It is very hard to avoid puns when writing about environmental law issues. The issues, and positions taken, are often polarizing, and the themes and perspectives articulated are commonly recycled. Hopefully this lowest form of wit will not seep into, and unduly contaminate, this column.

Recently, regulators in Ontario have reached decisions, made orders, and issued (emitted?) statements indicating they are prepared to greatly expand the scope of persons against whom environmental remediation orders can and will be made. In isolation that is not a bad thing — maintaining a clean environment is indisputably a laudable objective. Expanding that scope raises certain questions, naturally, such as whether the expansion of that scope is fair and is properly focused to achieve its intended results. Environmental law is largely designed to force individuals and businesses to take account of an externality: the effect of their activities on the environment. The irony is that, in expanding the scope of remedial activity in the manner recently witnessed, regulators may themselves be creating very significant externalities.

At a panel discussion this winter on the intersection of insolvency and environmental law, a representative of the Ministry of the Environment stated that, in seeking orders under the Environmental Protection Act (Ontario), the ministry is willing to look beyond the polluter, where the polluter is a corporation, not only to its directors and officers but to its shareholders. The EPA contains a mechanism to do this where the “management and control” of the polluter is not confined to the polluter itself. But the speaker went beyond those words to invoke a concept that touches the hearts of corporate lawyers: she said, “we think of it as truly a piercing of the corporate veil.”

There is very limited precedent to interpret the meaning of “management and control” in the EPA. However, recent enforcement initiatives, in addition to the comments cited above, suggest the ministry intends to interpret these words broadly. It recently issued an order against Tembec Industries Inc., a non-controlling, indirect shareholder of a bankrupt polluter, to step into the polluter’s shoes at significant cost to address historic contamination. Tembec had only been a shareholder (and an apparently passive one) over a period during which the polluter was compliant. The Environmental Review Tribunal has been reading from the same script. In 2009, the tribunal ordered a municipality to pay for a cleanup to the extent that a private polluter’s insurance was insufficient because the pollution had travelled through the municipality’s sewers. Then last year, the tribunal ordered a former director of a former owner of a polluted site to fund a remediation.

While the words “management and control” in the EPA have not been subjected to much judicial consideration, the doctrine of “piercing the corporate veil” is established law in Canada, and has been so for over a century.

The fundamental concept of the “corporate veil” is that a corporation is a separate legal entity, distinct from its owners, and therefore liable for its own actions. From a policy perspective, limited shareholder liability is integral to encouraging public participation in the capital markets and to facilitating the risk-taking that is the seed of growth in capitalist economies. Without limited liability there might not have been the capital to fund the first railroads, the Ford Motor Co., Apple, nor, more recently, Facebook.

There will be cases where justice requires a remedy, but they are by necessity outliers. In Kosmopoulos v. Constitution Insurance Co., the Supreme Court of Canada stated that “the best that can be said is that the ‘separate entities’ principle is not enforced when it would yield a result ‘too flagrantly opposed to justice, convenience, or the interests of Revenue.’” The corporate veil, in other words, is not to be lifted as lightly as Zsa Zsa Gabor’s. Other cases have found that the veil can be lifted where the corporation is acting merely as an agent, otherwise known as a “sham” or “alter ego” corporation, where it was incorporated to facilitate an illegal or improper purpose, or where there is inadequate capitalization of the corporation by the shareholder such that it cannot meet its anticipated obligations.

Or, more salient to the EPA, where provided by statute. This is where the concept of “management and control” in the EPA intersects with the construct of the corporate veil. As noted, the EPA certainly furthers an important policy. So does the corporate veil. There are lots of cases where balancing competing policies is near impossible, but here it is not. There’s a balanced jurisprudence already established as to when a shareholder can be liable for a corporation’s actions. Furthermore, subordinating the significance of fairness as a criterion for imposing liability in favour of casting a very wide net may lead to unintended results. Bottom line, in seeking to protect our verdant vales, consideration should be given to our corporate veils (if I have to stay away from puns I have to be permitted weak wordplay).

Neill May is a partner at Goodmans LLP in Toronto. His practice focuses on all aspects of securities law, with an emphasis on M&A and corporate finance. E-mail him at This e-mail address is being protected from spambots. You need JavaScript enabled to view it . The opinions expressed in this article are those of the author alone.

In 2009, I embarked on a major project to look at the state of diversity in the law in Canada. At the time, there were perhaps one or two women managing partners of law firms of any size across the whole country; the number of black lawyers who were partners in Bay Street firms could be counted on one hand; and while many law firms had diversity initiatives, they often consisted of nothing more than a “muliticultural calendar.” In another issue, we wanted to write a story about being gay or lesbian in Big Law. Not one Bay Street lawyer would put their name to the story and talk about the issue. We had an associate from a national firm’s Calgary office on the record, but that’s as close as we could get even though law firms insisted that they were welcoming to all diverse groups.

That year, I attended my first Pride at Work gathering in Toronto. The organization brings together LGBT professionals and their allies from businesses all across the country and every year it holds a big bash during Pride Week in Toronto. In 2009, only one law firm — Fraser Milner Casgrain LLP — was willing to openly support the organization and is considered one of its founders. Looking at this year’s event, Blake Cassels & Graydon LLP, Borden Ladner Gervais LLP, Osler Hoskin & Harcourt LLP, McCarthy Tétrault LLP, Norton Rose Canada LLP, and Thornton Grout Finnigan LLP have joined FMC as law firm sponsors of the event.

In mid-June this year, at the Canadian General Counsel Awards, Douglas Stollery, general counsel at PCL Constructors Inc., was honoured with a lifetime achievement award. He got a bit teary-eyed at the end when he thanked his same-sex partner for all his support over the years. It was all so normal. No gasps from the black-tied crowd, no whispers of shock at the tables full of in-house counsel.

Also over the last few years organizations promoting diversity in the legal profession have been increasing and growing. One of the most active is Legal Leaders for Diversity, a group of in-house counsel committed to increasing diversity in their ranks as well as in the law firms that serve them. It’s really still just a start. Canada is years behind other countries in its promotion and embracing of diversity, which is not just right but makes business sense, particularly in the global economic environment.

I’ll conclude by saying when I attended the year-end gala for the Federation of Asian Canadian Lawyers in the spring, what struck me the most, beyond the incredibly varied backgrounds of the attendees, is that most of them were young. Sitting beneath the stained-glass windows and wood panelling in the University of Toronto’s Hart House was quite a striking visualization of the future of law — young, diverse, engaged, and ready to take on the world.

Let’s amend the Supreme Court Act so the judges are appointed for staggered, fixed, non-renewable terms. This would curb the prime minister’s ability to mould the court in his ideological image for generations to come. It would stop his political point of view being perpetuated long after he is put out to pasture. It would ensure a constant supply of energetic and representative judges, full of new ideas.

I suggest 18-year terms staggered every two years seem right for a nine-member court, but shorter terms are worth discussing.

I can hear someone objecting that this scheme might enhance the ability of a long-serving prime minister to stack the court. Five of Canada’s 22 prime ministers served for more than 10 years, and two, Mackenzie King and John A. Macdonald, for more than 18. With staggered 18-year terms, a prime minister of great longevity might end up appointing every Supreme Court judge. But any system of appointments would almost certainly allow a prime minister with such staying power to fill up the court with his ideological soul mates. One merit of the staggered, fixed-term system is that a process of court renewal would begin no later than two years after that long-serving prime minister left office, and would continue apace.

By now pretty much everyone has cottoned on to the fact that the Supreme Court of Canada is becoming the “Harper Court.” The most ideological prime minister in a long time has already appointed four of the nine sitting judges (justices Marshall Rothstein, Thomas Cromwell, Michael Moldaver, and Andromache Karakatsanis) and will soon appoint two more (justices Morris Fish and Louis LeBel will reach the mandatory retirement age of 75 before the next federal election). It’s the Harper Court all right, getting more conservative all the time. We shouldn’t be surprised. After all, we voted the top guy into office and know that he gets to appoint the judges he wants.

The problem is that the country moves on ideologically and demographically leaving the Supreme Court behind. The face of Canada changes, but the court doesn’t keep pace. Isn’t it about time, for example, that someone from a visible minority and someone from the gay and lesbian community sat as a Supreme Court justice? It remains a scandal that an aboriginal has yet to be appointed. The usual counter-argument to such a suggestion is “all that matters is legal ability,” but that retort is specious and simplistic (a subject for another column). The “keeping pace” problem is made worse because a Supreme Court appointment is solely within the gift of the prime minister, with no real democratic oversight. There is none of that pushing and shoving by elected representatives that makes sure certain legitimate interests are promoted and would ensure that the court keeps up with a country in transition.

The United States has been struggling with this problem for a long time (it was on Thomas Jefferson’s mind when the Union was created). Pulitzer Prize-winning historian James MacGregor Burns has written of the U.S. Supreme Court: “Justices throughout the court’s history have clung to their seats long after their political patrons have retired and long after their parties have yielded to their opponents or even disappeared. They have often perpetuated ideologies and attitudes that are outdated or that Americans have repudiated at the ballot box.” The problem is more acute in the U.S. because Supreme Court judges are appointed for life. But in one important respect, the situation south of the border is better than it is in our own country. The president only nominates a Supreme Court justice and his choice has to be approved by the Senate after a long and public political process. Democracy and transparency can have powerful and salutary effects on the judicial appointments process.

In the U.S., the debate over term limits has recently centred on a 2006 academic paper by two law professors, Steven Calabresi and James Lindgren. They write: “A regime that allows high government officials to exercise great power, totally unchecked, for periods of 30 to 40 years, is essentially a relic of pre‐democratic times.” They argue for 18-year staggered terms for U.S. Supreme Court justices; once the scheme was fully phased in, there would be two appointments in each four-year presidential term. One benefit would be “the democratic instillation of public values on the Court through the selection of new judges. . . .” Another would be removing the “ability of one political movement to lock up the court for thirty years, as Republicans did at the start of the Twentieth Century and as Democrats did after the New Deal.” The term limits idea was espoused by a 2012 presidential candidate. Unfortunately for the idea’s credibility, the candidate was Rick Perry, who in a TV debate couldn’t remember how many Supreme Court judges there were.

By the way, there’s nothing radical about term limits for the judges of a country’s highest court. Calabresi and Lindgren point out that members of the constitutional courts of France, Italy, Spain, Portugal, Germany, and Russia serve fixed, limited terms of between six and 12 years. The same is true of some non-European countries — South Africa, for example.

As usual, the devil is in the details. How would the scheme be phased in? The answer seems to be that it should only apply to new appointments; sitting judges would not be affected. What should be done if a justice dies or resigns prior to the expiration of his fixed term? Most agree that an interim justice would be appointed to fill the remainder of the deceased or retired judge’s term. What happens to a judge when his term is over? He retires on a fat pension, that’s what, and can do what retired judges always do — be of counsel to a prestigious law firm, chair a commission of inquiry, etc. It’s not a bad life.

Philip Slayton’s latest book, Mighty Judgment: How the Supreme Court of Canada Runs Your Life, is now available in paperback. Follow him on Twitter @philipslayton.

It’s month three in a row of sharing useful tips that I’ve heard at events around the country. I hadn’t planned on it, but if there’s good info on offer, I may as well share it. This month’s tips come from the spring meeting of the Canadian Corporate Counsel Association. On a 30 C April day in Montreal, I sat in on a session about ethical obligations of in-house counsel in a technological world. Here are few random tips gleaned from the session that included Dominic Jaar of KPMG, Bernard Brun of the Desjardins Group, and Langlois Kronstrom Desjardins LLP’s Jean-François De Rico.

Of use to any lawyer or anyone who uses a BlackBerry, in particular, but any device that uses Bluetooth: turn off the Bluetooth or make sure it is password-protected. Basically, the panel pointed out, all phones come set up with default passwords and anyone who is so inclined can not only easily access all the information on your device, but may even be able to go through your BlackBerry to access your company or firm’s exchange server if your Bluetooth is on and unprotected.

You can be sure as they were telling the room this, every single person in there whipped out their BlackBerrys and made the appropriate changes. I am pleased to report my Bluetooth was turned off, so Thomson Reuters’ information was safe!

Of course, password and other security measures were a big part of the discussion. The usual caveats about making sure that once you dispose of computing equipment (and that includes items such as scanners), the hard drives are wiped clean or, better yet, shredded so no private or corporate information can be gleaned from them later on. But in the day-to-day life of your average lawyer, many of whom use and carry around laptops and other portable devices, Jaar says: “If you do nothing else, encrypt your hard drive.”

Password protection is not enough — you need full encryption. As De Rico pointed out, studies show that most data breaches occur from within because of human error and/or negligence. So much like you would make sure that your filing cabinets are always locked and secure, do the same with all your computing devices, on the desk or on the go. Windows 7 now comes with encryption options as default settings, so make use of them.

One caveat on the encryption front from Brun: be sure that your IT department is aware of what’s being encrypted so if someone leaves the company, and especially during litigation, there is still access to their information. This might be a good place to have an encryption policy in place and just one of the many ways IT and legal departments can work together for the betterment of all!

So there are two ways to keep your data safe. May as well start now!