Legal Feeds Blog
An interim report by retired justice Douglas Cunningham examining Tarion Warranty Corp. has left some with lingering concerns.
|Former justice Douglas Cunningham’s review outlines concerns he has identified over a perceived conflict of interest arising from Tarion’s dual role as adjudicator and warranty provider.|
In Nov. 2015, the provincial government announced the former associate chief justice would lead a review of Tarion — a not-for-profit corporation that is mandated under the Ontario New Home Warranties Plan Act to regulate new home builders and provide warranties on the houses they build.
The review was also set up to examine the legislation and ultimately make recommendations to improve Tarion’s consumer protection, transparency and governance.
The review outlines concerns Cunningham has identified over a perceived conflict of interest arising from Tarion’s dual role as adjudicator and warranty provider.
Other issues the report tackles are accountability and transparency, as well as governance, as there is a perception its board of directors is builder dominated and motivated to favour the construction industry.
James Davidson, a condominium lawyer who participated in the review’s consultations, says he would like to see an independent body created to carry out Tarion’s dispute resolution function.
“The big problem is that Tarion is not independent. It should be independent. They’re in a fundamental conflict of interest,” he says.
Davidson says Tarion’s role as an insurer makes its interests in line with builders, but it is also an adjudicator for warranty claims.
“So it’s not in Tarion’s interest to have those claims honoured. So it’s just a fundamental conflict right there.”
The interim report also offers some potential solutions for the problems identified.
These include placing some or all of Tarion’s functions in separate organizations, introducing multiple warranty providers and diversifying the composition of Tarion’s board. None of these were finalized recommendations.
Cunningham says he met with more than 200 individuals in the consultation process, but Karen Somerville, president of advocacy group Canadians for Properly Built Homes, says she worries the review did not sufficiently consider input from consumers.
“While a number of key issues are included, we remain very concerned that there was woefully inadequate consumer input in this process,” she says in an e-mailed statement.
Cunningham, however, says that having Tarion’s perspective was an important part of the review.
“This whole thing is about Tarion, so I needed to have their perspective and I’ve got it,” he says.
“But I’ve also received the perspective of the consumer advocates, the building industry and all of the other various stakeholders.”
Somerville also notes that the internal document mentions confirming Tarion’s communications strategy as a “next step.”
“Why is the ministry concerned with Tarion’s communications strategy related to this interim report? Meanwhile, consumers are still in the dark,” Sommerville says.
“In the past, the ministry has repeatedly said it is ‘working with Tarion,’ — rather than overseeing Tarion and protecting consumers,” she adds.
“It appears that the interest in Tarion’s communication strategy is another example of the ministry continuing to work with [or] protect Tarion, rather than focus on consumers and consumer protection.”
Christine Burke, a spokeswoman for Minister of Government and Consumer Services Marie-France Lalonde, says this step in the document was about making sure questions about the report were referred to Cunningham.
“The ministry wants to ensure that Tarion has a plan to refer questions about the content of the report to the appropriate party (i.e. Justice Cunningham),” she says in an e-mail.
The government originally announced a final report would be due out by June 2016, but it later revised those deadlines, causing advocates to decry the longer process in Cunningham chalked the altered deadlines up to the shear size of the task at hand in the review. He says the original deadlines were simply not realistic.
“I don’t think of it as delay. I look at it as a more fulsome review than was anticipated,” he said before the report was released.
Cunningham is asking for feedback on his interim report by Oct. 14.
A final report is expected by the end of the year.
Borden Ladner Gervais LLP has nabbed the former general counsel at CBC as strategic adviser and counsel in its securities and capital markets group.
|Former general counsel of CBC, Maryse Bertrand, has joined BLG.|
Maryse Bertrand was general counsel and vice president, real estate services, legal services and corporate secretary at CBC/Radio-Canada from 2009 to 2015 and an M&A partner at Davies Ward Phillips & Vineberg LLP for 20 years before that.
Bertrand says that she was in discussions with a number of law firms after having just completed a Master of Science in risk management at New York University’s Leonard N. Stern School of Business this spring.
“It is all about the clientele that you have and the nature of the work that you have and BLG was the best fit,” she says.
She is looking to apply her knowledge of M&A that she acquired while in private practice in her new role, while also drawing on her experience in risk management and governance from the CBC.
“As general counsel at the CBC, I was very much in charge of risk management. I handled a fair amount of matters.” One of the high-profile matters Bertrand dealt with at the CBC was the Jian Ghomeshi scandal, as well as “a couple of less high-profile ones that were just as important for the organization.
“I enjoyed my time at the CBC, I spent almost six years there, so I really really enjoyed that. It gave me a whole lot of respect for public service. A lot of dedicated people who work very very hard for, compared to the private sector, less money, and sometimes frankly less recognition, so there are a lot of things to be done, there are a lot of challenges, and I like that.”
Bertrand left the CBC last year to complete her master’s degree, and having advised on governance while sitting on a number of company boards in her time at the CBC, she says she “decided that I would pursue that on a full-time basis as opposed to doing that part-time.”
While at the CBC, Bertrand was responsible for three business units: real estate and health, safety and environment portfolios of CBC/Radio-Canada in Canada and abroad, the legal department with offices in Montréal, Toronto and Ottawa and the Corporate Secretariat. She chaired the CBC’s national crisis committee and managed compliance with access to information and privacy laws.
In fact, managing crisis seems to be a theme throughout her career. Bertrand says the financial crisis was partly what prompted her to leave her private M&A practice in 2009 at Davies to join the CBC, as she guessed the work would not be as interesting in the short term.
“In terms of M&A work, you can only imagine that it was pretty boring [post-crisis] as compared to the previous 10, 15 years that had been absolutely amazing. My assessment at the time, which I think was probably right on, was that it would take many many years for things to actually come back to any sort of interesting level.”
With her experience at the CBC managing crisis and her masters in risk management, she anticipates advising BLG clients on governance as well as traditional M&A.
Bertrand says risk management is a new growth area.
“From a governance point of view, being a corporate director is getting professionalized, if I can put it that way. Shareholders, institutional investors, are asking more of corporate directors, quite rightfully [so]. They are asking them to be more proficient, to focus more on a number of more strategic areas, compensation being one of them, but risk is also very much at the forefront since the [financial] crisis in particular.”
“It is a pleasure to welcome Maryse to the firm,” said Sean Weir, BLG’s national managing partner and CEO, in a press release. “She has successfully advised private and public companies on a broad range of corporate issues with outstanding commitment to client service. Her impressive track record is an inspiration for senior leadership and rising stars.”
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The Canadian Bar Association’s B.C. branch is pushing for lawyers willing to work in rural areas to be able to access the province’s student loan forgiveness program.
|Michael Welsh, president of the CBA’s B.C. branch, says some communities are ‘reaching a point where there’s going to be a crisis in terms of being able to have access to legal services if something’s not done.’|
“Our proposal [to the provincial government] was that if a lawyer would commit for a period of say five years that a fifth would be written off over each year — it’s equivalent to programs that the government currently has for health professionals who agree to work in underserviced areas of the province,” Michael Welsh, president of CBABC, says.
The proposal states “our new lawyers are concerned about their financial future. A student loan forgiveness program for new rural BC lawyers would not only bring jobs to rural BC but would help support more vibrant rural infrastructure and economies.”
CBABC has been attempting to address the issue of high-need rural communities for the past few years, including through their program Rural Education and Access to Lawyers which is funded by the law society and the law foundation in the province.
REAL finds law students summer positions in communities that need lawyers and through that process CBABC identified “a number of communities . . . that are reaching a point where there’s going to be a crisis in terms of being able to have access to legal services if something’s not done over the next several years,” Welsh says.
It was through the REAL program that CBABC became more sophisticated in targeting where the real need is, Welsh says. The need arises because existing lawyers in rural areas are older and facing retirement or at least a reduction in the amount of work they’re doing, but younger lawyers aren’t coming in to replace them. Welsh says in large part that’s due to high student debt loads and the concern that there won’t be enough income — at least during the start-up period — to be able to keep up with payments. Larger centres offer jobs with larger firms and guaranteed incomes, Walsh says, and so more young lawyers are heading to urban settings.
“That was the genesis of our student loan forgiveness proposal — we saw that need, and identified that reason for it, so we’re taking it in tandem with what we’re already doing to see if we can work with government to address that,” Welsh says.
While “there’s nothing like what we’re proposing . . . in any other province or territory,” Welsh says the CBABC’s proposal notes that in 2015:
• Newfoundland and Labrador became the first province to completely eliminate its student loan program by replacing provincial student loans were with grants. While NL does not have a law school, its loan program also applies to programs outside of NL.
• In New Brunswick, undergraduates can apply for provincial debt reduction after holding total loans greater than $32,000.00. In Nova Scotia, students can defer payments on their provincial student loans for up to 12 months during articles.
• Some Canadian law schools are experimenting with income contingent loan programs. At York University’s Osgoode Hall, five law students are benefitting from a program that provides funds to cover tuition costs, requiring repayment depending on the student’s financial status before and after law school.
• Osgoode Hall’s law school has implemented a pilot project that is an income contingent loan program aimed at granting eligible students with relief against tuition payments which are to be repaid according to their post-law school income levels.
• The University of Toronto’s Faculty of Law has an income contingent “Back-End Debt Relief Program” designed to assist graduates with repayment of student loans incurred while studying at the law school.
Welsh also notes other countries are facing similar access to justice issues in rural areas. He says in the United States, North Dakota pays lawyers $12,000 annually to practise in its high-need communities.
CBABC has yet to hear back from the government, but Welsh says he’s hopeful discussions will start over the next few months.
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A request for proposal has gone out from the Law Foundation of B.C. to non-profit organizations to submit a plan for developing and implementing a children’s lawyer’s office in B.C.
Interested organizations were given a Sept. 15 deadline to submit a proposal for the two-year pilot project, which has available funding up to $600,000.
Foundation executive director Wayne Robertson says the new office could be in place by spring 2017.
A $158,000 cy prés award (the result of a class action) landing in the foundation’s child welfare fund had triggered its board to examine different initiatives, says Robertson. The child welfare fund was created to improve and protect the welfare of children.
“The board of the law foundation looked at what we might do and the idea of funding a children’s lawyer’s office was one of the possibilities. Ultimately, it was decided and we looked at what we would do about finding enough funds to launch a pilot project,” says Robertson.
The foundation raised $600,000. The child welfare fund had some existing money, which was combined with the cy prés award, while other contributors were the foundation’s Strategic Initiative Fund, the Law Society of B.C. Access to Justice Fund, the Notary Foundation of B.C. and B.C.’s Office of the Representative for Children and Youth.
The decision to re-establish an office, which was closed 12 years ago when the province cut legal funding, was rooted in a growing concern that children’s voices were not being heard in legal matters.
“It was seen that our children are a vulnerable group. They don’t have representatives in proceedings that affect them or in family law proceedings,” he says.
Robertson says he believes there will be three main focal areas where the office could become involved if needed. The first is in contested disputes between parents in family law cases where the interests of the child or children are impacted. The second area, he says, is in child protection cases where the child or children should have an independent representation to voice their concerns.
“There is some provision under our [existing] legislation, but it doesn’t seem to be well known and seems limited,” he says. The third area is issues that impact a child’s social life such as legal issues arising from school, employment, housing, bullying or street gangs.
While the office of the children’s lawyer will be available to all children, a priority will be to address the legal issues that impact aboriginal children and youth as well as immigrant and refugee, street-involved and LGBTQ youth.
Robertson says the proposals from organizations will be considered and a decision made on the successful applicant by late November.
“The proposals will give us an idea of what the landscape might look like,” says Robertson, who admits that $300,000 a year is not a lot of funding. The organization will have to outline how it plans to deliver legal services to youth throughout the province. He says there will probably be only one office and that the organization will hire lawyers on a “case-by-case” basis as is needed to represent B.C. youth.
When the office is in place, B.C. will be the fourth province to offer these services to children and youth. “Ontario, New Brunswick and Alberta have lawyer services for children,” Robertson says, but each system is different with some offering more coverage than others.
If the successful applicant is advised in November, Robertson says he believes the organization could be in place by April 2017. “It really depends upon how quickly they can get things together such as hiring staff, developing procedures and finding space to rent,” he says.
An important part of the pilot program will be its evaluation, says Robertson.
“We will be ensuring that there is good evaluation of the program so that at the end of the pilot phase we can determine what difference the work of the office has made to children and, if successful, we hope that money might be made to continue the work,” he says.
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Kellogg Canada is the latest company to be hit under Canada’s Anti-Spam Law, ordered by the CRTC to pay $60,000 as part of a settlement for alleged violations that took place over a relatively short period of time.
|Lawyer Steve Szentesi says the Kellogg Canada CASL case is ‘something of a caution that companies should ensure that third party marketers and partners comply with CASL.’|
A statement issued by the CRTC on Sept. 1 indicated Kellogg Canada Inc. “…voluntarily entered into an undertaking with the chief compliance and enforcement officer of the Canadian Radio-television and Telecommunications Commission, in relation to an alleged violation of paragraph 6(1)(a) of the Act:
“From 1 October 2014 to 16 December 2014, inclusively, messages were sent by Kellogg and/or its third party service providers during the period of 1 October 2014 to 16 December 2014 to recipients without consent of their recipients.”
Pursuant to section 21 of the Act, Kellogg Canada Inc. agreed to the monetary payment of $60,000 and to comply with, and ensure that any third party authorized to send a commercial electronic message on its behalf complies with, the Act and regulations, and to review and update its compliance program.
The compliance program will be reviewed and updated by Kellogg Canada Inc. with the goal to promote compliance with the Act and regulations. More specifically, the program will cover elements such as revising written policies and procedures regarding compliance, training programs for Kellogg employees, tracking of commercial electronic message complaints and subsequent resolution, and implementing updated monitoring and auditing mechanisms to assess compliance.
No one from Kellogg Canada was available for comment, but the company issued a statement on Friday:
“We are aware and disappointed in our company’s alleged violation of Canada’s anti-spam legislation as it relates to commercial electronic messages sent by our third party suppliers on behalf of Kellogg Canada in late 2014. We are cooperating fully with the Canadian Radio-television and Telecommunications Commission (CRTC), and voluntarily undertaking a number of immediate actions to ensure our compliance and that of our third-party suppliers. At Kellogg, consumers are at the heart of all we do, and we will continue to earn their trust and demonstrate a commitment to integrity and ethics each and every day.”
In the statement, the CRTC noted: “This Undertaking fully and completely resolves all outstanding issues with respect to Kellogg’s or its subsidiaries’ alleged non-compliance with the Act, including the payment of any specified amount in relation thereto, between the Commission and Kellogg Canada Inc. in relation to the CCEO’s investigation into the alleged violation by Kellogg Canada Inc. during the period of 1 October 2014 up to and including the Effective Date of this Undertaking.”
Bradley Freedman, partner with Borden Ladner Gervais LLP in Vancouver, says the settlement is notable in that it is the first time an alleged violation has been by an organization or its service providers.
“You can see how the language is not clear — it says Kellogg Canada and/or its third-party service providers,” says Freedman.
He adds that there are things organizations can do such as educating employees and following appropriate policies and procedures.
Marketing and advertising lawyer Steve Szentesi says the case shows that the CRTC is still working through matters that arose early following the coming into force of CASL and that compliance with the basic CASL requirements (consent, identification and an easy unsubscribe mechanism) remain key for companies marketing electronically.
“This case is also something of a caution that companies should ensure that third-party marketers and partners comply with CASL,” says Szentesi.
“Companies using third-party marketers for electronic marketing may also consider risk-shifting provisions in their agreements with marketers in the event CASL issues arise,” he says.
The case also sends a message that the CRTC wants companies engaging in electronic marketing to have effective compliance programs.
Violation of CASL’s CEM rules can result in penalties up to $1 million per violation for individuals and up to $10 million per violation for organizations, civil liability through a private right of action (commencing July 1, 2017) and vicarious liability on employers, directors and officers. CASL gives the CRTC regulatory and enforcement authority regarding CEMs and other matters.
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