Law Times

Law times • OctOber 3, 2011 Cops, protesters sing Kumbaya Nobody can ever remember such a peaceful and friendly protest. There were more than 400 oil- I sands protesters and opponents of the Keystone XL pipeline here last week. But everything was friendly. Everything went well. Nobody was hurt. Police arrested the protesters. That's what they wanted. They were willing to be arrested and made it easy for police, who in turn treated them with respect. What a video scene to send around the world. "So that's how Canadians do it," people might say. Those people would have never seen the G20 protests in Toronto, of course. The organizers had met police beforehand and worked it all out. They told them they'd climb over the metal barricades and expected to be arrested but wouldn't rush Parliament, attack police, do any harm or even try to avoid arrest. What more could the cops want? First Nations leaders would be making touching speeches. After all, it's their land that the oilsands are spoiling. They'd have to chant. But what's a protest without chanting? The police complied with the agreement in every way. They seemed to actually enjoy the outing. Maybe the cops have had enough of G20-type confrontations. Their image took a public relations beat- ing as a result of the summit. The videos were hard to explain to their spouses and kids. Who knows? Maybe the or- ders not to get nasty with dem- onstrators came from inside the Parliament buildings. Maybe the people who run the place have had enough with violence. Whatever the reason, the cops were in no mood to play Dirty Harry. Everybody stayed cool. The demonstrators were a peace- ful lot of people including native chiefs nicely dressed in their cer- emonial best, environmentalists, Maude Barlow, and youth. There were even some guys in coats and ties, but they might have been spies from the prime minister's office. This was certainly not the Stanley Cup in Vancouver. Lawn bowling tournaments in Rockcliffe Park have been rowdier. When it came time to chant about the oilsands, somebody inside the Parliament buildings turned on the Peace Tower bells that began playing O Canada. It couldn't get any more Canadian. Onlookers were laughing. Jumping the barricades was easy for the younger crowd. The police just stood by and watched and waited for them. In fact, they had to wait for the cops. So they sat down on the ground, waiting to be arrested. Police handcuffed the pro- testers politely with plastic ties, gave them tickets for trespassing, and drove them away. As a few older folk struggled to get over the barricades, a couple of t was the nicest protest ever on Parliament Hill. Even the cops were smiling. The Hill By Richard Cleroux cops moved in and for a moment it looked as if they might offer to help them. But how could they? How could they help and then make a trespass charge stick? So why stage a demonstra- tion if it doesn't confront anyone? Well, two weeks ago when the anti-oilsands lobby staged a big demonstration in Washington, authorities arrested hundreds of people, including Margot Kidder and Daryl Hannah. How would it look having the Americans going to bat against the oilsands while Canadians sit back and watch it all on TV? The Parliament Hill demon- stration, then, showed the Ameri- cans and the world that Canadi- ans do care about climate change and what the oilsands are doing. And we did it without anybody getting their head smashed in. At the same time, the cops didn't look like goons and hoodlums. A few hours after the protest, the RCMP issued a news release that was possibly the nicest thing it ever wrote about a demon- stration. Read it slowly and play yourself some soft music in the background. "The protest was peaceful throughout," it said. "We are very pleased with the level of co-operation between the RCMP and the protest organizers," said Supt. Luc Lemire. There's more: "We were able to work together, which allowed the RCMP to fulfil its mandate and keep everyone safe on Parliament Hill while allowing the protesters an opportunity to express them- selves in a safe and secure manner." What a tribute. Mounties are now helping people express themselves. What's next? A mar- riage proposal? The news release ended up not- ing that "there were no road clo- sures or traffic disruptions in the downtown core." The protest didn't even disturb traffic. In total, authorities arrested 117 barricade hoppers who received $65 tickets for trespassing. Some parking tickets are higher than that in Ottawa. But here was the catch: the protesters are banned from at- tending any more demonstrations on Parliament Hill for a year. Prime Minister Stephen Harper and the oil companies will be pleased. Immigration Minister Jason Kenney had the only downer. He sent out a tweet saying how it was "sad to see about 200 ex- tremists on the Hill today who want to kill livelihood" of those working in the energy sector. But what does Kenney know about extremists? LT Richard Cleroux is a freelance re- porter and columnist on Parliament Hill. His e-mail address is richard- cleroux@rogers.com. COMMENT PAGE 7 0% discount rate shows need for rule change BY STEPHEN KERTZMAN For Law Times I n accordance with Rule 53.09 of the Rules of Civil Procedure, statutory discount rates for trials commencing in 2012 are zero per cent for the first 15 years of future losses. These are unusual times as there's no longer an effec- tive discount for the time value of money. The main reason for the change is the Bank of Canada's pursuit of a low interest rate policy to help stimulate the economy in light of the prolonged economic slowdown. The current rate is significantly lower than historical levels that have averaged at about 2.5 per cent in Canada. Accordingly, the new rate means there's an incentive for plaintiffs and their counsel in insurance litiga- tion and other matters to settle their cases or bring them to trial in 2012. Discount rates are typically a factor in dis- counting future losses or obligations when there's nominal risk associated with the pro- jections as they're based on yields on govern- ment of Canada bonds. Litigation matters in which these rates apply in order to discount future obligations or cash flows typically in- volve cases like insurance files where an in- dividual's loss of future income has been ad- justed by an expert in loss quantification for contingencies such as mortality, unemploy- ment, and illness. The rate also comes up in family law matters involving the calculation of obligations like lump-sum and compensa- tory support as well as commercial litigation cases involving present-value calculations where there's nominal risk associated with fu- ture losses or obligations. These rates under Rule 53.09 don't usually apply for the purposes of business and securi- ties valuation or discounting a loss of profits in commercial litigation as there's inherently more risk to the future profitability of a busi- ness than is associated with a government of Canada bond. To illustrate the impact of a zero-per-cent discount rate, consider a personal injury case in which the injured plaintiff has the following characteristics: • The plaintiff is a male who will be 40 years old in 2012. • The injuries have resulted in the plaintiff be- ing totally and permanently disabled from competitive employment. • An appropriate contingency adjustment to the plaintiff's projected earnings would relate to participation and unemployment rates of males residing in Ontario with a college education based on statistical infor- mation from Statistics Canada. • The plaintiff had an earning capacity of $60,000 per year absent the injuries. • The plaintiff likely would have retired at age 65. Based on those factors, the loss of income for this individual over his working life would increase by approximately $240,000 or 25.8 per cent under a discount rate of zero per cent compared to the long-term historical average CHARTER VIOLATION? The U.S. Supreme Court, in its recent Brown v. Plata decision, held that the California prison system needed to re- duce its numbers to below 137.5 per cent of capacity to respect constitutional protections against cruel and unusual punishment. Many of Canada's provincial prisons and parts of the federal system operate at more than 137.5 per cent of the intended capacity and this will worsen if bill C-10 is passed. Does this level of crowding, www.lawtimesnews.com Speaker's Corner in Canada of 2.5 per cent. Ontario changed its rules of court in 2000 for the selection of the discount rate. Previ- ously, Rule 53.09(1) required the court to use a real interest rate of 2.5 per cent when discount- ing future earnings. The new rule, established for trials begin- ning in or after 2000, divides the future loss into two periods: the first for the initial 15-year period and the second for beyond. In the first period, Rule 53.09(1) requires the court to use the rate observed on real return bonds for the 12 months ending in August of the year preceding the date of calculation less one per cent and rounded to the nearest quarter per cent. For the second period covering losses beyond 15 years into the future, the 2.5 per cent still applies. The rationale for this change appears to be that the real rates for the year before the trial commenced are a good indicator of short- to medium-term rates. Discount rates for the initial 15-year period have ranged from three per cent for trials be- ginning in 2000 to zero per cent for those start- ing in 2012. As a result, Ontario should per- haps consider revising Rule 53.09 because in certain circumstances, the average monthly real discount rates in the year preceding the trial, less one per cent, may not be a good indicator for the next 15 years. By way of example, the discount rate in 2000 for the initial 15-year period in accor- dance with the rule was, as noted, three per cent. The real discount rate from that time to now has on average been about 1.5 per cent. The adoption of this rule appears to result in a shortage of compensation for plaintiffs who brought an action to trial in 2000. For trials beginning in 2012, it appears that the adop- tion of a zero-per-cent discount rate may have the opposite effect. Nevertheless, the court does have discre- tion to vary the rate. But there's a reluctance to vary the prescribed discount rate for rea- sons such as preventing the general injustice of similar cases decided at or around the same time having different results as well as avoiding the expense of calling expert evi- dence related to discount rates. It's also interesting to note that in a submis- sion of comments on June 1 by the Canadian Institute of Actuaries, changes implemented to Rule 53.09 in 2000 were the result of a con- cern that the previous prescribed discount rate of 2.5 per cent was too low. Nevertheless, it has turned out that actual events don't appear to support some of the assumptions made in altering Rule 53.09 in 2000. In fact, the dis- count rate has been higher than 2.5 per cent only twice. Given this year's rate, then, it seems it's a good time for Ontario to reconsider its approach. LT Stephen Kertzman is a partner at ap Valuations Ltd. He has been involved in financial litigation and business-valuation matters since 1997 and has provided expert testimony at the Ontario Su- perior Court of Justice. Editorial Correspondence with the attendant health and safety risks, amount to a violation of s. 12 of the Charter, which prohib- its cruel and unusual punishment? Comment on lawtimesnews.com by Catherine Latimer about "Lawyers gearing up for assault on omnibus bill."

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