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lAw Times • April 26, 2010 Politics, partisanship, and purchase uebec is roiling these days over a major scandal that has shocked the province and its legal community with allegations by a former justice minister that provincial court judicial appointments are for sale. It goes to the heart of the judicial system: who chooses provincial court judges? It began last month when, out of the blue, Marc Bellemare, who served for a year and a half as justice minister in Premier Jean Charest's Liberal gov- ernment, came out with some hard accusations. Bellemare said that while he was a minister in 2003 and 2004, he ap- pointed provincial court judges, with Charest's approval, to please Liberal party fundraisers. Bellemare has refused to name the judges, but it hasn't taken long for people with political insight and legal connections to start putting names together. Whatever could the poor man Q have been thinking of, people have been asking, especially since he has implicated himself in the alleged cor- ruption. Bellemare said that in party back- rooms, he had seen with his own eyes political donors handing wads of cash to party bagmen over and above the maximum $3,000 allowable by law. Again, he offered no names. In Quebec, as in the rest of the country, there are always people who believe that judges are corrupt, espe- cially when they get a ruling that goes against them. Others said that sitting on evidence of political corruption for six years, and worse still, taking part in it, made Bellemare as bad as those who paid to have judges appointed. Charest has denied everything. He says he knew nothing about fundrais- ers picking judges. He himself never chooses them, he added, noting it's a task he leaves to his justice minister. It sounded credible. Still, the public demanded a thorough investigation. So Charest announced he had found a man above reproach — a ju- rist of the highest integrity and some- one who knows the Canadian legal system intimately. That would be Michel Bastarache, a former justice of the Supreme Court of Canada who is fully bilingual and knowledgeable of judicial appoint- ments. As an added bonus, Bastarache is from New Brunswick. He has never been a judge in Quebec. So Charest appointed Bastarache but then tied his hands by limiting the scope of his inquiry. It will be an inves- tigation of how judges are appointed, or how they should be, without any probe of Bellemare's allegations. Charest didn't want another Gomery inquiry with the Liberal par- ty's clothes being washed in public and the premier himself hung out to dry. The Bastarache inquiry should have settled the issue. But then out of nowhere last week, his neophyte jus- tice minister, Kathleen Weil, decides to go on the radio. On air, she casually mentions that she picks the judges in Quebec but then adds that "of course" she shows Charest a list of possible candidates beforehand. Oops! That's just the opposite of what Charest said. And Weil suddenly The Hill By Richard Cleroux has to disappear from public view for the next three days while missing out on the party's big provincial council meeting. Charest is back in hot wa- ter. Does he or does he not pick the judges from her list? To date, two judges have had their names smeared in public, one because his dad has been a prominent party bagman and another who happens to have been on the executive of the local Liberal association in Gatineau, Que., before his appointment. All of that brings us to the crux of what Bastarache will be investigating: the difference between politics, par- tisanship, and purchase, the three p's behind controversial judicial appoint- ments. The first aspect is politics, referring to somebody previously identified with the party or who is a former can- didate or sitting member. The second aspect is partisanship, dealing with someone who makes a major political donation to the gov- erning party and ends up a judge. The third aspect, purchase, is the most dangerous. It refers to situations where a party bagman raises money and then suggests who should be ap- pointed to the bench. In those cases, it's often later that the appointed per- son finds out the name of the bene- factor, sometimes with newly discov- ered strings attached or unexpected surprises. In Quebec, there have been many surprises since the allegations sur- faced. On Wednesday afternoon in the national assembly, Parti Québé- cois justice critic Véronique Hivon asked about the appointments of three judges she named. In response, Charest jumped all over her, calling the move "a flagrant abuse of your parliamentary privilege." "You will have to live with that for the rest of your life," he told her. Bastarache has six months to come up with a report on appointments. It won't be easy. Every province does it differ- ently. Some use legal committees. Oth- ers consult their judges, their provincial bar associations or even citizen groups. In some places, the premier or the jus- tice minister picks judges. Elsewhere, the premier has the final word over a single proposed name, while in other provinces, premiers choose from a short list. In France, there is a school for magistrates. Britain has a perma- nent committee to pick judges. In the United States, some judges are elected and they have to do their own electoral fundraising. Right now, Bastarache has the confi- dence of an entire province and its legal community. But it remains to be seen if his inquiry morphs into something bigger: an investigation into who was bought or who was sold on Quebec's provincial court benches. LT Richard Cleroux is a freelance reporter and columnist on Parliament Hill. His e-mail address is richardcleroux@ rogers.com. COMMENT PAGE 7 Are you ready for Canada's new insider reporting regime? BY MICHAEL DOLPHIN For Law Times C hanges to Canada's insider re- porting regime will come into force in all Canadian jurisdic- tions this Friday. Ontario must still ap- prove amendments to the Securities Act but is expected to do so by this date. The new insider reporting regime under national instrument 55-104 will harmo- nize requirements across the country while reducing the number of insiders who must file. It will also im- prove the timeliness of these filings. The purpose of these changes is to make it easier for issuers and insiders to understand their obligations and to promote timely and effective compli- ance. The new regime includes shorten- ing the insider reporting deadline to five from 10 calendar days. These new rules should also have the effect of clarifying some aspects of the current scheme, such as whether the rules apply to certain types of derivative-based transactions, and simplifying reporting on stock-based compensation arrangements. The proce- dural filing requirements for insider re- ports haven't changed and are still found in national instrument 55-102 dealing with the system for electronic disclosure by insiders (also known as SEDI). Here is a quick overview of the key changes the new rules will entail: • Fewer insider filings by introducing a new "reporting insider" concept that should reduce the number of people required to submit a report. For exam- ple, under the current rules, all officers are required to file insider reports if they have access to undisclosed mate- rial information in the ordinary course of business. Under the new rules, they must also have the ability to exercise "significant power or influence" over the issuer to be a reporting insider. • New deadlines. While the new rules maintain the current 10-day deadline for filing an insider's initial report, the time frame decreases to five calendar days for disclosing all changes in di- rect or beneficial ownership of secu- rities. This change will take place on Oct. 31 and will apply to all transac- tions that occur after that date. Editorial Correspondence EDUCATION THE SOLUTION TO IRRATIONAL ALIENATION Considering that 20 per cent of the cases take up 80 per cent of the time, we should not reason the situation as offering no ef- fective solution. One solution is education. Irrational alienation should be included in parent- ing education classes. Obviously, it will not benefit all of the cases but it will benefit some. Not all parenting classes cover the topic of alienation. They should. We also need more mental health profes- sionals trained in understanding alienation that is irrational. If a child is experiencing violent or abusive behaviour, the child would obviously reject the parent. Clearly, misdiagnosis is worthy of careful www.lawtimesnews.com • New definition of major subsidiary. The new rules increase the threshold for de- fining a major subsidiary to 30 per cent from 20 per cent of a reporting issuer's consolidated assets or revenues. Speaker's Corner • Simplified reporting for some stock- based compensation arrangements. The changes introduce a separate exemption for certain grants of se- curities to directors and officers of a reporting issuer as part of a compen- sation arrangement. This exemption is only available if the reporting is- suer has previously disclosed infor- mation about the compensation ar- rangement in an information circular or other System for Electronic Document Analysis and Retrieval (SEDAR) filing and the reporting issuer has filed an "issuer grant report" on SEDI. In addition, the insider must file a report within five days of the disposition or trans- fer of any acquired security or on or before March 31 of the next calendar year for any acquired securities that have not been disposed of. Are you prepared for theses changes? We suggest reporting issuers take the fol- lowing steps before the new rules come into force: • Review your current list of insiders and determine if reporting changes are needed under the new rules. • Advise insiders about the new rules, including the requirement to report all outstanding unreported security- based compensation by this Friday and the accelerated filing deadlines that take effect on Oct. 31. • Decide whether you will file issuer grant reports for securities granted un- der compensation arrangements, such as option grants. • Revise your insider-trading policy to reflect changes to insider reporting obligations. The new regime involves significant chang- es for reporting issuers. As a result, it's im- portant they be aware of them and what they mean for their business. LT Michael Dolphin is an associate at Weir- Foulds LLP who practises corporate and securities law. He can be reached at mdolphin@weirfoulds.com. scrutiny. Once again, education is needed. It should be possible to determine the reason why the parent was rejected. As an example, a teen who resides in the home without rules and a curfew might be fairly satisfied where they are. The reasons they give for not wanting a rela- tionship with the other parent are frivolous; in other cases, the reasons are fabricated. Workshops to reconnect parents who were rejected without a good reason are credible. This option seems superior to the current ad- vice to the rejected parent to give up. Let's not forget about the couple that di- vorced years ago, but one parent managed to alienate the child. As a consequence, the rejected parent decides to try to restore a relationship. For this parent, it is more cost-effective to seek workshops to restore the relationship than to pay an array of ex- perts. Comment posted on lawtimesnews.com by Monika about "Does the Warshak workshop work?"