Law Times

Page 12 March 5, 2018 • Law TiMes www.lawtimesnews.com says. Molino says that she was sure that the appellate court decision from the Ontario Court of Ap- peal would stand, though not necessarily for the same reason- ing, and hoped that the SCC would take the opportunity to refine previous decisions. The majority on the Supreme Court of Canada overturned the OCA decision instead. "I was surprised that it was a 5-4 split [by the SCC], and the decision of the dissent really res- onated with me," says Molino. "I understand the struggle that the court went through." The decision may also have implications for lawyers who advise corporate clients and fi- nancial institutions with white- collar crime issues, says Patrick McCann, counsel with Fasken Martineau DuMoulin LLP in Ottawa. "Although the majority judg- ment maintains the previous ju- risprudence, which favours the corporate victims of employee fraud, the strong dissent favour- ing financial institutions could become a majority judgment if the issue comes before the court some time in the future," says McCann. The fact that the courts con- tinued to put the onus on the banks could mean more expen- sive cheque processing overall as a trend, says Molino. "I'm not sure that you'll see any sharp increases, but the overall trend will be an increase in cost or less efficiency in the system overall at a time where cheques are already an expen- sive item to process," says Mo- lino, adding that detecting fraud is not costless to the banks. "There's the other side in terms of managing the fraud and who's in the best position to do that, and from a practical perspective . . . I'm not sure how the bank is in a better position to mitigate fraud as opposed to the company that makes out the cheque," says Molino. Linthwaite says the best ad- vice to clients is to make sure that their internal controls are rigorous so as not to put them- selves in this position where they have to rely on this law. "[My clients] got defrauded for $7 million and change," Linthwaite says. "They had to fight for 11 years to be made whole." The counsel for TD Bank in the case did not provide com- ment; nor did counsel for Sco- tiabank, by deadline. LT She says that when she deals with clients both inside and outside of Canada, the 13 ju- risdictions within the country do mean that those clients limit their activities to a smaller num- ber of provinces — usually those with the bigger population. "Fundamentally, we need a common securities regulator, but the Supreme Court of Cana- da has said that we can't really do that," says Hendrickson. She says the differences have created regional markets with different initiatives and investor bases. The CCMR proposal is that the existing securities offices in the provinces would remain in place and not simply be run out of Ontario. "There's a lot of uncertainty in the proposed CCMR because not all of the provinces are in it anyway," she says. "That's the uncertainty." However, Boyle says there's no indication that anything is wrong with securities regulation in Canada and that the current "passport" system that allows businesses to operate across pro- vincial lines works when all of the regulators co-operate. "The passport system is a reg- ulatory market response," says Boyle. "[The] passport system is based on trust and confidence, which we expect from all our se- curities regulators." Kenneth Dekker, partner with Aff leck Greene McMurtry LLP in Toronto, says that the current patchwork system ben- efits litigators like him. He also sees the advantages of what a single regulator would provide. "A level of confusion in the regulations that apply across the country is a bit of a make-work project for litigators like me," says Dekker. "The real interest has to be in lawyers who are servicing public companies and doing public of- ferings and trying to meet their disclosure obligations." Dekker says that a common regulator would benefit lawyers in Toronto, where the hub of the CCMR would be located. "It will make things easier for me and cheaper for my clients because then we have to figure out just one set of regulations in- stead of several potentially," says Dekker. He says he's concerned about the "reputational damage" of Canada in having 13 separate jurisdictions across the country dealing with securities regula- tion. "It's perplexing to anyone outside of Canada that a prov- ince the size of Prince Edward Island, with the same popula- tion as Sault Ste. Marie, has its own securities regulator and regulations," he says. LT Continued from page 10 Skepticism over creation of single regulatory body Banks required to pay company Continued from page 11 Barbara Hendrickson says the idea of a sin- gle securities regulator originally appealed to people because they hoped it could create a uniformity of legislation and lower costs. FOCUS LEGAL PROFESSIONAL DEVELOPMENT LEARN | NETWORK | OBTAIN CREDITS In Class & Live Online Access 10 TH ANNUAL ADVERTISING AND MARKETING LAW CONFERENCE April 17 th | Toronto & Webinar 3 RD ANNUAL DUTIES AND RISK FOR DIRECTORS May 1 st | Toronto & Webinar BRENDA PRITCHARD, GOWLING WLG COURSE LEADER: COURSE LEADERS: CORNELL WRIGHT, TORYS LLP STEPHANIE STIMPSON, TORYS LLP • Changes | Trending now: Keeping you in the know • Québec - The Last Frontier • Privacy compliance: New technologies, changing law, and increased exposure • Transformation of Trademark Law in Canada and Beyond • Entertainment issues: CGC – Third party rights in disguise • Food, drugs and NHPS: The blurring lines • Influencer led disaster: More than meets the eye • The Necessity of Strategic Planning: In the Normal and Hostile Times • Subsidiary Governance and Managing Risks Abroad • Leveraging Technology to Protect What Matters • Cyber Risk • The Role of D&O Insurance EARLY BIRD ENDS MARCH 16 TH EARLY BIRD ENDS APRIL 2 ND For questions and group rates, please contact: Toll-Free: 1-877-298-5868 Direct: 416-609-5868 Fax: 416-609-5841 Email: lexpert.questions@thomsonreuters.com *Discount applies to in-class only REGISTER NOW & SAVE OVER $300* www.lexpert.ca/legal-programs Untitled-2 1 2018-02-27 8:15 AM

• Cover