that will be beneficial to the community,” says Overholt.
Furthermore, the money will benefit the more vulnerable population, which often becomes tied in contracts detrimental to their interest. Due to the area’s high unemployment rates, pay-day loans and similar schemes are especially rampant in the community, explains Overholt
“This additional money is allowing the review counsel to look at consumer debt situations. [We] will be doing a number of public education workshops advising consumers, particularly seniors [and] newcomers, what their rights are under consumer-protection legislation,” she says “We are really excited that we will be able to broaden our services to the low income community.”
About 90 volunteer law students stand to reap the benefits of working on the extra caseload.
Margaret Capes, counsel at Community Legal Services with Western University in London, Ont., says legal aid revolves around three core areas of law at her clinic, including civil, housing, and criminal.
“We are using this money to increase our overall number of clients we can take in all of those areas, in particular criminal law,” says Capes.
Additionally the clinic is able to hire an articling student this year to help with the additional workload in the criminal law area, as well as a part-time lawyer to assist the full-time criminal lawyer she notes.
“The law students will be able to have a variety of different files to work on while they are with us,” says Capes “the more files we are able to open, the more broad range of types of cases that they can be potentially exposed to.”
The funds may also be used to provide additional administrative assistance to the family law lawyer she adds.
The Community Legal Clinic at the University of Ottawa plans to enhance services in the landlord and tenants agreements.
“It’s the area of law where we have the most demand for services, so often we were not able to provide full representation, we were only in a position to offer summary advice,” says Louise Toone, executive director of the clinic.
While the self-help type of service was useful to some, full representation is certainly an improvement.
“A lot of our clients are either recent immigrants, they don’t speak French or English very well or they have mental health problems, so the kinds of clients who really need representation,” Toone.
Besides legal advice and potential for legal representations the clinic also focuses on educating the vulnerable community members.
“We do a lot of community education,” says Toone. Approximately 100 presentations per year are hosted by the clinic in collaboration with various partners. “We do sessions on legal rights on different topics like discrimination at work or housing.”
Approximately 60 law students enrolled at Ottawa’s Faculty of Law will have a chance to help with the cases during the school year.
As Canadian corporate legal departments continue to grow in size, collecting data about spending and benchmarking against how others perform is becoming “table stakes,” a room of in-house lawyers heard Monday.
|David Aylward advocates the use of e-billing and matter management software for data collection.|
Bindu Cudjoe, deputy general counsel and chief administrative officer with BMO, said there has been a “fundamental shift” in terms of legal department focus on how external firms are bringing value to their clients.
“Thank you for the glossy brochures, bios, and information on where you are ranked with Chambers, but the point is how are you going to help us demonstrate value?” she asked, referencing the revolution around value-based billing, alternative fee arrangements, and disaggregation of legal services.
Both Cudjoe and David Aylward, senior business manager with RBC, spoke to the challenges of going through the process of consolidating the number of law firms their organizations use and the reaction from internal clients. In particular, they discussed the difficulty in convincing internal users that a firm they have long worked with is no longer on the roster because they simply don’t measure up.
“We have the lash wounds from doing that with internal customers,” says Aylward. “It’s tough to try and pull away the firms they love working with but you have to tell the story and explain why.”
Cudjoe said it requires considerable communication throughout the process about what historical costs have on things such as settlements with firms that didn’t make the cut as well as other factors.
“We just talk about it ad nauseam,” she said. “They say ‘But they’re my neighbour’ or ‘They’re good guys,’ or ‘They took me to dinner last week’ or ‘We’ve been using them for 20 years.’ Instead, we look at how innovative they are and what kind of technology they use. It’s a conversation.”
Also on the panel was Matthew Den Ouden, vice president with Huron Consulting Group Inc., who suggested legal departments share the historical billing data they gather about their outside firms to enable a more informed conversation.
“You will be amazed at the attention you will get from your firm when you have information about how you are working with them. It helps them see what you know about them. Many are gathering the data, but telling the story to the firm is the key as well,” he said.
To help in the data gathering, Aylward is a strong advocate of the adoption of e-billing and matter management software.
“E-billing is invaluable in helping you tell that external story,” he said.
Den Ouden noted if a department has more than $5 million in outside firm spending a system can net a return on your investment fairly quickly.
And law firms have been more than accommodating to in-house departments that purchase billing software. It is not uncommon for law firms to have 10 or more different e-billing systems running to accommodate clients.
Aylward emphasized the importance of doing due diligence on e-billing providers and understanding that a system can be good for providing intelligence data but not as good at measuring the outcome of a strategy.
However, he said looking at cycle times for cases can bring a “discipline” to the business of the law department and is a good story to tell to senior management.
“A certain kind of file might take six to 14 months but as long as you know that it breeds a certain credibility,” he said.
When it comes to benchmarking, Cudjoe said it’s important to also measure your department against like-sized organizations and industries/sectors.
“I look at what are my legal costs compared to insurance companies or the Canadian operations of a bank here,” she said.
Benchmarks can also be a double-edged sword. While initially departments will be able to see how they are cutting costs or finding efficiencies, eventually there will be a “tipping point” and can become just another target for finance to pull out for discussion if costs go up or stay stagnant.
Den Ouden advised to be realistic and initially look for areas that as lawyers, in-house can take aim at and see real results.
“Ask ‘What are the things I can change? What are the levers I can pull?’ Keep your eye on the things you can make a difference on,” he said.
Aylward said while it may be tough to do with smaller departments or for those who are the “only legal officer,” in-house lawyers need to take an interest in the data collection on billings and how matters are being handled from an efficiency perspective.
“Get involved in how your department is evolving. Jump in. Move away from only doing law,” he said.
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The Ontario Court of Appeal has upheld a decision to strike a defamation claim against a well-known personal injury lawyer in London, Ont., over statements about a case against a local obstetrician and gynecologist.
The case, Frank v. Legate, dealt with six statements posted on posted on the web site of lawyer Barbara Legate’s firm, Legate & Associates LLP, as well as a seventh statement on the CTV news web site, about civil and disciplinary action against Dr. Cathy Frank.
“If you think you or your baby may have a claim against Dr. Frank, please contact Legate & Associates,” reads one of the statements.
Another statement noted more than 100 former patients of Frank had contacted the firm and pointed out it had, at the time, issued 58 claims in Ontario Superior Court. Two of the statements made reference to “compromised babies” and the fact “children have been born with disabilities that they wouldn’t otherwise have had.”
Besides the defamation claim against Legate, her firm, and two other lawyers who represented the former patients, Frank also sued for malicious prosecution, champerty and maintenance, and intentional interference with economic relations and infliction of mental distress. She claimed $5 million in damages, including $500,000 as a punitive award.
Last August, Superior Court Justice Thomas Carey struck Frank’s claim, finding it didn’t disclose a reasonable cause of action. Frank appealed, arguing, among other things, that a court should only strike a defamation claim on a Rule 21 motion where the statements are clearly not capable of a defamatory meaning. The statements at issue, she argued, don’t fall within the clearest of cases.
But on Friday, the appeal court upheld Carey’s decision. Five of the statements, wrote Justice William Hourigan on behalf of a three-judge panel, “were purely informational and did not comment in any way on the merits of the ongoing litigation.”
The comments, he added, were “neutral in their description of the appellant. References to the numerous women who have come forward are supported by the appellant’s own pleading, which indicates that 58 actions have been commenced against her. No reasonable person, who is taken to understand the difference between allegations and proof of guilt, could interpret these statements in the manner suggested by the appellant (i.e. as suggestive of her being negligent and/or incompetent as a physician).”
In his findings, Hourigan also noted a bigger issue was at stake: “The appellant effectively seeks to prohibit law firms from describing allegations that form the basis of potential or ongoing claims. If this type of statement amounted to defamation, no law firm in the province could ever solicit clients because they could not provide the necessary information for people to determine if they should consult a lawyer about a potential claim. The class action process, for example, would be effectively eviscerated if lawyers were restricted in their communications in the manner urged upon us by the appellant.”
Paul Michell, the litigator at Lax O'Sullivan Scott Lisus LLP who acted for Legate and the other defendants, says he could find no other Canadian cases that involved similar circumstances and allegations.
"The Court of Appeal was concerned that, if accepted, it would severely restrict the ability of firms to communicate with potential clients," he says.
As a result, the appeal court dismissed Frank’s appeal and awarded the defendants $12,500 in costs.
Update 4:30 pm: Comments from Paul Michell added.
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Snowbirds flying south and Yanks coming north will have to watch their financial Ps and Qs a little closer.
|The Federal Court declined to issue an injunction to prevent the automatic exchange of financial information between Canada and the U.S. (Photo: Shutterstock)|
Tax lawyer Roy Berg, of Moodys Gartner Tax Law in Calgary, has been keeping close tabs on the case, one brought forth in August 2014 by Vancouver’s Virginia Hillis and Gwendolyn Deegan.
“The plaintiffs’ arguments were innovative and creative, but were apparently not enough to convince the court to issue the injunction,” he said.
“I imagine there is a great feeling of relief within the Canadian banking industry because if the plaintiffs had been successful in enjoining the exchange of information, that would have cast into doubt whether the IGA could be given effect in Canada; and without the IGA, Canadian banks could have been subject to the full weight and force of FATCA, which would have been much worse.”
The plaintiff duo unsuccessfully argued that the FATCA violates the Canadian Charter of Rights and Freedoms and their right to security of person and against unreasonable search and seizure. In a press release about their case, they say they both left the U.S. at age five to live in Canada, never obtained a U.S. passport or developed meaningful ties with the U.S., but are considered “tax cheats” by the U.S. because they are not IRS compliant.
“I am a proud Canadian. Why is my government branding me with being a potential U.S. tax evader merely because of my place of birth — and turning my personal information over to a foreign government’s jurisdiction,” Hillis said in the release.
Berg says the ruling means the transfer of information between Canada and the U.S., currently scheduled for Sept. 23, will proceed as planned unless the plaintiffs are successful in obtaining an interlocutory ruling from the Federal Court of Appeal before that time.
“Given the short amount of time before the information is scheduled to be exchanged, it is unlikely an appeal will be heard and decision rendered,” says Berg.
He added the court did not rule on whether the IGA or the Canadian implementing legislation violates the Constitution or and those issues will be determined in another trial scheduled for late 2016.
He said the ruling means come the 23rd banks will start transferring financial information on about one million U.S. citizens living in the Great White North and those Snowbirds who live part-time in the U.S.
“If the information is exchanged with the U.S. before an appellate decision is rendered, the plaintiffs’ case, at least as it relates to the treaty arguments, will become moot,” Berg added.
“[But] the court noted that even if it did find a violation of the treaty or Canadian law, it questioned whether it had the authority to issue an injunction in the light of the plaintiff’s ability to simply renounce their U.S. citizenship or request relief from either CRA or IRS.”
Update Sept. 30:
Although the expected Sept. 23 transmission of tax information between the U.S. and Canada was delayed, it will go ahead today, Sept. 30.
Information on approximately 155,000 U.S. citizen accounts will be transferred to the IRS, says Berg.
As of Sept. 30, the Federal Court of Appeal had not ruled on a motion to prevent the transfer of information between Canada and the US pursuant to FATCA and the US-Canada IGA. The court was asked to prevent the transfer of information because of a Sept. 16 ruling of the Federal Court that denied the same request, but Berg says the door is now open for that transfer to take place.
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