Law Times

June 8, 2009

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McKELLAR STRUCTURED SETTLEMENTS INC. 1-800-265-8381 $3.55 • Vol. 20, No. 19 ckellar_LT_Jan14_08.indd 1 1/8/08 3:03:02 PM Inside This Issue 5 Oaths of Office 6 Social Justice 9 Focus On Internet/ E-commerce Law Quote of the week "It is also very interesting and exciting to think of sports properties re-energizing the southern Ontario market." — Michael Copeland CFL chief operating officer and general counsel See Opportunity, page 15 Covering Ontario's Legal Scene From Marriage Contracts To Divorce Judgments and Everything in Between Visit today! DMOne lug_LT.Feb.09.indd 1 Criminal lawyers boycott legal aid 'The system is broken' BY ROBERT TODD Law Times C riminal defence lawyers in Toronto say they are sick of propping up the province's legal aid system by accept- ing rates that barely cover their overhead costs, and will boycott homicide and guns-and-gangs cases until the tariff is boosted. Criminal Lawyers' As- sociation president Frank Addario says over 200 law- yers have committed to the indefinite boycott, which was hatched through a reso- lution at the CLA's May ex- ecutive board meeting. "By taking these certificates and acting as if they were suf- ficient compensation for the complexity and seriousness of the cases we were drawing a curtain in front of the problem," says Addario. "The strong sentiment of the board was that we should no longer cover up for the gov- ernment, or paper over the problem. That we should reveal it for all to see." Addario says he submitted a business plan to Attorney General Chris Bentley in March, outlining a roadmap to a tariff hike that would be revenue neutral for complex cases with senior lawyers. When he received no response to that proposal, Addario sent a let- promise, which is equal access to justice for everyone." The CLA does not have a specific amount to which it wants the tariff increased before ending the boycott, says Addario. "It's a dynamic process and The current top legal aid rate of $98 per hour 'would cause most lawyers with overhead in a downtown office and with staff to giggle,' says Frank Addario. ter to Bentley in April outlining the CLA's ongoing concern about the tariff. The boycott was announced after Bentley failed to respond to that letter by the association's May 30 meet- ing, as Addario had requested. Addario says he was "overwhelmed by the in- tensity of the resolution [at the executive meeting] and in my conversations with lawyers since then. I think there's a pretty firm belief throughout the bar that the time has come to bring this issue out. And I'd emphasize that it's not as if anybody can make the system any worse than it is. The system is broken. It doesn't deliver on its primary there are a number of consid- erations that both we and the government need to take into account, including the cur- rent economic situation. We are realistic," he says. The current top legal aid rate of $98 per hour "would cause most lawyers with overhead in a downtown of- fice and with staff to giggle," says Addario. He notes that lawyers who work on legal aid cases end up donating many hours due to Legal Aid Ontario's "very limited" yearly budget. The province gave judges of the Ontario Court of Justice 83 per cent in raises from 1997 to 2007, and Crown lawyers 57 per cent more compensation over that period. But since 1987 legal aid rates for lawyers acting on behalf of the poor have grown by only 15 per cent. Attorney General Chris Bentley says the province's 15 per cent in increases to the tariff over the past five years "doesn't make up for the 15 and a half years before of cuts and freezes." "I understand some of the frustrations," Army of 500 lawyers retained for auto deals BY TIM NAUMETZ For Law Times OTTAWA — An army of 500 law- yers was retained for the insolvency negotiations that led to the un- precedented government bailouts of General Motors and Chrysler, Ontario lawyers estimate. One of the lawyers who was involved with a Canadian aspect of the GM restructuring tells Law Times he knew he was watching history unfold from the inside. "There was a sense that we were all seeing something, and still are, seeing something that is historic," says Tony DeMarinis, a partner and co-chair of the restructuring and insolvency practice at Torys LLP. "It is extraordinary, it is excep- tional, it's extraordinary in every sense," he adds. DeMarinis acted for General Motors Acceptance Corporation in a related action with GM Canada bondholders in Nova Scotia, and was also one of the lawyers retained by the government of Canada in the complex negotiations. He agrees with Justin Fogarty, a partner at Bennett Jones LLP and vice-chairman of the Interna- tional Bar Association committee on insolvency and restructuring, that up to 500 lawyers were likely retained by the governments, au- tomakers, bondholders, creditors, and unions involved in the talks. The number includes an esti- mated 50 lawyers from Canada, primarily with major Toronto- based firms. "It's a hard number to estimate and my guess is probably nobody really knows, but my gut tells me that's probably the right number," says DeMarinis. Both lawyers note that one of the central features of the massive restructuring for GM and Chrysler was the fact that both parent com- panies filed for bankruptcy protec- tion only under the U.S. Bank- ruptcy Code — and did not file for protection under Canada's Com- panies' Creditors Arrangement Act for their Canadian subsidiaries. In nearly all cross-border in- and solvencies restructuring, U.S. parent firms file for protec- tion under both Chapter 11 of the U.S. code and the Canadian bankruptcy protection legisla- tion, Fogarty and DeMarinis say. The reasons the automakers sought protection only in the US. included an urgent need to reach agreements quickly and the fact that most major bondholders and major creditors were based in the United States. There was a danger as well that negotiating separate restruc- turing deals in Canada and the U.S. could lead to a cumbersome "patchwork" of agreements involv- ing subsidiaries around the world. "It's much more rapid and cost- effective," says Fogarty. Another lawyer who is accom- plished in the practice points to a major difference between Canadian and U.S. bankruptcy legislation. The U.S. code allows com- panies to "repudiate" collective agreements as they try to reach a balance between banks, creditors, and their employees. In Canada, court decisions based on the 1933 Companies' See DeMarinis, page 4 WHICH DIRECTION IS BEST FOR YOU? RainMaker Group 110 Yonge Street, Suite 1101 Toronto, Ontario M5C 1T4 Untitled-7 1 Tel: 416-863-9543 Fax: 416-863-9757 5/29/08 1:05:49 PM June 8, 2009 1/29/09 3:17:39 PM See Government, page 4 Photo: Phil Brown

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