Law Times

Law Times • march 23, 2009 NEWS PAGE 3 Focus shifts to getting in line with amendments L BY ROBERT TODD Law Times country, but have shifted their focus to getting clients in line with amendments in Bill C-10. One lawyer, meanwhile, says amendments to the Competition Act and Investment Canada Act will keep counsel busy. "We're going to have to do more to get mergers through," says Julie Soloway, a partner at Blake Cassels & Graydon LLP. "We're going to have to do more compliance and advi- awyers remain adamant that elements of the recently adopted federal budget implementa- tion bill could hamper business interests in the vote, after Liberal leader Michael Ig- natieff urged its passing to ensure em- ployment insurance claimants receive an extra five weeks of benefits. Soloway suggests lawyers must learn sory type work for every company, and for companies that are large or have high shares in their respective markets, we're going to have to counsel them on conduct issues because of new administrative monetary penalties," she says. Possibly the most controversial amendment in the legis- lation is a U.S.-style, two-stage merger review process. That new system will see an initial review period of 30 days, along with a new power for the commissioner of competi- tion to require a second period of a further 30 days, fol- lowing full compliance of a request for documents. The measure means the commissioner could stall the closing of any transaction without being subject to judicial oversight. The previous system consisted of a maximum 42-day merger review, and the commissioner could seek a continu- ance from the Competition Tribunal if able to show more time was needed to study the merger. The Canadian Bar Association unsuccessfully pressed Ottawa to sever sections of the budget implementation bill, saying the changes to the Competition Act were too expan- sive to be adequately debated as part of Bill C-10. But the bill was quickly ushered in after a 50-4 Senate to live with the new measures. "The scales are now tipped strongly in the Competition Bureau's favour," she says. "They have more power to ex- tend the merger review period prior to closing. This means less certainty over timing for mergers that raise substantive competition issues. You used to be able to run the clock in the old system." The system also means higher com- pliance costs, she says, as there are built- in incentives to ask for more informa- tion to extend the review period. Soloway says she's heard from many concerned clients since the legislation passed. "They want to be compliant with the law," she says adding she's advising clients to take a look at their compliance planning and re- consider what they have in place. "Agreements with competitors of certain types — like price fixing or allocating sales or territories, customers' mar- kets — are now per se illegal," says Soloway. Under the old system, you had to prove there was an undue lessening of competition, she says. Now, simply entering into the agreement is considered a criminal act, which makes it much easier for the government to secure a conviction. "We are cautioning clients to be super-careful about their compliance planning, making sure compliance policies and programs are in place, and that their employ- ees understand what's at stake under the new law." 'We're going to have to do more to get mergers through,' says Julie Soloway. Hoskin & Harcourt LLP and chairman of the firm's competition/antitrust law group, points to the strong incentive for companies to leave no stone unturned in getting in line with the new regulations. Conspiracy penalties, he notes, have been "substantially" raised under the new regulations, up to 14 years' impris- onment from five years, and the financial penalty is up to $25 million from $10 million. Peter Franklyn, a partner at Osler focus on "creating a transparent and well-understood en- forcement policy, through publishing guidelines on how they're going to interpret and apply these new provisions." John Bodrug, chairman of the CBA's national competi- tion law section, says the association plans to work with the Competition Bureau on adoption of the new legisla- tion. He adds that the bureau may limit the scope of some of the measures in its guidelines, but that will not be a "complete answer," he says. "A lot of the practical risk here relates to private actions and what private parties might do to either try to avoid contracts or sue for damages for conduct that might technically be illegal." Looking ahead, he says the Competition Bureau must bigger now," says Franklyn. The standing Senate committee on banking, trade, and commerce will examine and report on elements of the bill dealing with the Competi- tion Act. But Franklyn says, "That's really a matter of closing the barn door after the horse has left. I don't see that having much consequence." "The risks of being offside are much LT Litigants: be careful with social networking sites A BY ROBERT TODD Law Times working site shows a new era has arrived for litigants, says the chair- man of Osler Hoskin & Harcourt LLP's litigation department. "The question of Facebook Superior Court decision compelling production of pages from a social net- is really, from the point of view of people who worry about pri- vacy in the society, very impor- tant," says Osler partner Larry Lowenstein. "You can see why they're up in arms, because their privacy is being invaded." But, he adds, "just because it's pri- vate and embarrassing, doesn't mean it's irrelevant." He says, "What you're seeing here is that what e-mails have done to those of us who practise commercial litigation, which has revolutionized commercial litigation, Facebook and similar social interaction sites are doing to personal litigation." For example, he says, when sophisticated disputes go through commercial litigation, gigabytes of e-mail data must be reviewed by teams of junior lawyers to deter- mine relevance. "What the elec- tronic and digital generation is learning is that the Internet creates an electronic record of our lives, which we create voluntarily, and we create at our peril. For generations people are going to have what they put on their Facebook walls come back to haunt them," he notes. "This is just an extension of ordinary rules of evidentiary pro- duction," he says. "And the inva- sion of privacy — surely people know when they have 350 friends on Facebook, that they're hardly living a private life anymore." Justice David Brown reversed a decision of a case management master in Leduc v. Roman. The judge ordered plaintiff John Leduc to submit to cross-examination on the content of his Facebook profile, which the defendant in the motor vehicle action, Janice Roman, had earlier sought to compel. Leduc's claim follows a Febru- that it was up to the defendant "to demonstrate that this plaintiff has relevant materials on this plaintiff's web site." He said the request was "clearly a fishing expedition." But Brown noted that, under ary 2004 car accident in Lindsay, Ont., according to Brown's deci- sion. Leduc "claims as a result of the defendant's negligent driv- ing his enjoyment of life has been lessened and the accident caused limitations to his personal life," said Brown. ery in November 2006, at which time he was not asked whether he had an active Facebook profile, said the judge. During a medical exam in May 2006, said Brown, Leduc told a psychologist he was unable to play the sports he en- joyed before the accident. A defence psychiatric evaluation was conducted in September 2007, and a subsequent medical report indicated that Leduc told the psy- chologist he had "a lot" of friends on Facebook, said Brown. Defence counsel also conducted Leduc was examined for discov- a search of Facebook profiles and found that Leduc kept a Facebook account, although his publicly ac- cessible profile included only his name and picture, said the judge. In June 2008, the sought orders requiring the in- terim preservation of all informa- tion in Leduc's Facebook profile, production of all information in the profile, and production of a sworn supplementary affidavit of documents, said Brown. But while Master Ronald Dash defence acknowledged that Leduc's Face- book profile "might have some relevance to demonstrating the plaintiff's physical and social activi- ties, enjoyment of life, and psycho- logical well-being," he declined to order production, said Brown. The master instead determined Untitled-1 1www.lawtimesnews.com 3/18/09 8:55:13 AM the Rules of Civil Procedure, con- tent posted on sites like Facebook is considered "data and informa- tion in electronic form" that is producible as "documents." He said, "Given the pervasive use of Facebook and the large volume of photographs typically posted on Facebook sites, it is now incumbent on party's coun- sel to explain to the client, in ap- propriate cases, that documents posted on the party's Facebook profile may be relevant to allega- tions made in the pleadings." Brown later commented, "Facebook is not used as a means by which account holders carry on monologues with themselves; it is a device by which users share with others information about who they are, what they like, what they do, and where they go, in varying degrees of detail." LT

• Cover
• Competition Act
• Dead Time
• Focus On Corporate Restructuring & Insolvency