Law Times

Law Times • apriL 20, 2015 Page 5 www.lawtimesnews.com "I'd even offer the client, if he or she wanted to, to get indepen- dent legal advice in that regard," says Heller. In Khan, Downes rejected the idea that Khan was uncertain about wanting to testify. "I find that Mr. Khan was steadfast in his position, and that he consistently told trial counsel he wanted to testify," he wrote. "Trial counsel's suggestion that he agreed with her decision or that he had never expressed a desire to testify before trial is undermined by the inconsistency in her evidence, and by the fact that she was unable to assist the court with any details of her conversations with Mr. Khan on the issue because none of those conversations were reduced to writing." The trial counsel also testified she felt it was unnecessary for Khan to testify as his statements to police were before the court, a rationale Downes called "puzzling." "The first rationale is puzzling: trial counsel sought to ex- clude Mr. Khan's statement as involuntary," he wrote. "I ruled it admissible on the same day that the Crown commenced calling evidence on the trial proper. Counsel had no way of knowing what that ruling would be, yet according to her, a key component of her defence strategy depended on the statement being admitted." Lawyer Jennifer Myers says whether to testify or not is one of three choices accused individuals get to make. The other two are whether to plead guilty or not guilty and whether they prefer a trial by jury or an individual judge. "If [clients] need to get up there and tell their story and that's what it is, then that's what they need to do." In Khan, the judge also rejected the Crown's argument that Khan had ceded all decision-making power to his trial counsel. Khan didn't simply go along with the decision not to testify, wrote Downes, adding the problem isn't so much who made the decision but rather the defendant's lack of knowledge that it was his to make. "The decision was not made with Mr. Khan's full knowledge of his rights. Even if he acquiesced to the advice of his counsel (and I do not accept that he did), he was not aware that on this issue the final decision was his." While lawyers may have a good indication of what the client's evidence may be, Downes suggested counsel can't be certain of the impact of what they say until the court hears it. "Attempting to piece together what an accused's evidence would probably sound like is fraught with difficulty," he added. LT NEWS Continued from page 1 Mistrial declared Call for 'fresh start' for auto insurance Peter Downard's Commitment to You 1. Support for Equality and Diversity 2. Support for Better Access to Justice 3. Support for Balanced Regulation 4. Support for Mentoring and Skills Development www. p e te rd ow n a rd .c a • 41 6 - 8 6 5 - 4 3 69 Fasken Martineau, 333 Bay Street, Suite 2400, Toronto, ON M5H 2T6 Among Peter's supporters are the following distinguished lawyers: Geoff Adair John Campion Brian Gover Bob Harrison Doug Hunt Don Jack Jeff Leon David Lepofsky Jennifer McAleer Will McDowell Eugene Meehan Willy Menninga Mayo Moran Susan Opler Allan Rock Mark Sandler Paul Schabas Peter Wardle "Peter will be an excellent bencher - he will bring to the issues an open mind and will consider all points of view before making his decision." - Derry Millar Peter Downard @Downard4Bencher Untitled-3 1 2015-03-17 10:32 AM to conduct an independent review of the insurance in- dustry in Ontario. The insurance bureau, however, was quick to dis- credit the study. The authors "are reaching completely misleading conclusions about the industry profits by excluding one-third of the industry," it said in a state- ment. When taking into account all insurers, the return for the industry was very small, it suggested. Lazar denies the excluded portions of the industry amount to one-third. While he can't say with certainty what the percentage is due to a lack of public data, he believes the number is about 10 per cent. In the study, the researchers noted they had excluded companies with negative returns for good reason. "It is reasonable to exclude the companies with nega- tive [returns on equity], especially over an 11-year peri- od, and focus on the profitable ones," they wrote. "Eco- nomic theory is quite clear that unless a company earns at least a risk-adjusted, competitive rate of return over time, the company will exit the industry. For a company with negative [returns] to remain in the industry, either the accounting rules employed understate its profitabil- ity from an economic perspective, or the business unit with a negative [return] generates value for one or more other business units in the company." When it comes to the role of legal fees in insurance costs, Rastin says lawyers are among the most heavily regulated of professions. With counsel and their clients arranging the fees, it's clear lawyers don't drive up costs, he suggests, noting those who are unhappy with their legal bills can seek a free assessment by the courts. "It is a mistake to believe the big insurance hype that we need to be looked at or regulated. We're already heavily regulated," says Rastin. Lazar says when FSCO retained him and Prisman in 2013 to look at the issue, the duo concluded the prof- itability benchmark should have fallen over the last 20 years to a 5.6-per-cent return on equity by 2012. Since suddenly lowering it from the existing 12 per cent to six per cent would have been "too drastic," the recommen- dation was to lower the profit cap progressively over a 10-year period, Lazar adds. Since their recommendation, two things have hap- pened, according to Lazar: "One, they [FSCO] initially cut the benchmark from 12 per cent to 11 per cent and more recently . . . they changed their methodology to a return on premium rather than a return on equity." The chosen return-on-premium benchmark is six per cent when the equivalent of an 11-per-cent return on equity should have been about 5.3 per cent, says La- zar. "So what they've done is actually increase the profit- ability benchmark but they've obfuscated this by intro- ducing this new rule." For its part, FSCO believes the six-per-cent return- on-premium benchmark is "in line with current fi- nancial market realities based on the recommenda- tion provided to FSCO by the consultants," said FSCO spokesman Malon Edwards. "The OTLA study . . . is inconsistent with the recommendations in the 2013 report provided to FSCO. In the 2013 report, the con- sultants [Lazar and Prisman] recommended [a return on equity] of 11.24 per cent, based on a 10-year rolling average process and the rolling average process be used for subsequent years. This would result in [a return on equity] of 10 per cent for 2014, not 5.7 per cent that is now suggested in this report prepared for OTLA." Consumer advocacy groups, meanwhile, are call- ing for "a fresh start" with new insurance legislation. "What we need is a fresh start, a new Insurance Act for a start and an end to the empire-building and turf-protection stance we now have in this highly polarized situation," says Rhona DesRoches, board chairwoman of the FAIR Association of Victims for Accident Insurance Reform. "It's a shame that while these well-heeled lobby groups are so busy slinging mud at each other . . . no one seems to notice that tens of thousands of injured auto accident victims are be- ing forced to sit in that mud for many years while they wait for the right thing to be done," she adds. LT Continued from page 1

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