Law Times

lAw Times • April 30, 2012 NEWS Releases granted in Nortel, Canwest matters Continued from page 1 Supreme Court of Canada. To the general surprise of almost everyone, the court refused to grant leave. In accordance with its usual practice, the top court gave no reasons for the refusal. Campbell, who heard the motion for approval of the Hollinger settlement in mid-April, will now have to make his decision on the issue in the face of objections from Conrad Black, his wife Barbara Amiel-Black, and John Boultbee, Peter Atkinson, and David Radler, all former officers and inside directors of the company. As was the case with the ABCP settlement, the Hollinger deals include third-party releases and bar orders in favour of the settling parties. The third-party releases prevent the non-settling defendants from claiming contribution and indemnity against the settling parties. Hollinger, Torys, KPMG, and the outside directors several liability against the non-settling defendants. As a result, Hollinger would limit the company' non-settling defendant's proportionate share of liability. Finally, they assert that Campbell's jurisdiction to grant the third-party releases stems from the fact that he's over- seeing Hollinger's CCAA restructuring and must approve s recovery to each counsel and colleague Earl Cherniak represents Black, notes there' and Hollinger matters. " says. "Hollinger is private litigation albeit in the context of a restructuring. maintain that the settlements "will sever the daisy-chain of overlapping claims-over between the various parties to Hollinger-initiated proceedings" in a way that will sim- plify the complex litigation. They also maintain that granting the third-party release and bar orders will be economically neutral inasmuch as Hollinger has agreed to waive its right to pursue joint and "The terms of the settlement that achieve so-called economic neutrality do not address this issue." Fasken Martineau DuMoulin LLP's Aubrey Kauffman, an insolvency and restructuring lawyer who's not involved the disposition of sizable assets. But Jason Squire of Lerners LLP, who with senior saving a certain portion of Canada's capital markets," he " s a fundamental difference between the ABCP ABCP engaged the public interest because it involved mentally change the dynamics of the litigation and discovery process involving the non-settling defendants. "Black has been sued in his own right and needs to make According to Squire, the third-party releases will funda- full answer and defence, much of which is in the hearts and minds of KPMG and Torys, who in turn need to be substan- tively involved in the litigation process so that an appropriate apportionment of liability can be made at trial, " says Squire. in the Hollinger matter, says third-party releases weren't controversial until after the ABCP settlement. "In the insolvency world, some level of third-party where the releases went so far as to cover solvent third parties." Since ABCP, third-party releases have been granted in release is almost always standard fare these days," he says. "It started some years ago with the practice of including directors and officers and then insurers in the releases. And that made sense to almost everyone. "But many people think things got out of control in ABCP the Nortel Networks and Canwest restructuring proceed- ings. More recently, in Re Kitchener Frame Ltd., Justice Geoff Morawetz of the Ontario Superior Court ruled that the Bankruptcy and Insolvency Act permitted the same third- party releases that were possible under the CCAA. "What' trend that is getting bigger and bigger," says Kauffman. LT s happened is that ABCP started a creeping "Whether that will hold up at the Court of Appeal level remains to be seen." Legal community shocked at Crown tactics at fraud trial Continued from page 1 Dodek, a law professor at the University of Ottawa. "It is of- ten avoided because it brings a lot of mischief to the practice. If Marrocco issues a second " ruling on litigation privilege in the Crown' tions could be significant, adds Dodek. "If a client knows their lawyer could be called as a wit- ness, it could prevent them from attending meetings with their lawyer or make them feel going to court unrepresented is a bet- ter option. As a lawyer, it could also cause communication to be censored if a lawyer knows they may be compelled to reveal their discussions or notes. It could set a very dangerous precedent." The initial ruling requiring Dunn's lawyers to testify is of s favour, the implica- will be able to anticipate what the Crown is going to ask them, they'll know how to respond, and they'll be looking to formu- late their answers very carefully. But others in the legal com- munity say the Crown's move " and the subsequent ruling re- quiring Dunn' tify may not be that worrisome. "From my understanding, it is a very rare tactic on the part of the Crown," says lawyer and Univer- sity of Toronto business profes- sor Richard Powers. "That being said, it does s lawyers to tes- litigation privilege aspect of the case could spell trouble for both lawyers and clients. "It could cause them to be- come very careful in the future," with the counsel in question's in- terests and whether or not there was enough of an exception to exclude that privilege, he says. "It could also raise is- sues of what lawyers will now do with their notes if they know they could potentially be used to their detriment. It could cer- tainly become another hurdle, as if lawyers' jobs aren't already difficult enough." Bruce Karten, a criminal law- concern to criminal lawyers, ac- cording to Prutschi. "It sends a legal shiver up my spine to hear that lawyers could be forced to testify about third-party meet- ings they were involved in on be- half of their clients in contempla- tion of litigation," he says. "A ruling in favour of the Crown here could have broad implications, making it far more difficult for lawyers to robustly represent their clients with the spectre of being called as a witness at a later proceed- ing hanging over their shoul- ders," he adds. Prutschi suggests a second ruling in favour of the Crown would have a similar effect. "Lawyers' notes could have potentially confidential infor- mation on them as they oſten don't take a step-by-step review of what's happening. In most cases, they offer detailed analy- sis and legal advice. If this kind of note-taking is included, I imagine lawyers would become much more careful about what they write and will be look- ing over their shoulders more frequently. lawyer with extensive litigation experience to testify may end up backfiring on the Crown. "They Still, Prutschi says calling a " show the ability of the Crown to split the conversations and records in question into work- able pieces that they could then use to their advantage. I think it shows the length the Crown is willing to go to to dissect the case so specifically. Still, Powers agrees that a rul- ing in the Crown's favour on the " yer in Toronto, says that although the Crown' shocker," the presence of a third s move is "quite a party technically waives solic- itor-client privilege and makes the litigation privilege issue the more hotly contested matter. "Solicitor-client privilege is only high-profile case where Crown lawyers have challenged traditional notions of solicitor- client privilege recently. A com- mission charged with probing the suicide of Cpl. Stuart Lan- gridge, who hanged himself at the Canadian Forces Base in Edmonton in March 2008, has stalled over crucial Defence Department documents. Justice Department lawyer Elizabeth Richards, who's lead But the Nortel trial isn't the " he says. for the family and the commis- sion. As of last week, counsel had yet to reach an agreement on the documents. The differences between the cases are quite stark, according to Dodek. "In one case, it does appear waived by definition when a third party is present, although there is the issue of whether or not that third party was aligned counsel for the Department of National Defence in the case, has argued some of the documents are subject to solicitor-client privilege. Richards has also ar- gued the government has insti- tutional privilege over the docu- ments, much to the ire of lawyers ANNOUNCEMENT Brian Shiller &Gerald Chan are pleased to announce that Clayton Ruby, NADER R.HASAN has joined their partnership. Nader has worked as an associate at our firm since September 2010, practising criminal, constitutional, and administrative law. During that time, he has argued before every level of court in Ontario and at the Supreme Court of Canada. He is also an adjunct professor at the University of Toronto Faculty of Law. RUBY SHILLER CHAN HASAN BARRISTERS RubyShiller_LT_Apr30_12.indd 1 www.lawtimesnews.com Nader graduated from the University of Toronto Faculty of Law in 2006 and clerked for the Honourable Justice Marshall Rothstein at the Supreme Court of Canada in 2006-2007. For more information, go to www.rubyshiller.com 12-04-24 11:24 AM government is being very zeal- ous in protecting its own privi- lege that it would be just as sym- pathetic to the privileges of indi- viduals." In the meantime, lawyers will be watching Marrocco's ruling "One would hope that if the " he says. this week. "It will go to the core of what solicitor-client privilege is in- tended to protect against," says Prutschi. "It' tory now." s all uncharted terri- LT that the government is being quite zealous in protecting its own privilege and attacking it in the other, PAGE 5

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