Cutting legal costs is still a priority but in-house counsel are discovering they are more valuable to their organizations when they prevent problems before they happen or suggest opportunities to help boost the bottom line.

Ildiko Mehes says focusing only on cost cutting sets up in-house counsel for failure and detracts from other values the legal group offers.

According to BTI Consulting Group’s annual survey, which benchmarks corporate counsel management strategies, it seems after years of cost cutting legal budgets are getting a boost and the focus is on taking more preventative measures including resolving litigation as quickly as possible.

The new No. 1 goal for corporate counsel is to transform from a cost centre to being a strategic advocate for the companies they represent.

For each of the last six years the “BTI Benchmarking Corporate Counsel Management Strategies” survey has shown corporate counsel’s top goal was to control legal costs. But this year cost control has dropped to second plac. The number of corporate counsel who now see delivering value as their top goal jumped to 31.8 per cent from 18.7 per cent last year.

Overall legal budgets went up by 8.7 per cent, but the percentage going to outside counsel continues to drop.

The data is based on BTI research conducted from March 2012 to September 2012. BTI conducted more than 300 interviews with chief legal officers and general counsel at Fortune 1000 companies and large organizations. About 12 per cent of respondents were from Canadian companies.

The survey shows corporate counsel seek to add value to the business by adopting new tactics to meet their goal, including:

• Redefining strategies to obtain permits and regulatory approvals faster;
• Planning for acquisitions before the business units engage in talks;
• Sitting on research and development committees to spot IP opportunities earlier;
• Developing settlement decision trees to get to resolution faster; and
• Redesigning legal work flows — often with law firms.

Sitting in on R&D meetings is part of the job for Ildiko Mehes, vice president and general counsel at pharmaceutical company Teva Canada. In addition to the six-member legal department she heads up she’s also responsible for scientific affairs which includes regulatory affairs and R&D.

“This is exactly how I have approached my role for the past eight years and I have advocated for other in-house counsel to not be afraid to intertwine their legal expertise with business issues,” says Mehes.”The line between legal and business is not always clear, but it doesn’t always need to be.”

She says in-house counsel, with their legal expertise, understanding of the business, and good judgment are well positioned to create value for the business.

“Simply focusing on continued cutting of legal costs not only sets up in-house counsel for eventual failure but detracts from the potential value that the legal group could be creating. Good business leaders recognize this and encourage their in-house counsel to participate fully in all areas of the business,” says Mehes.

By actively trying to assist the business in improving the bottom line in different ways, corporate counsel can find savings and even revenue opportunities that end up being more significant than rate cuts, the report said.

For their part, law firms can help out by offering risk assessments and contingency plans or just offer a different approach to a litigation file.

So who is favoured to fill the seat on the Supreme Court of Canada left empty by retiring Justice Morris Fish?

Chief Justice of Quebec Nicole Duval Hesler’s name is one considered a strong contender for a spot on the top court.

Minister of Justice Rob Nicholson announced today the members of the selection panel to advise on filling the vacancy for the Quebec region resulting from Fish’s retirement.

Many say it should probably be a woman with a debate over whether the person will come from Montreal or Quebec City.

Front-runners frequently mentioned include justices Marie-France Bich, France Thibault, of the Court of Appeal of Quebec as well as appellate judges and former McGill University law deans Nicholas Kasirer and Yves-Marie Morisette.

Bich is recognized by some for her writing but also her “connection to reality,” as one Quebec commercial litigation lawyer told Legal Feeds. “Some of the other professors on the Court of Appeal bench tend to forget that.” She was one of the top names bandied about to fill last year’s opening after justice Marie Deschamps retired.

Thibault, who is from Quebec City is thought to be a more natural fit when Justice Louis LeBel exits due to mandatory retirement next year.

“People also mention the Chief Justice of Quebec, Nicole Duval Hesler,” says Sébastien Grammond, dean of the civil law section of the University of Ottawa. “There are others such as Justice Francois Doyon. Another question is could they take someone from the Federal Court of Appeal? This is a possibility often overlooked.”

Doyon has significant criminal law experience, as did Fish, and is considered to be “well liked.”

Grammond points out that Justice Marshall Rothstein, who is currently the only Supreme Court judge who also sat in the Federal Court of Appeal, will retire in 2015 so it might be seen as being time to have another judge from the Federal Court of Appeal.

“Then you might think about people like Robert Mainville or Johanne Trudel who are Quebec judges on the Federal Court of Appeal,” he says.

There is also the possibility someone could be appointed directly from practice.

“That’s more difficult to predict because I would say it’s not obvious that the qualities needed to be a quality practitioner are the same skills to be a good Supreme Court judge,” says Grammond. “It’s more difficult to point to a leading lawyer as someone who make a good Supreme Court judge but names like Guy Pratte come up.”

Pratte is now a member of both the Ontario and Quebec bar and is widely known and well respected for his commercial litigation practice as well as his work on a number of public inquiries.

The selection panel announced today includes five MPs:

• Jacques Gourde, Conservative Party of Canada
• Shelley Glover, Conservative Party of Canada
• Robert Goguen, Conservative Party of Canada
• Francoise Boivin, New Democratic Party of Canada
• Dominic LeBlanc, Liberal Party of Canada

The mandate of the selection panel is to review and assess a list of qualified candidates put forward by Nicholson in consultation with the prime minister, the chief justice of Canada, the chief justice of Quebec, the attorney general of Quebec, and prominent legal organizations, including the Barreau du Quebec and Canadian Bar Association.

The Justice minister has also received public input with respect to candidates who merit consideration.

The selection process for the new Supreme Court judges is as follows:

• Members of the selection panel will meet to review the resumes provided by each candidate as well as a number of reported judgments and publications.

• Consult with the chief justice of Canada, the chief justice of Quebec, the attorney general of Quebec, the Barreau du Quebec, the Canadian Bar Association, and any other prominent members or organizations of the legal community the committee thinks would be valuable.

• All deliberations by panel members and consultations with third parties will be confidential.

• The selection panel will provide an unranked list of three qualified candidates to Nicholson and Prime Minister Stephen Harper.

• Harper and Nicholson will select a nominee from that list.

• The nominee will appear at a public hearing of an ad hoc parliamentary committee.

The hearing process — considered by critics as nothing more than window dressing — was first established by Harper for the appointment of Rothstein in 2006 and repeated with the appointments of justices Andromache Karakatsanis and Michael Moldaver in 2011 and Richard Wagner in 2012.

The Supreme Court of Canada has clarified its earlier ruling in Teva Canada Ltd. v. Pfizer Canada Inc. saying the Viagra patent is not invalid or void.

In Teva v. Pfizer, Pfizer sought an order prohibiting the Minister of Health from issuing a notice of compliance to Teva for its generic version of Viagra under the Patented Medicines (Notice of Compliance) Regulations.

On June 4, the Supreme Court confirmed the patent in issue is neither invalid or void, finding instead that Teva had established its allegation and therefore dismissing Pfizer’s application for an order of prohibition.

David Aitken, counsel for Teva Canada, says he was “disappointed in the result” given the finding of the court that the patent had been obtained through “gaming the system.”

“I would have thought this could have provided the rationale for going beyond the recognized limited remedy and finally holding the patent to be invalid but it was not to be,” Aitken tells Legal Feeds. “But Teva has its generic version of Viagra on the market. The only issue outstanding before the Supreme Court was whether Pfizer’s patent covering Viagra would finally be declared invalid or not, but the patent has subsequently been declared invalid by the Federal Court of Canada and so I think it’s still an absolute victory by Teva.”

The Law Society of British Columbia has disbarred lawyer Malcolm Hassan Zoraik following his convictions in B.C. Provincial Court for public mischief and fabricating evidence.

In June 2010, Zoraik was found to have created a letter which falsely alleged jury tampering and then placed that letter in the courthouse in Victoria.

In his reasons for sentence, the Provincial Court Judge A.F. Brooks said: “In short, Mr. Zoraik manufactured a letter which he knew was likely to become evidence before a court, and indeed sought to have a court rely upon that manufactured evidence.”

In April 2009, Zoraik was the lawyer for the plaintiff in an action for damages arising from an automobile accident. The case was heard by a judge and jury. After deliberating for 20 minutes, the jury delivered a verdict of no liability on the part of the defendant. Zoraik applied to the judge to decline to enter judgment because of the brevity of the jury’s deliberations.

On May 6, 2009, before that application was heard, an envelope containing a letter was found on a counter in a small publicly accessible alcove, used for searching court files, located beside the Court Registry. The letter purported to be from the husband of an unidentified juror in a civil action and alleged that his wife had been “offered money for her vote in the court.”

The case described in the letter matched that which Zoraik acted as plaintiff’s counsel. The allegation was in fact untrue, but the existence of the letter gave rise to an investigation, as the result of which he was charged with and convicted of creating and depositing the letter in the courthouse contrary to sections of the Criminal Code.

Zoraik appealed his convictions, but his appeal was dismissed in June 2012.

Independent of the criminal proceedings, the Law Society of B.C. conducted its own investigation into Zoraik’s conduct. The LSBC benchers relied on Rule 4-40 of the Law Society Rules to expeditiously deal with the matter.

Rule 4-40 is only used in exceptional circumstances. It forgoes the need for a citation and citation hearing, allowing benchers to summarily suspend or disbar a lawyer who has been convicted of an offence that was proceeded with by way of indictment.

In their decision, the benchers noted the seriousness of Zoraik’s misconduct and the significant threat it presented to public confidence in the legal profession and justice system.

“For such a system to work, and for the public to have confidence that it is working properly, lawyers must uphold the law and its proper administration,” stated the decision. “Failure to do so subverts public confidence in the judicial system.”

While Zoraik has now been ordered disbarred, the LSBC had obtained a written undertaking from Zoraik in June 2010 that he would not engage in the practice of law.

A web site for Zoraik Law Offices provides a phone number now belonging to two lawyers in Victoria who now operate out of his old address.

Applications opened today for Field LLP’s new Community Fund Program, which will provide $75,000 for worthy initiatives in Calgary, Edmonton, and Yellowknife.

The Western and northern regional law firm is inviting communities in Alberta and the Northwest Territories to nominate projects, particularly those focused on education, health care, at-risk youth, homelessness, women’s organizations, sports, community and arts and culture.

“Field Law cares about the communities we work and live in,” said managing partner Jim Casey. “We are eager to go beyond the practice of law and help get good ideas off the ground that will have a measurable and ripple effect on the community.”

The money will be divided as follows: $30,000 distributed in Calgary; $30,000 in Edmonton; and $15,000 in Yellowknife.

It will be up to three judging panels to determine how the money is allocated in each community. For example, in Calgary the judging panel could award 30, $1,000 prizes or, if they think one cause needs the whole amount in that year they may do that as well.

The judging panels will be made up of lawyers and staff from Field Law and community members. Each community will determine the winning applicants and the amount of each award by comparing initiatives against the judging criteria and factoring in the online votes.

While the firm already financially supports a number of different causes, based on client feedback from a recent survey it decided it wanted to get the community to help it decide where to give next, says chief marketing officer Simone Hughes.

“We wanted to get into more of the micro-funding where it can effect real change with closer communities. So for example, someone may be seeking seed funds to improve a park or school yard — we wanted to provide an outlet for that kind of project.”

Applicants must clearly define the purpose for the funds requested and how the money will be managed for the duration of the implementation of the initiative and have a measurable impact in the community by 2014. Judges will consider factors such as originality, how much the community will benefit from the idea and whether it will generate a “pay it forward” effect.

Qualified ideas will be posted online, where visitors can vote for their favourites. Voting will close on August 31. Judging panels will also consider the number of positive votes when awarding funding.

Applications will be accepted until July 24 and online voting ends Aug. 31. Winners will be announced in September.

The International Chamber of Commerce has announced an agreement with Arbitration Place in Toronto to bolster the international body’s presence in North America.

Arbitration Place will provide office facilities for the ICC International Court of Arbitration to conduct its operations in Toronto.

Under the parameters of the agreement, Arbitration Place will provide office facilities for the ICC International Court of Arbitration to conduct its operations in the city. In return, ICC will advocate the use of Arbitration Place for arbitration hearings in Toronto.

Established just before the opening of an office of the ICC court’s secretariat in New York, the agreement is in line with the ICC’s objective to make the services of the Court’s Secretariat more accessible to parties, their counsel and arbitrators in the region.

“This is a very significant development for arbitration in Canada. I am thrilled by it,” says Barry Leon, chairman of ICC Canada and head of the International Arbitration Group at Perley-Robertson Hill & McDougall LLP.

Leon says arbitration practitioners are increasingly considering Canada as a venue for their arbitrations to resolve commercial and investor-state disputes.

Having the ICC commit to a presence at Arbitration Place will help make Toronto and Canada become more of a focal point for international arbitration, he adds.

“All Canadians who participate in international arbitration will benefit from this focus by the ICC on Canada,” says Leon.

“We are thrilled that the ICC, one of the oldest and most respected institutions for international commercial arbitration in the world, has recognized the quality of our facilities and service and will be advocating the use of Arbitration Place for hearings,” says Kimberly Stewart, CEO of Arbitration Place.

A decision by the Alberta Court of Appeal last week has some wondering if judges need more education around the powers of devices they themselves probably use every day.

‘[D]id they think it was small little elves within BlackBerry devices who were routing text messages to who they were going to?’ asks one lawyer. (Photo: Shutterstock)

In R. v Cockell the court reversed the conviction of Brian Allan Cockell on three counts of child luring using a computer system under s. 172.1(1) of the Criminal Code because it decided it wasn’t convinced the lower court had determined that the BlackBerry smartphone used to text message the complainants was in fact a computer system.

The accused used a BlackBerry to text message two girls aged 12 and 13. Contact was first made using using the chat service Nexopia. The meetings through Nexopia led to an exchange of cell phone numbers and text messages, then to physical meetings and sexual encounters with the girls.

The case raises serious questions about how the Crown and the judge in the case understand commonly used devices, says McCarthy Tétrault LLP technology and IP lawyer Barry Sookman, who blogged about the decision.

“I think it is a matter of judicial education. I’m sure they all use cell phones — I’m sure they all have smartphones — did they think it was small little elves within BlackBerry devices who were routing text messages to who they were going to? What would this be if it’s not a computer?”

All of the communication in question from the accused was sent via text message from a Blackberry to the complainant.

In his blog, Sookman note the offence of “luring a child” under s. 172.1(1) of the Criminal Code requires the offence be committed by means of a computer system within the meaning of s. 342.1(2) of the Criminal Code. That section defines the term “computer system” as “a device that, or a group of interconnected or related devices one or more of which, (a) contains computer programs or other data, and (b) pursuant to computer programs (i) performs logic and control, and (ii) may perform any other function.”

In its decision the appeal court stated:

There simply was no evidence, direct or circumstantial, that the appellant’s Blackberry was a computer system, or as to the content of any communications made by computer.

The trial judge incorrectly believed the defence to have admitted that the Blackberry met all the requirements of the definition of “computer system” in s 342.1(2) of the Criminal Code. He stated at para 20 of his decision that only the issue of identification was in play in relation to the three luring counts. His reasons do not otherwise address the issue of whether the Blackberry was a “computer system.”

But Sookman says the Crown should have brought forward technical evidence if there was a need and if there was a need for judicial evidence it could also have been decided based on judicial notice.

He notes there are also a number of previous cases where a cell phone has been proven to be a computer system. For example, in In R. v. Rocha, another Alberta court had previously held that given the broad definition of “computer system,” a cell phone could fall within the definition of computer system.

“For the judges not to recognize how basic the definition of a computer system is is really quite surprising in 2013. Are we going to have the same problems with the new anti-spam law proving a smartphone is a computer?”

Parliament amended the luring offence in July 2012 to remove the requirement that it be effected via a computer system, substituting instead a provision that it occur via telecommunications.

The accused was unsuccessful in his appeal on other counts on which he was found guilty including two of sexual assault, two of sexual interference, one of abduction, two of possession of child pornography and one count of making child pornography.

The Supreme Court of Canada has ruled that individual members of an Aboriginal group can’t use blockades or other “self-help” remedies when claiming a government breached its duty to consult, and in fact doing so amounted to “an abuse of process.”

In Behn v. Moulton Contracting Ltd., the SCC dismissed an appeal from individual band members of the Fort Nelson First Nation and endorsed the position taken by two lower B.C. courts.

Among the issues addressed by the SCC was whether it amounts to an abuse of process for Aboriginal individuals — in this case all with the last name Behn — to challenge the validity of government issued authorizations as a defence to a legal claim when they failed to take legal action to challenge the government’s authorization.

Writing for the court, Justice Louis LeBel noted:

In my opinion, the Behns’ acts amount to an abuse of process. The Behns clearly objected to the validity of the Authorizations on the grounds that the Authorizations infringed their treaty rights and that the Crown had breached its duty to consult. On the face of the record, whereas they now claim to have standing to raise these issues, the Behns did not seek to resolve the issue of standing, nor did they contest the validity of the Authorizations by legal means when they were issued.

In the case, members of the Aboriginal community had set up a camp blockade in October 2006 to interfere with a logging operation within Treaty 8 territory. The blockade meant the logging company, Moulton Contracting, couldn’t get access to or cut the timber within the traditional territory of the Fort Nelson First Nation where the company was authorized to do so.

The Crown had granted licences to the logging company to harvest timber in two areas of the Fort Nelson territory.

The company brought a tort action against the members of the band (the Behns), who argued the licences were void because they had been issued in breach of the constitutional duty to consult and because violated their treaty rights.

For its part, the logging company filed a motion to strike those defences. The lower courts held that the individual members of the Aboriginal community did not have standing to assert collective rights in their defence — only the community could do so. The lower courts also concluded a challenge to the validity of the licences amounted to an abuse of process, as the members of the community had failed to challenge the validity of the licences when they were issued.

The abuse of process is a key factor in this case, says Thomas Isaac, who heads the national aboriginal law group at McCarthy Tétrault LLP in Vancouver.

“They shouldn’t have been attacking the private third party [Moulton],” says Isaac. “What the court said was if they had a problem with this, they should have gone after the Crown approval, per se. That’s not a surprise but we haven’t had a court to date expressing it that way. It adds further credence to the view the law is becoming reasonably clear in this area.”

Isaac says the decision is contrary to the perception that provincial governments try to convey that the law is uncertain in this area.

“It is another decision in which the court has said ‘we are unwilling to point the finger at private third parties in terms of remedies.’ Unless the private third party has dirty hands in this, you see the court really being reluctant to applying remedies against private third parties,” he says. “If First Nations have a problem with the permits they should be attacking the permits, not the permit holder.”

The decision states: “To allow the Behns to raise their defence based on treaty rights and on a breach of the duty to consult at this point would be tantamount to condoning self-help remedies and would bring the administration of justice into disrepute.”

It’s one bullet point buried deep in the Ontario budget but it could have big implications for the class action bar.

On page 290 of last week’s budget, under a section regarding consultations with the Ontario Securities Commission, it’s noted the government “plans to propose further changes to update the Securities Act.” That may include, “if needed, following current court cases that the government is monitoring closely, suspending the operation of the secondary market civil liability limitation period while leave to proceed is being sought.”

“My assumption is that it’s speaking to the Timminco case,” says Jeremy Devereux, a partner with Norton Rose Canada LLP, referring to Sharma v. Timminco Ltd., which denied a class action based on limitation period.

Devereux notes there are also three major cases going before the five-judge panel of the Court of Appeal.

“The government wants the public to know it’s an issue they’re aware of and state their position, which seems to be that if it turns out the limitation period does expire in three years, even though leave is being sought, it seems this government’s is saying they are going to change that.”

The cases include Silver v. Imax, Trustees of the Millwright Regional Council of Ontario Pension Trust Fund v. Celesetica Inc., and Green v. Canadian Imperial Bank of Commerce.

“It looks like they’re waiting to see what happens with the cases currently before the Court of Appeal,” he says. “If the Court of Appeal finds a way of saying that the limitation period does expire in three years — provided you’re actually seeking leave to appeal from the court — even if it hasn’t been granted yet, I presume the government would say there is no longer a problem, we won’t do anything.

“But if the Court of Appeal says no, the limitation period does expire within three years, if you have not obtained leave, the government will intervene and amend the legislation to make it clear the limitation period stops running while leave is being sought.”

If a plaintiff intended to commence a securities class action, once they served the materials for leave under the Securities Act, then it would have the effect of stopping the limitation period from running.

Devereux notes that Justice Katherine van Rensburg in Imax and Justice Paul Perell in Celestica both found a way to allow the cases to continue even though leave had not been granted within the three year period.

Last July, in Green v. CIBC, Justice George Strathy took a different position and refused to certify based on expiration of the limitation period. In his view of the law, he wasn’t able to allow the case to continue. However, he noted in his decision that if it had not been “time-barred” he “. . .would have granted leave to pursue the statutory cause of action, and would have certified this action as a class proceeding for that purpose.”

Other items noted in the budget regarding the OSC indicate there is interest in updating the Securities Act including:

• expanding the insider-trading and self-dealing provisions, including in relation to their application to investment funds
• updating disclosure requirements for the exchange traded funds to provide plain-language, concise and comparable disclosure to investors that is more consistent with requirements that apply to mutual funds
• updating early-warning reporting and related requirements for take-over bids to provide more transparency to regulators and the public.

If you’re a lawyer or judge who has Aboriginal law experience and looking for new challenges, this may be the job for  you.

After five years on the job, Daniel Ish, chief adjudicator of the Indian Residential Schools Adjudications Secretariat, is stepping down and a search has begun for his replacement.

A request for proposals was issued April 29 seeking individuals interested in applying for the chief adjudicator job that oversees the Independent Assessment Process, which makes decisions on individual claims of abuse related to the Indian residential schools system.

The chief adjudicator directs the work of the Indian Residential Schools Adjudications Secretariat, the administrative body that manages the IAP hearing process.

The chief adjudicator position became vacant earlier this year when Ish, announced he would step down once a replacement is found.

“We are very fortunate to have had someone as dedicated as Daniel to guide the IAP through its first five years,” says University of Toronto law dean Mayo Moran, chairwoman of the oversight committee that monitors the implementation of the IAP. “I have been struck by his deep commitment to protecting the integrity of the IAP so that former students receive a fair hearing in a safe and caring environment.”

There are over 100 adjudicators who hear the individual claims for abuse arising out of the Indian residential schools and the chief adjudicator oversees the independent assessment process. The total number of applications the secretariat received was 37,716, and it has resolved over half of them, with 17,303 (full stats available here) awaiting resolution.

Moran says the job requires “a complex mix of legal and adjudicative experience and good judgment.”

Occasionally the chief adjudicator also writes some decisions on review cases.

“There are also political and diplomatic skills required,” says Moran. “We were incredibly lucky — Dan Ish is absolutely wonderful and we’re all feeling a bit bereft that we’re losing him because it was wonderful to have someone with such a great mix of human skills and professional qualities during this really important first six years.”

The selection of a new chief adjudicator will be managed by the IAP oversight committee, which includes representatives of former Aboriginal students and their counsel, churches, and the federal government.

A selection committee will review applications, conduct interviews, and make a recommendation. The committee’s selection must be approved by the Supervising Courts of the Indian Residential Schools Settlement Agreement.

Applicants for the position must have a law degree with at least 15 years at the bar, experience as a member of the judiciary or in the adjudication of claims, and have significant knowledge of Canadian Aboriginal people and their history, culture and current issues. The mandatory and rated requirements for the position are outlined on MERX. The deadline is May 24.

The new chief adjudicator is expected to be in place by early this summer.

Update 3:45 pm: Clarify number of cases before and resolved by the secretariat.