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August 10, 2009

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Follow McKELLAR STRUCTURED SETTLEMENTS INC. 1-800-265-8381 $3.55 • Vol. 20, No. 25 ckellar_LT_Jan14_08.indd 1 1/8/08 3:03:02 PM Rising complaints to IIROC not mirrored by litigation Savvy advice averts lawsuits BY ROBERT TODD Law Times stemming from portfolio losses caused by the recent economic recession, says a Toronto counsel who acts for dealers. Mark Evans, a partner at Fraser Milner I Casgrain LLP whose practice focuses on se- curities and capital markets, says Investment Industry Regulatory Organization of Canada statistics show "a trend of increasing com- plaints." Th e organization — the national self-regulator of investment dealers and trad- ing activity — reported 1,205 complaints in 2007 and 1,312 in 2006. Th at number rose to 1,532 in 2008, and as of June 30 this year, 733 complaints had been received. "But what we haven't seen . . . is an in- crease in actual lawsuits — civil complaints launched across the country," notes Evans. IIROC also reports that 382 civil claims were launched against its members in 2006, 277 in 2007, and 224 in 2008. As of June this year, 189 civil claims had been pursued. Evans suggests that dealers have not been sub- ject to the high volume of lawsuits experienced during the last severe market decline of the early 2000s following the bursting of the tech bubble. He says dealers have been "much more proactive and committed" to compliance and supervisory programs. "Our clients are committing a lot of time and resources, and a lot of bright folks are in- volved in ensuring that those processes are ef- fective and work," he says. "I think that's the primary driver of that trend." 'The ground has shifted. This is a once-in-a-gener- ation change, and the objectives and circumstanc- es of many retail clients will have changed from where they were a year ago,' says Mark Evans. Evans says he and his FMC colleagues are responding to what he calls "the current eco- nomic climate" by reconnecting with retail clients, and have advised their own clients to do the same. He suggests that may have helped dealers avoid the type of outcry that came with portfolio losses early this decade. "Th e ground has shifted. Th is is a once-in- nvestment advisers should thank their lawyers for the savvy advice that has helped them avoid an infl ux of lawsuits a-generation change, and the objectives and circumstances of many retail clients will have changed from where they were a year ago," he says. "Our advice to our clients has certainly been to use this as an opportunity to go and reconnect with those clients and set the ob- jectives again, set the parameters again." He adds that his clients are taking notice of clients of their own who are eager to quickly recoup losses incurred over the recent reces- sion. He says they are taking steps to protect themselves from clients who may make "reck- less" attempts to regain lost wealth. Such clients have protected themselves, says Evans, by "not agreeing to act on that client's behalf in the pursuit of such a strat- egy, as they're certainly entitled to do, but similarly the client is entitled to purchase the securities that they desire." He says clients also seem to have taken heed of lawyers' advice to take notes of con- versations with their clients. "It still remains the single most eff ective way for investment advisers to protect them- selves," says Evans. Nigel Campbell, a partner at Blake Cassels & Graydon LLP who practises mainly in se- curities and corporate-commercial litigation, often gives speeches within the industry on the need for risk-management measures. "I would like to think that is helping," he says. "I do think people are generally more in tune with regulatory and civil requirements, so there may be a more profi cient audience than perhaps they once were." But he points out that it's diffi cult to com- pare the current market instability to the tech bubble situation. See 'Who, page 2 Jury vetting practice used in nine trials BY TIM NAUMETZ For Law Times OTTAWA — Th e number of On- tario trials where prosecutors used police information to vet prospec- tive jurors is substantially higher than the government has disclosed to date, Law Times has learned. Attorney General Chris Bent- ley's department has informed addition to two trials in Barrie, covered by the Simcoe County Crown jurisdiction, that were dis- rupted upon disclosure prosecu- tors had secretly obtained police information to screen jurors in murder cases. One was declared a mistrial; the jury in the other case was dis- missed. Th e nine new disclosures of amount, reportedly $95,000 and a record in Canada for costs award- ed because of a mistrial, may be subject to a publication ban that was imposed on a defence applica- tion to have the charges dismissed because of undisclosed jury vet- ting and other issues. Defence lawyers in that case also learned Crown attorneys had improperly obtained information Instead of investigating only those who were suspected of submitting false questionnaires, the Crown chose to search all potential jurors. nine defence lawyers in Simcoe County that Crown attorneys used the practice in past trials dur- ing which they represented defen- dants, a survey by the Criminal Lawyers' Association found. Th ose cases are likely in improper jury vetting are also likely over and above a third mur- der trial in Kingston that was also suspended earlier this summer as a mistrial. Costs have been awarded to the defence in that case, but the on juror backgrounds from police sources, without informing de- fence counsel or the court. Th e wider extent of the practice in Simcoe County was disclosed during a review by Bentley's de- partment of Crown procedures in the Barrie area as well as Essex County, which includes Windsor Crown offi ces. Adam Boni, a Toronto director of the CLA, tells Law Times the defence lawyers in the nine cases told the association the attorney general's offi ce informed them the same practice had occurred in past trials with which they were involved. Boni disclosed the information in an interview about a brief the association submitted last week to Privacy Commissioner Ann Ca- voukian, who is conducting her own inquiry into the controversy. A spokesman for Bentley did not comment directly on the in- formation Boni's association ob- tained from the nine lawyers. Spokesman Brendan Crawley See Ministry, page 2 Inside This Issue 3 LSUC Award Winner 7 Second Opinion 9 Focus On Corporate & Commercial Law Quote of the week "Having a company for a long time in some kind of insolvency process . . . has a very serious negative impact on the long-term relationship [with customers]." — Kevin McElcheran, a partner in the bankruptcy and restructuring group at McCarthy Tétrault LLP See Prepackaged, page 10 Covering Ontario's Legal Scene on August 10/17, 2009 Maybe you need a better mousetrap. Tel: 416.322.6111 Toll-free: 1.866.367.7648 Industry leader in legal software for real estate, corporate and estates for over a decade

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