Our Take on Things

My wife is a psychologist. A clinical psychologist. A clinical psychologist who is a tenured professor at York University. She is smarter than me. She has a lot of degrees.

She likes to send me psychology articles that are related to the law. Some I can digest, others make me go “huh?”. I took psychology in undergrad. I actually majored in it. But it was always an elusive topic for me.

I went into law thinking it was black and white – you are guilty/not guilty. You owe the money/you don’t. Over the years, it became obvious this is not the case.

And now, thanks to my wife, I can bring psych articles to your attention to show why. Lucky you.

She sent me a paper by Ian Weinstein, published in the Clinical Law Review called “Don’t Believe Everything You Think: Cognitive Bias in Legal Decision” (volume 9, no. 2 of the Spring of 2003 if you really need to look it up).

Cognitive bias? It is a persuasive error in decision making. Gamblers exhibit it when they believe that a slot is about to hit it big or when they play the same lotto numbers each week thinking that the numbers have to come up sometime. The error in decision making? They ignore or do not understand the laws of probability.

As lawyers, we need to recognize that clients come in with cognitive biases when they walk in the door. And that we have them ourselves.

Clients may have a misguided understanding of the legal system (I blame all those darn TV shows). Lawyers that have been in the system awhile may just take it for granted that the client has the same understanding. That is a bad way to start a lawyer/client relationship.

Here is a quote from page 787 of the article:

“Our clients should have the best predictions about the future and the best assessments of the relative merits of their choices before them when they apply their own personal preferences to make their decisions. Understanding bias will not yield perfect decisions but it can improve the process of decision making. If we understand the counseling process as, in part, guiding our client’s information processing along a well trod, but sometimes problematic path toward predictions and assessments of relative merit, we may be more patient and effective counselors …”

Some words to remember when you walk in the door and we shake hands.

Paul H. Voorn

It’s starting to be the “most wonderful time of the year” if you’re an accountant, which we are not. However, accountant or not, we all start to turn our minds to taxes as April looms closer & closer.

In August 2010, the Federal Government released details of its new reporting regime for aggressive tax planning that would require every “advisor” to report “reportable transactions” to the government. This means that if you’re discussing tax planning with your accountant, the government requires the accountant to report to them a possible issue.

This week the Canadian Bar Association received confirmation in writing from the Minister of Finance that Lawyer/Client confidentiality is not impacted by the above directive and all Lawyer/Client conversations remain privileged.

Many times accountants try to perform legal functions, this is another example of why you should use a lawyer to get legal advice. The lawyer can retain an accountant to obtain tax specific advice and this way, your conversations with your lawyer are confidential.

The point of this is not to encourage tax fraud. Our firm will not provide advice to anyone as to how to commit a crime. However, clients need to feel free to be able to ask questions without fear of investigation a la George Orwell’s 1984. If you don’t know what you are thinking is wrong, you should be able to learn that without being reported to the Government.

Inga B. Andriessen, J.D.

This is a piece of legislation that receives little attention, although for people in the repair and storage business, it is a powerful weapon.

The Act applies to anyone who repairs or makes improvements to other people’s stuff (except land or buildings – that is the domain of construction liens). Stuff is an easier word to understand than “chattels” or “personal property”. Cars and machinery are a good examples of stuff with which I often deal. An obscure example is a record producer who modifies a band’s demo tapes.

The Act also applies to the storage of other people’s stuff, whether a repair is part of the deal or not. I use the Act on behalf of commercial landlords, in order to deal with stuff left behind by a tenant whose lease was terminated or who abandoned the property.

If you still have the stuff and you haven’t been paid for the repair or storage, then you have what is called a possessory lien.

You have a non-possessory lien if you gave the stuff back after it was stored or fixed, but you never got paid. If you gave the stuff away and want to get it back to force payment, then you have to have something signed by the person who originally gave the stuff to you which confirms how much is owed. Then you send out the sheriff or a bailiff to repo it. It’s also a good idea to register your non-possessory lien in the PPSA system, as that puts others on notice of your rights to the goods. It also helps to establish priorities between competing creditors.

If you still have the stuff in your possession or got back by way of seizure, then there are mechanisms that allow you to sell it, keep it or give it away.

If the owner of the stuff wants it back, then money can be paid into court by the owner and you have to give the stuff back. You then have a short period of time to commence a law suit to claim the money that’s in court. If you don’t do that, the owner can get the money out of court after the deadline passes.

I use the Act very often for my car leasing clients. For example, a repair shop says it’s owed money for work done after an accident. The leasing company has no idea of the accident as the person leasing the car never told them about it. I’ll have the leasing company pay money into court to get the car back. The repair shop doesn’t know what to do, so then I get the money paid out of court once the time to sue expires. The repair shop can’t thereafter sue my client for the cost of the repair, as my client was never part of the repair deal. The repair shop has to try to track down the person who leased the car, who is now long gone (usually having defaulted on the car lease as well). If the repair shop does sue in time to claim the money paid into court, then we negotiate a settlement if it appears that the repair was actually performed (since the repairer has lien rights to the money in court).

This is just an overview and by reading this, you can see that using a lawyer to help you enforce your rights is a good idea. Feel free to contact me directly if you have an RSLA issue you would like our firm to handle.

Paul H. Voorn, LL. B

The paint is almost dry on the walls, the tiles just need some grout and God willing, Bell will figure out where they installed our T1 line so that we can have phone service … ready or not …. here we come !

Our new home, effective tomorrow is:

703 Evans Avenue, Suite 101, Toronto, ON M9C 1E3

We are moving to the building next door – if you’ve physically attended at our current office over the past 18 years, you’ll know our new office tower as”the red one” next door to our current grey one.

We’ll be going silent (voice & email wise) for a little bit tomorrow, but come Monday, we’re ready to take on the world from our new location.

See you post move !

Inga B. Andriessen, J.D.

Sr. Lawyer & moving labour

 

Well that was an interesting holiday period. Having Christmas & New Years on weekends certainly added mass confusion to the “business week” in the legal industry.

To my surprise, many firms simply shut their doors between Christmas & New Years. I cannot imagine leaving our clients in such a vulnerable position: you need to know that your business lawyers have your back.

Now granted, that week between Christmas & New Years was not a jam packed courtroom attendance week, but it was the perfect time to get started on the trial preparation for the business schedule that lies ahead as well as, on the corporate document side of things, work with clients to help them close deals before December 31.

Our firm is looking forward to a huge change this month: we’re moving locations after being at the same address for almost 18 years. Don’t panic – we’re only moving to the building next door & we are very excited about it.

The official date that we are in the new space is January 17, 2010, but if you need us on January 15, 2010, please don’t leave it to the last minute as we’re “in transition” on that date.

Happy New Year !

Inga B. Andriessen, J.D.
Sr. Lawyer

Given the many issues that influence corporate practice, it is impossible for me to summarize all of the relevant developments in corporate law in the space I have here.  That said, there have been a few newsworthy items that were important enough to cover again. 

For employers, this has been another year of increasing legislation aimed at social value compliance.  The Accessible Customer Service Standard was introduced and the Workplace Violence Policy requirement came into effect.  Clearly the provincial government agenda includes increased governance of corporations.  Whether we agree with the new regulations or not, we are bound to ensure that we follow them. 

More recently the Not For Profit Corporations Act was passed.  Scheduled to come into effect sometime late next year or early the year after, the act codifies significant amounts of case law into legislative form.  The act should help to provide much needed clarity for directors of not for profit corporations.

 And of course the ongoing copyright debate continues with C-32, the Copyright Modernization Act.  Last seen in the dark recesses of legislative committee hearings, the bill is expected to pass, largely unchanged, sometime in 2011.  Expect some convoluted restrictions on fair dealing, inclusion of some format shifting options and support for the unpopular DRM.

 Here at the firm, compliance issues seemed to be the big issue in 2010.  There was a lot of reorganization and housekeeping going on this year.  Next year, with the resurging economy, we expect a return to more transactional work and a lot of finance transactions – a happy new year indeed!

 Happy Holidays!

 Scott R. Young LL.B.

2010 was a year of change in the way trial lawyers were able to conduct law suits in Ontario.    The two areas of most significant change were matters that are $ 25 001 – $ 100 000 and those under $ 25 000.00.

 A.      Changes to the Simplified Procedure($ 25 001.00 – $ 100 000.00)

The biggest change to the Simplified Procedure in January 2010 was the addition of two hours of discoveries.    This change has significantly slowed down the length of time it takes a Simplified matter to get  to trial – adding at least 6 months to the average case – very frustrating. 

The addition of discoveries has also increased legal fees on these matters.  If they had instead eliminated oral discoveries & allowed 4 pages of written discoveries instead, it would move much more quickly & with less expense.

In the jurisdiction of Milton, Ontario, the use of Toronto Masters to hear Simplified pre-trials has been fantastic – things are moving along quickly & more matters are settling at the pre-trial stage.   

In the jurisdiction of Toronto, Ontario things continue to move at a snail’s pace.  A regular’s Judge’s motion in Toronto can be heard 4 months after the date of booking.  In Milton or Brampton that same motion can be heard in a week. 

Toronto also adds expense by requiring lawyers to attend motion scheduling Court for Summary Judgment motions.  This could all be done by phone or fax .  The cost to the clients is at least another $ 500.00 if not more for this procedure.    Oh and the booking dates for these?  Well, in November 2010, the earliest date we could get was July.  The same motion in Milton or Brampton would have been heard in January or February. 

Overall, my observation is that the changes to the Simplified Procedure increased costs & slowed down actions, not a great thing for the client.

 B.      Changes to the Small Claims Court

On January 1, 2010 the Ontario Small Claims Court limit increased to $ 25 000.00.

Our firm handles a large volume of Small Claims matters and after 11 ½ months, this is what we have noticed:

1. The time to trial has become much longer in Toronto & Brampton Small Claims.  This is due in large part to the failure to appoint more Deputy Judges to handle the increased volume of actions.

 2. In Toronto Small Claims, changing the one hour pre-trial meeting into a much longer mediation style meeting  will slow continue to slow down the system further.

 3. In jurisdictions other than Toronto & Brampton, the increased jurisdiction has not caused delays. 

 4. Surprisingly, in collection matters, defendants are not defending more than they did when the jurisdiction was lower.

Overall the Small Claims Court limit increase has been positive.  Funding a larger judiciary would benefit everyone in the larger cities of Toronto and Brampton.

Conculsion

2011 does not have any large changes looming on the litigation front (phew).  I’ll leave it to Scott R. Young to review the 2010 Corporate Documentation side of things next week.

Inga B. Andriessen, J.D.

Ontario’s new Not For Profit Corporations Act received Royal Assent this past October and the changes to the legislation are significant for many of the estimated 8 million Ontarians who work with, volunteer for, or represent incorporated volunteer associations. There are similar efforts going on to change the federal legislation, but this article with deal primarily with the provincial law.

The new Act replaces section II of the old Corporations Act, which to be clear, deals with not for profit corporations. Business corporations still fall under the jurisdiction of the Business Corporations Acts of either Ontario or Canada.

The Act’s most notable feature is that it clarifies and codifies the duties, responsibilities and rights of those who serve as directors of the corporation. This should help to provide some certainty for directors, as the case law on some of these issues was complicated and muddled – a lot of it involving awkward adoptions of case law meant only to apply to business corporations.

The Act contains helpful language on the objective standard of care for directors, requiring that they “act honestly and in good faith with a view to the best interests of the corporation; and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.” And the Act notes that the statutory duties cannot be contracted out of – no “backroom bylaws” to subvert the interests of the membership.

The conflict of interest rules are also significant. While many not for profits incorporated under the Corporations Act followed best practices and common law guidance and had suitable conflict of interest policies in their bylaws, some did not. The new Act clarifies the definition of a conflict, the duties of a director to declare the conflict and even some circumstances where members will be required to approve acts undertaken in conflict.

Taken as a whole, the legislation greatly strengthens the democratic rights of members of not for profit corporations, and I don’t think in doing so it places any extraordinary burdens on those who volunteer their time and expertise to act as directors. The Act provides guidance and clarity and a few remedies that were difficult to obtain before.

The Act is expected to come in to effect some time late next year or in early 2012, and provides a transition period for organizations incorporated under the Corporations Act. As always, we strongly recommend that if you act as a director for a not for profit, you consult your legal counsel about how the changes will affect your organization.

Scott R. Young

Transparency is a topic that has been in the news this week. Regardless of political stripes, everyone must have chuckled when the CBC took out an ad to proclaim their commitment to transparency, while refusing to disclose very basic information on the same day.

What does transparency have to do with law? Well, it’s the first of the month, which means it’s billing day at the firm. If you have recently received a lawyer’s bill,  take a look at your bill.

Can you tell from the bill who worked on the file, how long they worked on each step and what you were charged for that? If not, why not ? You are the client, you deserve to understand how you are being billed.

In addition to bills, our firm is happy to provide clients with monthly reports on their legal expenses & recoveries – this tells the clients what kind of job we’re doing for them. Does your firm do that? If not, why not?

 Transparency. It’s not just for Crown Corporations anymore .. well, maybe that is a bad closing sentence, but you get the idea !

 Inga B. Andriessen J.D.

 

Many of our clients know that we treat the Holiday Office Party a bit differently than the norm.  We volunteer our time during the morning & celebrate the season with a lunch in the afternoon.

This year we  have planned our tenth annual attendance to the CP24 CHUM Christmas* Wish to help sort and prepare toy orders for charitable groups in the GTA.  This is a great chance to give back some of our time to the community and to help a very worthwhile cause .

 If your office is looking for a charitable organization this season, think of rallying around the Christmas* Wish.  Disadvantaged kids throughout the GTA get to experience holiday cheer by receiving a present that would otherwise never be given.  So many of us live a very privileged existence, but there are so many others who live on the edge of poverty and despair.  A gift from Santa is a small thing in our adult minds, but a tremendous event for a child.

See the charity’s website at http://shows.ctv.ca/TheWish.aspx.  Think of organizing a toy drive at your organization.  Last year, there was a special need for toys for boys between the ages of 6 and 10.  That may be the same this year as well, but call them and see what their needs are this year.

Have a great holiday season.

Paul H. Voorn, LL. B, litigator

* our firm is a group of people of various faiths, some secular and some not.  We have overcome the charged politically correct issue surrounding the use of the word “Christmas” but wish to point out for others who have not that the word Christmas is used by the charity, so don’t get mad at us!!