The Power of Perspectives

The Canadian Bar Association

National Blog

Should ISPs defend the privacy of their clients?

By Yves Faguy January 15 2013 15 January 2013


    Credit: Creative Commons/Deyan Sedlarski (behance.net/rubixstudio)

    TekSavvy Solutions Inc., the internet service provider that – in its own words – “believes in doing the right thing” has come under pretty heavy fire recently for not sufficiently protecting its customers’ privacy.

    It all started late last year when L.A.-based Voltage Pictures filed a motion in the Federal Court of Canada aimed at forcing TekSavvy to disclose the names and addresses of subscribers tied to some 2,000 IP addresses. Why? Because Voltage is seeking compensation for alleged copyright violations by Canadian file-sharers using peer-to-peer networks. So when TekSavvy announced that it would not oppose Voltage’s motion, many admirers of the company were angered that it didn’t mount a more vigorous defense of subscriber privacy.

    Howard Knopf, who represented CIPPIC in a similar case back in 2005 against subscribers of the larger telecoms (Shaw, Rogers, Bell, Telus and Videotron), is one of them:

    Generally speaking, the real issue now is under what circumstances, if any, an ISP is expected or maybe even required to take reasonable steps to safeguard its customers' privacy. If an ISP can successfully and inexpensively oppose an inadequately documented attempt to breach its customers’ privacy, then why should it be able to walk away and leave its customers on their own and just tell them they can hire their own lawyers? It’s the ISP’s duty under the PIPEDA federal privacy legislation to protect its customers’ privacy. That presumably does not mean simply telling them that their privacy is about to breached, that they are on their own and are free to get a second mortgage and hire their own lawyer. ISPs are paid a lot for their services, and one part of their job is to live up to their PIPEDA obligations. ISPs customers pay $25, $50, $60, $80 or more a month and part of their expectation, beyond fast and reliable service, is an expectation of privacy and an expectation that their privacy will be safeguarded – especially if an ISP promotes this aspect to get and retain customers.

    In a later post, Knopf lists three reasons why TekSavvy ought to have taken an active role in opposing the motion:

    1. First, since it is the only entity that can resolve the link between IP addresses and subscriber identities, it is in the best place to challenge the technical evidence that Voltage and its forensics contractor, Canipre, have put forward;

    2. Second, in the BMG case, Telus and Shaw actively stood in opposition to the record labels’ bid to obtain subscribers’ identities on just this ground and TekSavvy should do no less in the present case, especially given that it holds itself out as being more attuned to its subscribers’ interests than its corporate cousins – a point that Koblovsky also relies on heavily;

    3. Third, it is too much to ask of CIPPIC, an organization with a skeletal staff and limited resources, to take the lead in the case.

    But following yesterday’s decision by the Federal Court to grant an adjournment to allow CIPPIC to make its motion to intervene in the proceedings, David Ellis pushes back on the cost issue and defends TekSavvy’s actions:

    First, “if” an ISP can find a cheap way to oppose, etc is worth nothing as a statement of empirical value. If I could fly, I’d spend a lot more time hiking in southern California. Second, let’s update the “inexpensive” part of this with real numbers: [TekSavvy lawyer] Nick McHaffie revealed in court today that TS will be seeking $190,000 in costs from Voltage. [TekSavvy CEO] Marc Gaudrault assures me this figure represents a very conservative accounting of his legal and technical costs to date – and this case is far from over. Third, there’s no way in our system you can oppose a motion for disclosure purely on privacy grounds.

    Several factors led critics to reach wrong-headed conclusions about what TS was or was not doing for its customers. Many took to heart Marc’s statement that TS was not going to “oppose” the Voltage motion. In retrospect, he probably regrets emphasizing this position when TS was in fact working against Voltage on several fronts. Moreover, because that assertion was only the tip of a much larger iceberg, many of these same folks also assumed they knew what TekSavvy’s legal strategy was: cave in and wait for the court order to arrive, then drop all that personal customer info into Voltage’s lap.

    […] For reasons I still don’t get, the critics chose to ignore one obvious way in which TS stuck its neck out to help its customers. They provided notice to everyone who appeared on the charge list – something they were under absolutely no obligation to do. That took a lot of work at a time when TS and its lawyers were hard pressed preparing for the December 17 hearing. This notice provided a service in particular to customers who did not download any of Voltage’s property, giving them a heads-up they might be dragged into a proceeding despite their putative innocence.

    Finally Ellis questions whether TekSavvy really ought to play the role of privacy advocate:

    One of the most frustrating themes in the recent debate has been the insistence that TS must somehow not merely stand up for its customers, but go on the offence as a privacy advocate. Whose privacy are we talking about anyway? Naturally, everyone wants to see the putatively innocent protected from any unjust disclosures. As for those who might turn out to be guilty, who says their privacy wouldn’t be respected as far as public disclosure is concerned?

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    The Supreme Court in 2013

    By Yves Faguy January 10 2013 10 January 2013

      The winter session of the SCC is about to get under way. So we thought it would be a good idea to share this video of Henry Brown of Gowlings discussing the recent niqab case and what to expect in 2013.

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      Furlong's legal predictions for 2013

      By Yves Faguy January 8 2013 8 January 2013

        Happy New Year everyone. To get things going, we asked Jordan Furlong to give us three bold predictions for 2013. He definitely sees more law firm merger activity. And he also expects that the LSUC’s decision late last year to create an alternative to articling is bigger than most people think. But take a look: His third prediction on the diverging interests of law firms and lawyers is perhaps the most interesting one.



        More about Jordan's third point here.

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        Niqab decision reactions

        By Yves Faguy December 20 2012 20 December 2012

          Today’s long-awaited decision in R. v. N.S., on whether an Islamic witness ought to be required to remove her niqab veil to testify in court (in a sexual assault case), was a divided one.

          As usual, Supreme Advocacy has the goods on the key passages of the decision, perhaps best summarized in the following tweet by Errol Mendes (@3mendous) Peter Sankoff (@petersankoff):


          #SCC split on wearing niqab as witness. Majority says "sometimes". Minority says "never". Dissent says "almost always".

          McLachlin wrote for the majority, with Deschamps, Fish and Cromwell concurring. Lebel wrote for the minority. And Abella had her own take.

          Sheema Khan writes that the court managed to strike "a reasonable balance”:

          Rather than an “all” or “none” approach, the court outlined a four-part approach toward answering the question: Should a woman be required to remove her niqab while testifying? This framework will apply on a case-by-case basis, and the result will depend on each case. As the court ruled, no right is absolute. In trying to reconcile the right of religious freedom versus the right to a fair trial, we should consider four questions. Those questions are: Would requiring the witness to remove the niqab while testifying interfere with her religious freedom? Would permitting the witness to wear the niqab while testifying create a serious risk to trial fairness? Is there a way to accommodate both rights and avoid the conflict between them? If not, do the salutary effects of requiring the witness to remove the niqab outweigh the deleterious effects of doing so?

          Emmett McFarlane thinks the decision is vintage McLachlin consensus building, but of the kind that produces “confused decisions”:

          You or I may believe the niqab is an offensive anachronism, predicated on absurd patriarchal notions. But that’s not the point. The point is the niqab is central to the religious convictions of the individual, to their sense of self and their own dignity. It is precisely why the Court has rejected the idea that it would ever analyze the relative value or sensibility of religious practices in its approach to Charter rights, and instead only focus on the sincerity of the beliefs in question. So long as the decision to wear the niqab is made freely, it ought to be respected from a rights perspective. And in weighing so heavily the risks to a fair trial over not just the latitude given to religious freedom, but also the deleterious and societal effects of providing insufficient protection for them, the majority has handed trial courts a messy confluence of rules likely to do more harm than good.

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          My 2012 Clawbies nominations

          By Yves Faguy December 19 2012 19 December 2012

            National has, I confess, arrived a little late at the ball when it comes to blogging (we do appreciate your patience by the way).  But that isn’t to say we haven’t been paying attention to some great writing by legal bloggers.   And so, without further delay, here are my nominations for the 2012 Clawbies:

            1.    Environmental Law and Litigation: Dianne Saxe continues to offer clear, relevant and timely updates  on environmental law and provides reliable and insightful commentary on some of the most important legal issues of the day in her field.  She remains the go-to source for environmental professionals (whether they're lawyers or not).  And the site remains simple,  crisp and at times playful.  She won the award in 2010. If we survive 2012, she should win it again.

            2.    À bon droit:  À bon droit is a fantastic resource for Quebec practitioners.  Any “civiliste”  worth one's salt reads the blog regularly.  If founder and main contributor Karim Renno could clone himself and cover all areas of practice, we wouldn’t need CLE. He gets our second nomination.

            3.    Our third goes to Canadian Charity Law, the project of Mark Blumberg, of Blumberg Segal LLP, a Toronto firm which primarily serves Canadian charities.  According to the site, the average Canadian charity has annual revenue of under $100,000. Mark's efforts are guided by the belief, in his words, “that irrespective of size and budget, legal compliance and ethical conduct on the part of charities is important to maintaining the public’s trusts in the charitable sector.”  So in this regard, the blog has the ambition to improve access to justice. And it seems to be working. People in the non-profit sector swear by this site: “Interesting, prolific and very helpful,” tells me one regular reader.

            There are plenty of other great blogs that deserve mention. For now, I'll just say thanks for making it easy for me to find quality legal information. And to those that I haven't yet discovered, I hope to run into you soon.

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            Our top 12 for '12

            By Yves Faguy December 17 2012 17 December 2012

              It’s been a year full of changes at National and we look forward to what promises to be a fun and fascinating 2013.

              But before we tackle a whole new set of trends and developments in law, we’d like to take this opportunity to revisit some of our best articles from 2012. So, in no particular order, and in the spirit of palindrome and same-number calendar dates that characterized this last year, we offer you our top 12:

              1. The hurting profession
              2. The tipping point
              3. Unwarranted access 
              3. Crime and punishment 
              4. The art of intervention 
              5. In conversation: Alison Redford
              6. The endangered partner
              7. Interview with Jean Chrétien
              8. The law of expedience 
              9. Taking the short view
              10. Licensed to know
              11. So you want to be a judge?
              12. Evidence over ideology

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              CNOOC-Nexen reactions

              By Yves Faguy December 11 2012 11 December 2012

                There's plenty of commentary out there applauding the government's handling of a tricky file. But some dissenting opinions stand out. La Presse’s André Pratte, for one, gives Harper high marks for striking the right balance:

                The signal sent to foreign state investors is clear: Your money is welcome in Canada, provided it doesn’t enable your government to get the upper hand in important sectors of the Canadian economy (Our translation).

                Ibbitson sees a new economic policy brought about by compromise within Tory ranks:

                Not only was caucus largely opposed, the debate within cabinet was intense, with one side favouring an open environment for investment and the other demanding protection for strategic industries, especially from state-owned enterprises in emerging markets.

                Mr. Harper’s solution was to permit the CNOOC/Nexen deal, but with tough new rules requiring reciprocity from countries seeking to invest in Canada, and with special restrictions on state-owned enterprises. Cabinet voted unanimously in favour of that solution. And when caucus was briefed Friday, according to sources, any who still had reservations kept those reservations to themselves
                .

                Coyne, after calling Harper’s foreign takeover policy “murky” and “incoherent”, worries that the central question has been overlooked:

                The real conflict here isn’t between China’s interests and Canada’s, but between one group of Canadian investors and another. The government hopes, by refusing to allow the Canadian owners of certain assets to sell them to China, to pressure China into allowing other Canadian investors to buy assets from them. Certainly it would be preferable if China were to do that. But why should the interests of those Canadian investors, the ones who would like to buy, take precedence over the interests of the others, the ones who would like to sell? Did anyone even stop to ask?

                Meanwhile, the folks at Osler explain the murkiness:

                Interestingly, the New SOE Guidelines do not elaborate upon the nature of specific undertakings that SOEs will be required to give to the government in order to establish a net benefit. For example, the government did not make it mandatory for an SOE to publicly list its shares or those of the Canadian target company on a Canadian exchange. The Prime Minster did indicate that the CNOOC and PETRONAS decisions “will be closely studied”. This suggests both that the undertakings given by these SOEs to the federal government will be disclosed and that the undertakings will have precedential value for other SOEs contemplating reviewable investments.

                It is important to underline that the government has not announced any restrictions on private investment in Canada, and in fact re-confirmed the government’s commitment to liberalize the regime governing such investment by raising the threshold for “net benefit” review under the ICA over a period of four years to $1 billion based on enterprise value rather than asset value. However, the increased threshold will be applicable to private sector investments only. SOEs will be subject to the existing net benefit review threshold of $330 million in asset value (not enterprise value), adjusted annually to reflect the change in nominal gross domestic product in the previous year
                .

                We should note that the Canadian Bar Association sent a letter at the end of May to the House of Commons Standing Committee on Finance recommending, among other things, a requirement in the Investment Canada Act to publicly disclose reasons for Ministerial decisions approving or rejecting an investment. Bottom line:

                “The ability for the Minister to issue opinions is already in the ICA but there is no requirement to disclose the opinions. These opinions – purged of commercially-sensitive information – could form a body of helpful guidance and ensure consistency in the government’s interpretation and enforcement of the Act. There is precedent for this: ICA opinion summaries were issued in the 1980s.”

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                Law firm valuations: Don't forget the liabilities

                By Yves Faguy December 5 2012 5 December 2012

                  Last week, The American Lawyer tried calculating the value of the world’s highest-grossing law firms: 


                  The Global 100 is collectively worth $97 billion, as calculated by our formula, which takes each firm's net profit, makes deductions by assigning equity partners with a notional salary, then applies a multiple based on the firm’s size, average growth rates in revenue and profits, and brand strength. Kirkland & Ellis narrowly edges out Latham & Watkins to head the list with a valuation just shy of $4 billion. In total, 33 firms have valuations exceeding $1 billion. In value per equity partner, Quinn Emanuel Urquhart & Sullivan is the clear leader. Its $1.96 billion valuation puts the effective stakes held by its 111 equity partners at an average worth of more than $17 million — almost $5 million more than any other Global 100 firm.

                  Schumpeter cautions readers to take the rankings “with a grain of salt”:

                  In assigning a multiple of profits to reach a total value, American Lawyer had to make some tricky calls: how to calculate average profit, how to project it years out, how to weight revenue growth versus profit growth, and, perhaps most subjectively, how to assign a multiple based on the firm's brand. The editors gamely lay out how they did all this, admitting that it is impossible to be perfectly scientific. One twist, for example, is that London's elite "Magic Circle" firms were hurt by the weakening of the pound against the dollar in recent years.

                  But perhaps the biggest flaw in this calculation is that it doesn't show what any investor would demand to know when buying a firm: its liabilities. Law firms are small compared to other professional-services firms. The big audit firms, or a public consulting firm like Accenture, have staff numbering in the hundreds of thousands. The biggest law firms are in the single-digit thousands. The smaller size makes them less robust. When hard times hit, money-making partners begin to leave, revenue dries up, and more partners leave in a spiral that can quickly turn fatal. Ask anyone from Dewey & Leboeuf, a firm that ranked 38th in the AmLaw 100 in 2011 in profits per lawyer. What readers of that years' charts didn't know was the size of Dewey's debts, which quickly became unmanageable late last year, forcing the company into bankruptcy in May this year.

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                  A season of epic reinvention

                  By Beverley Spencer December 4 2012 4 December 2012

                    The legal profession is changing. But is the future as dire as some fear? There is plenty of evidence that there is reason for optimism and opportunity for renewal.

                    The repercussions of the 2008 financial crisis continue to reverberate around the globe. But something interesting is emerging: a new sharing economy. As Leo Singer writes in this issue, cash-strapped young people shut out of the traditional economy are learning to create wealth by other means, including the use of time banks to exchange skills — a new twist on the ancient practice of bartering. There’s a move to community ownership, and people without access to traditional sources of capital are using social networks to crowdfund projects ranging from theatre shows to co-working office space.

                    But our laws and legal practices are out of sync with the new realities of the sharing economy. Janet Orsi, a California lawyer who advises social enterprises with unconventional needs, observes that “the reality of most activities in the sharing economy is that they don’t fit into traditional legal boxes and categories.” She believes that transactional lawyers are needed en masse to aid in an “epic reinvention” of our economic system.

                    Meanwhile, a new generation of lawyers is finding meaning working to improve the lives of the disadvantaged. Michael Dempster spoke to Amanda Dodge, winner of the CBA’s inaugural Legal Aid Leader Award. She is the supervising lawyer at Community Legal Assistance Services for Saskatoon Inner City where last year more than 100 students served nearly 700 clients and learned a powerful lesson in the roots of inequality.

                    There will always be a place for lawyers motivated by a passion for change in a world where so much work still needs to be done. That’s a reason for optimism as we enter the season of hope and goodwill.

                    From everyone here at National, best wishes for a joyous holiday season and a peaceful and prosperous new year.

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                    A little good news

                    By Robert Brun December 3 2012 3 December 2012

                      What will the law firm of the future look like?

                      When I attended a meeting of the International Bar Association in Dublin, I wasn’t the only one preoccupied with this question; thoughtful professionals in every jurisdiction, I learned, are wondering what’s next.

                      For years now, we’ve been inundated with information about how the profession is changing — and it hasn’t been a good-news story. Law firms of every size and description are experiencing flat or declining revenue or profit. Around the world, the legal services market is feeling the slowdown in the wake of the financial crisis.

                      The current operating model of most firms is also showing signs of strain. A growing chorus of voices is warning that firms that insist on following an outdated business model risk a meltdown like the one at Dewey & LeBoeuf which saw the global firm — 1,300 lawyers in 12 countries — file for bankruptcy earlier this year. Furthermore, the competition doesn’t look like it used to: non-lawyer providers from other jurisdictions who aren’t subject to the same restrictions want a piece of the pie. Add outsourcing, alternative fee models and technology to the mix and we’re looking at major disruption.

                      Fortunately, firms are starting to embrace new ways of doing things. Here in Canada, firms are experimenting with alternative fee models, trying on project management for size and leveraging technology to gain efficiency. Individual lawyers are using social media as a marketing tool. No one I know is under any illusion that it’s business as usual.

                      The CBA is taking a leadership role in assessing the future market for legal services and in developing tools and strategies to help lawyers succeed. The best way to predict the future is to invent it — and if we don’t, others will. These are challenging times. Working together, we can ensure our future success. Send your comments to cbapres@cba.org.

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                      How much will the union disclosure bill cost?

                      By Yves Faguy November 27 2012 27 November 2012

                        $10.6 million, according to the Canada Revenue Agency.

                        Bill C-377, Russ Hiebert’s private member’s bill that would force extensive public financial disclosures by labour organizations, has always been controversial. Opponents say that, in addition to constitutional and privacy concerns, it boils down to simple union-bashing by trying to set the CRA loose on organized labour. The bill’s supporters say it will bring more accountability and transparency to the way unions operate. (Though private member’s bills historically rarely make it into law, that trend is changing, particularly when bills have the support of the PMO, as is the case here.)

                        Yesterday came news that the Canada Revenue Agency estimates the cost of implementing the bill at $10.6 million in the first two years. In what essentially amounted to a Canadian-style filibuster, the NDP responded by tabling a motion in finance committee calling on the House of Commons to put a stop to the bill.

                        The CBA has already made clear its position that the bill shouldn’t be passed. Here’s a passage from its September 2012 submission to government:

                        As a threshold statement, it is unclear what issue or perceived problem the Bill is intended to address. The Bill mandates greater public disclosure of details of the financial operations of labour unions, and limitations on their political and lobbying activities using mechanisms that could be problematic from a constitutional and a privacy perspective.

                        Specifically, the requirements that unions detail disbursements for political, lobbying and collective bargaining activities could violate freedom of expression and freedom of association rights under the Charter. In terms of privacy, the bill forces disclosure of what might be considered sensitive personal information – “financial information and information about political activities or political beliefs.” Here’s what CBA Privacy Law Section Chair Mike Mazzuca (a Partner at Koskie Minsky LLP) told the Commons finance committee on October 25 (his statement begins around the 40 minute mark in the proceedings):

                        “To the extent that the bill requires the reporting and making publicly available details of salary benefits for all officers, directors, trustees and employees (of labour groups), we believe it would infringe upon privacy concerns and existing privacy laws.”

                        Ultimately, the CBA’s overriding point is this: Federal and provincial labour laws already require unions to disclose, for the benefit of their members, regular and extensive financial statements. So, should governance and transparency really be a matter of general concern to the public as well? Should they be more so than they are for closed corporations, which are accountable to their shareholders? Again, from the CBA’s submission:

                        The additional cost of administration to meet the Bill’s requirements would be significant. Unions could be forced to raise dues or reduce services to their members. If dues are raised, unions may in turn seek higher wages to compensate members, potentially resulting in increased costs for employers. Finally, the federal government could also be subject to significant new costs to administer its own obligations under the Bill.

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                        Inside Canada-EU trade talks

                        By Yves Faguy November 26 2012 26 November 2012

                          It isn't always easy gaining insight into how trade negotiations are conducted, which is why these leaked documents prepared fro EU negotiators makes for a good read. Michael Geist and Paul Wells both offer up strong analyses of the document, which had one of Quebec’s opposition parties wringing its hands last week. But what seems clear is that there is still plenty of daylight between each party’s positions, whether it’s on patent protection for brand name pharmaceuticals, supply management, rules of origins for a wide range of goods and cultural protections.

                          That said, EU negotiators seem to be broadly satisfied about progress on access to Canada’s public procurement market, however controversial Canada’s concessions might be among the provinces. Also it seems clear that concessions on supply management rules will be limited for both sides, as “there is agreement that these products will not be totally liberalised.”

                          Perhaps the most interesting comment in the memo is the one that gets to the pith and substance of what’s at stake for both parties:

                          Overall, our key challenge remains that our list of offensive interests is larger than the Canadian one, which puts Canada at a tactical advantage in the end game. On the other hand, Canada will, at this point, also have to take into consideration that the EU market to which it gains preferential access is much larger than its own. The proposed landing zones have also been looked at from the perspective of the fall-out on future negotiations, in particular the US.

                          Geist picks up on this last point:

                          Investor protection is another major stumbling block, particularly since the EU is concerned that the Canadian agreement will establish a precedent for a possible future deal with the United States. For example, Canada wants reduced investor protection in the financial services sector, which the EU says is unacceptable. Canada also wants the right to expropriate without compensation to pursue "legitimate" policy objectives, an approach the EU will not accept. Further, there are major disagreements over the structure and applicability of an investor-to-state dispute settlement mechanism.

                          It also hasn’t escaped anyone’s attention that, with respect to investment market access, “the primary target remains exempting EU investors from the Investment Canada Act” and its (as yet to be fully fleshed out) net benefit test.

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