Law Times

Law Times • March 11, 2013 Monahan speaks against shielding sensitive memos through privilege BY CHARLOTTE SANTRY Law Times G overnment lawyers must not allow ministries to "shield" sensitive memos behind solicitor-client privilege, Ontario's deputy attorney general has warned. Patrick Monahan made the remarks at the Ontario Bar Association on March 6 at an event held to discuss government lawyers' public interest role. They were in response to a question by an audience member about how lawyers should respond when clients ask for information "that's not a legal opinion" to be "sheltered within a document" covered by solicitorclient privilege. This would generally make the document confidential and exempt from freedom of information requests. Monahan replied: "I think that's an excellent observation. . . . The principle of Waivers of privilege should be an solicitor-client privi- option only in 'very rare and exceplege is that it shouldn't tional circumstances,' says Patrick be abused or misused Monahan. or taken beyond its proper bounds precisely because if that were done, it would over time undermine the justification for the privilege and ultimately its legal protection." He said it's "important that we, as lawyers working in government, [do] not allow a situation to arise whereby there's this attempt to take an overly broad approach to solicitor-client privilege and try to [create a] shield under the fact that a lawyer has put their name to a memo." He said he could "understand how lawyers, particularly in certain ministries, will face challenges." He advised them to raise issues with their own ministry first and then at the deputy attorney general level if necessary. He also spoke against attempts to water down solicitor-client privilege. Doing so, he said, could discourage governments from seeking timely legal counsel or writing advice down in case it became public. Alan Belaiche, principal at Belaiche Law, asked whether there were arguments for waiving privilege in some cases given the "competing value of increased public expectations for transparency." But Monahan said waivers should be an option only in "very rare and exceptional circumstances" so as not to set a precedent. Monahan expanded on his thoughts in a paper on the public interest and the role of the government lawyer. The report emphasized the need for government lawyers to highlight potential legal problems with planned policies with impartiality. It comes as the federal Department of Justice is facing accusations from one of its own lawyers, Edgar Schmidt, of failing to fully consider whether proposed laws could be unconstitutional. Monahan wouldn't comment on the Schmidt case at the OBA event but said "if a government takes a view that [it] wish[es] to achieve a particular policy objective and that's a matter of significant priority for a government, I think as lawyers we certainly have an obligation to try to work constructively with the democratically accountable and elected government so as to enable those objectives to be implemented. "There may be some cases where there's more difficulty in finding that accommodation, but I can say certainly from Ontario's point of view that those kind of accommodations are found." LT Page 3 NEWS Tax Court rejects deduction for CLE costs Ruling on course expenses 'gives other lawyers a real problem' BY ELIZABETH THOMPSON For Law Times L ruling "is unfair for people who work for companies" and could have a significant impact on a number of lawyers across the country. Jamieson says he has picked up the tab for maintaining his credentials and his continuing legal education courses since J.D. Irving hired him 34 years ago. "There is going to be a lot of demand on companies now to pay this." Jamieson says the CRA argued that in order to qualify as a business, lawyers must have a separate office and an accounting system and advertise. However, while corporations may allow in-house lawyers to act as a trustee or do pro bono work, they would frown on them setting up a separate office and advertising, he notes. While obligatory courses are relatively new in Canada, Jamieson says the bar in places like New York and Ohio have required them for several years. Although he has claimed the costs of the courses over the years, 2009 was the first time CRA disallowed the expense. It allowed the expenses in 2010 and 2011 when he reported business income. ife could get a bit more complicated for some lawyers across Canada as they head into tax season this year after the Tax Court of Canada disallowed one lawyer's expenses for mandatory continuing legal education courses. "I think this gives other lawyers a real problem," says David Jamieson, executive vice-president with J.D Irving Ltd. in New Brunswick. "I also think it gives a problem to directors who are taking director training courses." The comments come after Justice Valerie Miller recently rejected Jamieson's appeal of the Canada Revenue Agency's decision to disallow $8,242 in expenses in 2009 to attend continuing legal education courses in Chicago and Vancouver and maintain a home office. At the same time, the CRA allowed his deduction of $2,506 for professional membership fees. Jamieson, who's a member of the bars of Ohio, New York, and Massachusetts, argued he had to take at least 12 hours a year of continuing legal education courses to maintain his professional These kinds of decisions come out pretty regularly with respect certification in those jurisdictions. to other industries. Anybody that watches enough of these Jamieson argued he was in the business of being a lawyer and "earned fees as decisions would have seen similar fact patterns in other cases. a lawyer from his services as a director on various boards of directors and as a trustee for various Jamieson says the ruling could also call into question trusts," Miller said in the ruling. the fees paid for directors' courses. The CRA argued Jamieson couldn't deduct the ex"Seems to me that this opinion, the way it is written, penses related to the courses because he didn't earn any is saying that if you hold an office, you can't deduct those business income that year outside of his salary as an em- kinds of expenses." ployee. It disallowed the expenses for the home office Jamieson doesn't plan to appeal the ruling, however. after concluding Jamieson's conditions of employment Adam Aptowitzer, a tax lawyer with Drache Aptowwith J.D. Irving didn't require him to have one. itzer LLP, says the decision is similar to rulings that have In her ruling, Miller questioned whether Jamieson's touched other occupations. work constituted a business. "These kinds of decisions come out pretty regularly "With all due respect to the appellant, being a lawyer with respect to other industries. Anybody that watches is not in and of itself a business," she wrote. "One must enough of these decisions would have seen similar fact practise law as a business to be in the business of law. patterns in other cases." There was no evidence before me from which I could Aptowitzer suggests lawyers either ensure they have conclude that the appellant had a law practice." business income if they want to deduct continuing legal Miller said Jamieson's director's fees were treated as education costs or have their employer put it in writing income from an office and were included in the T4 slip that they have to maintain their legal credentials as a issued by J.D. Irving. While Jamieson acted as a trustee condition of employment. for his sister-in-law's testamentary trust, he wasn't in the "If they would lose their job because they are not business of being a trustee, Miller added. an active member of the law society, then presumably While Jamieson also argued his status as a member of those expenses would be deductible if they had to pay the legal bar required him to provide pro bono services, them personally." the expenses racked up as a result of his work as a memRoy Thomas, director of communications for the ber of the National Council of Moritz weren't deduct- Law Society of Upper Canada, says the decision is unible, Miller ruled. likely to affect demand for its continuing legal education "The expenses he incurred to perform his pro bono programs. services are not deductible nor should they be deduct"It would appear that the court has differentiated ible. The taxpayers of Canada should not have to bear between the business expenses of an individual versus the expenses associated with the appellant's pro bono corporate expenses," he says. "We don't expect this deciservices." sion will have an impact on our continuing professional Reached on vacation in Florida, Jamieson says the development programs." LT Convocation approves new tariffs for costs awards BY YAMRI TADDESE Law Times C onvocation has approved new tariffs to determine the compensation for legal professionals involved in hearing panel proceedings. Panels will use the new tariffs when considering costs orders against the Law Society of Upper Canada or the subject of a proceeding. In June 2012, a joint committee report discussed the outdated tariffs used by the law society to compensate some professionals. The current tariffs date back to 1993, the committee said. "The tariffs for licensed paralegals should set rates that recognize the value of the increased www.lawtimesnews.com competencies and responsibilities of licensed paralegals," according to the report. "Similar to rates for counsel, rates for licensed paralegals should be based on the number of years of experience." The new tariffs mean the starting pay for paralegals will be equal to that of an articling student and will increase based on the number of years of experience. But the tariffs don't mean cost awards should be set in stone, according to a motion brought forward during Convocation on Feb. 28 that said members of hearing panels should draw from the jurisprudence to award amounts they see fit. The motion also included a new set of criteria for awarding costs, citing the "absence of clear criteria or factors to be considered by the hearing panel when determining costs awards." The following are the new tariffs for legal professionals: • Investigation counsel at $190 per hour. • Complaints resolution counsel at $190 per hour. • Forensic auditors at $190 per hour. • Licensed paralegals with 10 or more years of experience at $150 per hour declining to $90 per hour for someone with one to four years of experience. • Investigators at $90 per hour. • Complaints officers at $90 per hour. LT

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