Renewed focus on risk management, compliance during pandemic

In the last few years they've become bigger issues and are getting even more attention lately

Renewed focus on risk management, compliance during pandemic

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When it comes to writing law books you’ve got to think of the new generation, says professor and author Kenneth Jull.

Jull, who teaches the Corporate and Financial Crime and Compliance course in the LL.M. program in Criminal Law at Osgoode with his co-author Justice Todd Archibald as well as a course entitled Financial Crimes and Corporate Compliance at the University of Toronto Faculty of Law, says he sees it in his students all the time: they look for the fast answer, “which is not necessarily the deep answer — they want that quick fix.”

They need to know the information, they need to master this, but how do you present it to them in a way thats compelling?”      

This isn’t an issue confined to his students either: practising lawyers are busy and want access to relevant information quickly and succinctly. To help achieve this, Jull, who practises in the areas of litigation and compliance at Gardiner Roberts LLP and recently completed a two-year interchange with the Competition Bureau Legal Services as general counsel, suggests including useful tools like templates and flow charts in texts.

In 2020, Archibald and Jull revised the book, Profiting from Risk Management and Compliance, to make it more AI friendly. They also introduced a flow chart, laid out with 1-19 steps, and Jull observed that “my students and my clients love it.”

"Its a tremendous amount of work to update our book, but its worth it because I can see already how much more user-friendly the template is — it helps lawyers in their practice and makes their lives easier.”

Archibald and Jull were inspired to write their book, which was recently added to WestlawNext Canada’s new Corporate Commercial Collection, based on their experience representing  senior executives who were charged with a regulatory offence (this was of course before Justice Archibald was appointed to the bench). Jull recalls one case in particular that demonstrated how the allegation of a financial or regulatory offence could impact an individual. The corporation where his client worked told him if he was convicted, his career was finished. On top of that, everybody knew about the case because the regulator had interviewed competitors and suppliers. This case undermined the theory that a regulatory offence has minimal stigma.

“I started thinking, I don't think this is right and I think this needs some attention,” Jull says, adding he won the case and his client, who was “not a physically affectionate type of guy,” hugged him.

Jull sees the same problem recurring in 2021 with the rise of administered monetary penalties (AMPS)  which are also said to involve little stigma. AMPS don’t necessarily involve a court: it’s a tribunal. Jull says this approach is becoming more popular across the country “in all sorts of areas, whether it’s securities or federal regulation or environmental.” It’s “slowly taking over the criminal regulatory law because a tribunal requires a lower standard of proof on a balance of probability, you don’t have to prove anything beyond a reasonable doubt, the evidence standards are much lower.” Archibald and Jull recently wrote about the burdens of proof in their 2020 update and co-authored an article entitled “Clear and Convincing Evidence Cannot Reside in the House of Balance of Probabilites: A Scientific Approach” in The Advocates' Quarterly (March, 2021) 51 Advoc. Q. 315.

“Many of my clients now are facing the creep of administrative monetary penalties and we need to have due diligence systems in place,” Jull says.

One example of administrative monetary penalties is the TicketMaster case, which dealt with digital advertising. During his time at the Competition Bureau Jull was on that case, which highlighted how seriously the bureau is taking advertising in the new, digital world — in fact, they have just held a Digital Summit. He calls it “the new wave” and says the bureau is hoping the profession understands the importance of compliance in this area.

Jull is also seeing challenges crop up in the area of mergers and acquisitions, particularly if you're dealing with a US buyer of a Canadian firm. Americans are “very interested and concerned about compliance,” because in the US those laws are enforced where Canadians are not as worried about compliance because there are relatively low levels of enforcement.

“This is one of the struggles I face,” Jull says, noting things are changing in Canada in this regard because of the SNC-Lavalin case — where he testified before the justice committee as an expert witness on remediation agreements and covered that experience in his book.

The case brought a lot of exposure to his area, especially when it came to deferred prosecution agreements. Before SNC-Lavalin, nobody knew what they were “and then it became a bit of a household name,” he says. With the current WE Charity Scandal, Jull says it’s all back in the news again.

“In the last year or two, all of a sudden compliance has become a bigger issue and it seems to be getting some attention,” he says.

Financial crimes — fraud, price fixing, bribery, insider trading — are covered in separate chapters in Archibald and Jull’s book, as are the basic principles of risk assessment. Many people, including lawyers, don’t understand those basics because it’s an engineering concept, Jull explains. His text brings mathematical matrix analysis to help educate people on how to do risk assessments and these priority-setting tasks. The concept of risk assessment and risk management is critical as everyone continues to navigate the COVID-19 pandemic, Jull says, giving the example of worker protection under Canadas Criminal Code, s. 217.1, which requires corporations take steps to protect workers.

“You can see the application in these challenging times both of risk assessment and the Criminal Code,” he says. “I do think there’s some recognition of that and lawyers are appreciative right now of their risk assessment issues in the pandemic.”

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