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Whatcott reactions

By Yves Faguy February 27 2013 27 February 2013

    It took 16 months for the Supreme Court to release its unanimous decision in Whatcott. Though predictably, reactions split both ways. Here’s the bottom line from a somewhat disappointed Jonathan Kay:

    The Supreme Court of Canada’s decision in the case of Saskatchewan Human Rights Commission v. Whatcott can’t be considered a win for free-speech champions — especially religious conservatives. But nor is it an outright victory for human-rights censors. By reaffirming that human rights commissions cannot punish speech that merely “ridicules, belittles or otherwise affronts the dignity of” an alleged victim group, the Court struck a measured blow against political correctness.

    Charlie Gillis writes that the compromise was inevitable. And yet:

    To me, their decision to stand-pat represents a missed opportunity to erect robust legal protections around a bedrock Canadian value. And yes, my employer has a stake in this. But if we learned anything from the Maclean’s-Ezra Levant human-rights fiascos, it’s that the rights process is too blunt, too one-sided an instrument to deal with such a sensitive issue as speech.

    A couple of other thoughts: all eyes should now turn to the provinces that have anti-hate speech provisions in their human rights codes, some of whose leaders have echoed the above-stated qualms. They’ve been sitting on the sidelines to see whether Whatcott would give them the cover needed to do the right thing, and now the onus is on them.

    (More after the jump)

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    Shareholder activism: Is it going too far?

    By Yves Faguy February 26 2013 26 February 2013

      National recently had an item on shareholder activism and the substantial increase in proxy fights in Canada. Walied Soliman, a partner with Norton Rose is quoted in the article as saying he has been involved in some 40 proxy battles over the past three or four years. What’s more, he believes we’ll see the number of proxy fights increase in Canada “mainly because there’s evidence of success.”

      Well the big success story in New York, and perhaps a harbinger of things to come in Canada, is last week’s ruling by a federal court judge in favour of hedge fund manager David Einhorn in his legal battle against Apple. Einhorn is trying to pressure the company into distributing some of its massive cash reserves to shareholders through the issuance of (cutely-named and) dividend-paying iPrefs. Apple responded by trying to limit its ability to issue preferred shares by submitting a bundled proposal that was supposed to be put to a vote at this week's annual shareholder meeting. But the judge rejected the actual bundling of the proposal with other poposals.

      Admittedly, the win is no more than a procedural – some might say “trivial” – one for Einhorn. Nevertheless, Andrew Ross Sorkin looks at the big picture (Einhorn’s attempt to force Apple to distribute its cash) with an interesting column today on abuses of shareholder power (more after the jump).

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      A new blogger at National

      By Yves Faguy February 25 2013 25 February 2013

        National is proud to welcome a new blogger joining its ranks. Cyndee Todgham Cherniak is an international trade and sales tax lawyer at LexSage Professional Corporation and has 20 years of experience working at national law firms. She also happens to chair the CBA’s National Commodity Tax, Customs & Trade Section. She loves writing, knows her stuff and we’re delighted to have her on board. You can also read her here, here, here and here.

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        SOGIC on Trinity Western University's law school bid

        By Yves Faguy February 25 2013 25 February 2013

          As you might have heard, there’s a battle brewing in the world of legal education, as Trinity Western University, a Christian faith-based institution, is seeking approval to open a new law school.
          It’s up to the Federation of Canadian Law Societies to decide whether it will accept the university's law degree as an acceptable qualification for applying for a  license to practice law in a Canadian province. But by the Council of Canadian Law Deans has argued that the school should not receive formal accreditation, on the grounds that it would discriminate against gays and lesbians. As such, critics say, opening a law school at TWU is antithetical to fundamental legal values, and they question the school’s ability to uphold academic freedom in an environment in which students are required to sign a faith statement.

          Last week at the CBA’s Midwinter Council meeting in Mont-Tremblant, the CBA’S Sexual Orientation and Gender Identity Conference (SOGIC) raised some of these issues and spoke out for the need to engage in constructive with dialog with the Federation.  Here's a clip from co-chair Amy Sakalauskas:

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          The pursuit of happiness

          By Cyndee Todgham Cherniak February 24 2013 24 February 2013

            The U.S. Declaration of Independence signed on July 4, 1776 includes the following statement:

            “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”

            What lesson should lawyers take away from this statement?

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            Splitting the roles of the GC and the chief compliance officer?

            By Yves Faguy February 19 2013 19 February 2013

              The separation of powers versus the combining of roles between general counsel and the chief compliance officer has become, over the years, the subject of heated debate. Michael W. Peregrine, a partner at the U.S. law firm McDermott Will & Emery, discusses lessons learned from JP Morgan’s $6-billion trading loss last year. The bank’s internal analysis revealed that its risk policy committee hadn’t been made aware (in a timely manner that is) of the full extent of the risks related to bets made by the bank on credit derivatives. Peregrine takes note of one particular recommendation from the report that should be of interest to those responsible for risk oversight practices:

              One of the most direct recommendations in the report relates to the independence of compliance and risk managers. An emerging view is that these managers should now report directly to the chief executive and not to a company’s general counsel. (Last month, JPMorgan said it had changed the chain of command so that its head of global compliance and regulatory management will report directly to the bank’s chief operating officers).
              Moreover, the title and compensation of compliance and risk officers should command the same heft and responsibility of the post. Also proposed is a greater link between executive compensation and satisfaction of the board’s risk reporting standards.

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              Why are securities class action filings dropping?

              By Yves Faguy February 17 2013 17 February 2013

                NERA Economic Consulting reported last week that the number of securities class action cases filed in Canada dropped from 15 in 2011 to nine in 2012. It’s hard to draw comparisons with trends in the U.S., given the much smaller sample size. Nevertheless:

                In previous years, trends in US securities class action filings have tended to be reflected in Canadian filings. For example, last year we noted that the three Canadian filings against Chinese companies with securities listed on North American exchanges—Sino-Forest, Cathay Forest Products, and Zungui Haixi Corporation—reflected one of the trends driving filings in the US. Trends in US filings from 2008 to 2010 relating to options manipulation, Ponzi schemes, and the credit crisis were also reflected to some extent in Canadian filings.

                In 2012, the abatement of these recent trends was evident on both sides of the border. In the US, only four cases filed in 2012 related to the credit crisis (down from a high of 103 in 2008), none of the filed cases involved allegations of a Ponzi scheme, and only 16 cases were filed against Chinese-domiciled companies (down from 37 in 2011).5 In Canada none of the cases filed in 2012 related to any of these trends.

                Dimitri Lascaris and Daniel Bach run through the possible explanations behind the drop, from limited resources on the side of the plaintiffs’ bar to recent court decisions that have “caused some plaintiffs’ firms to become more reluctant to pursue securities class actions.” Ultimately the two authors propose another explanation:

                The reforms to the Securities Act are working. Fresh research in the United States by professors Stephen Choi, of the New York University School of Law, and Adam Pritchard, of the University of Michigan Law School, shows that securities class actions provide at least as much deterrent – if not more – than enforcement actions by the U.S. Securities and Exchange Commission. We believe that the spectre of multimillion-dollar lawsuits, years of litigation and reputational damage to culpable defendants have helped deter stock fraud. We believe that there are fewer filings because there are fewer good cases, and there are fewer good cases because more of Ontario’s public companies are complying with their disclosure obligations. This is precisely what Ontario intended when it modernized the Securities Act in 2005.

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                Insolvency and environmental clean-up costs

                By Yves Faguy February 13 2013 13 February 2013

                  After last week’s post on the Indalex case, we caught up recently with Dianne Saxe of Saxe Law Office in Toronto, and asked her to comment on another recent SCC insolvency ruling (from December), in Newfoundland and Labrador v. AbitibiBowater Inc.

                  Whereas the Indalex ruling hung on the conflict between insolvency law and pension law, the AbitibiBowater case presented the challenge of deciding whether the government of N&L could force an insolvent AbitibiBowater, which had obtained a stay of proceedings under the Companies’ Creditors Arrangement Act, to pay for an environmental clean-up ordered by the province. The SCC ruled that the province’s environmental claim has to be paid in accordance with federal insolvency law.

                  We asked Saxe in this video to explain what the impact of the decision will be for the provinces, taxpayers and companies that are still in operation. And sticking to the theme of who should pay for clean-up costs when polluting companies become insolvent, Saxe also raises a few red flags about the attempt by the Ministry of the Environment in Ontario to force directors of what was formerly Northstar Aerospace (now out of business) to cover clean-up costs related to contamination dating back to before they were appointed.


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                  The Indalex ruling explained

                  By Yves Faguy February 4 2013 4 February 2013

                    Rachel Arbour of Hicks Morley in Toronto answers our questions about the Indalex ruling, handed down by the Supreme Court last week, and what it means for both pensioners and plan sponsors:

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                    The royal baby bill: Do the provinces have a say?

                    By Yves Faguy January 31 2013 31 January 2013

                      There have been some amusing exchanges in the twitterverse over the law introduced in the House of Commons today aimed at changing the royal succession rules to make them compatible with announced changes to those in the UK. The question for many has been whether Canada’s assent is enough to incorporate the new rules into our own laws or whether we need a full-blown constitutional amendment. Scholars will certainly get a kick out of this paper by Anne Twomey of the University of Sidney (hat tip: Philippe Lagassé), who takes us from the pre-Statute of Westminster days, through the abdication crisis of 1936 and up until today. But first here’s some context explaining why both the Gordon Brown and David Cameron governments have treaded carefully with the matter of changing the laws of succession in the first place:

                      One of the notable aspects of the debate on this Bill was the confusion about whether all Commonwealth countries would have to be consulted about it, or whether consultation was confined to the 15 other Realms. It was even suggested that all the British overseas territories would have to be consulted, as well as devolved administrations, such as Scotland. There was also confusion about whether mere consultation was required, which could be done by a phone call, or whether the Parliament of each of these polities would have to legislate prior to the United Kingdom Parliament enacting its legislation.

                      The problem, Twomey explains, lies in the wording of the Statute of Westminster (more after the jump).

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                      A new era of collaboration

                      By Robert Brun January 31 2013 31 January 2013

                        I had the great pleasure recently of speaking at the swearing-in ceremony of Mr. Justice Richard Wagner of the Supreme Court of Canada. 
                        As one might expect, our newest appointee to the top court has impeccable credentials. But what really struck me about his legal career is this: Richard Wagner is a man who does not back down from a challenge. That’s why I wasn’t surprised to read that not long after his swearing-in, he sounded a warning to government and the judiciary about access to justice.
                        Justice, he told The Globe and Mail, is quickly becoming beyond the reach of many Canadians. Furthermore, the failure to ensure access to justice can create serious problems for democracy. “What we see is a common problem across the provinces,” he said. “First of all, we should talk to each other.” He is calling for a national summit that would bring together lawmakers and the judiciary from across the country to start a dialogue.
                        The CBA identified some of the tough questions that need to be asked when it launched the Envisioning Equal Justice initiative last summer. For example: Can we be innovative to improve access to justice without absolving governments of their role in legal aid? How much pro bono can lawyers reasonably be expected to provide? How can we recognize the different legal needs of low- and middle-income people?
                        On April 25-27, the CBA will begin a new era of strategic collaboration with a national access to justice summit in Vancouver. Mr. Justice Thomas Cromwell of the Supreme Court of Canada will deliver the keynote address.
                        The time has come for action. Lawyers recognize it. The judiciary recognizes it. Too many people are slipping through the cracks of the justice system.
                        We can’t shy away from that challenge.
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                        Lights, camera, action!

                        By Beverley Spencer January 31 2013 31 January 2013

                          Lawyers are not exactly famous for being cutting-edge innovators or for quickly adapting to change for that matter. As legal futurist Richard Susskind jokes, there’s a reason you don’t find many lawyers on Twitter: They’re still waiting for it to take off.
                          This issue features five examples of practitioners who put paid to the idea that lawyers have trouble adapting, whether it’s to new technology or to a new way of doing business. These experienced entertainment lawyers have witnessed a sea change in the industry and had to adapt their practices accordingly. And they’re thriving.
                          The role of lawyers in the entertainment industry was radically redefined as new technology ranging from iPads to e-books revolutionized how the world consumes entertainment. The client base is different, the law is advancing in leaps and bounds and the deals are more complicated than ever.
                          Major label deals are being overtaken by a greater variety of creative smaller deals and non-traditional players are entering the field as everyone scrambles for new ways to monetize products. Intellectual property law is barely keeping pace with new developments.
                          Some of the changes have made work more efficient — Dean Chenoy of Heenan Blaikie says that 15 years ago, it would have taken him several days to accomplish what he does today in just one. On the other hand, the pace is faster; clients want answers right away — sometimes within the hour.
                          Does any of this sound familiar? It should. Not every practice area has seen this much change, but there are common themes that will resonate with most practitioners: technology is redefining both industry and service delivery; client demands are ramping up; and there is no such thing as coasting.
                          Fortunately, there are a lot of examples in the profession of how to adapt. And how to thrive at the same time.
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