Let’s be honest about the SCC’s new ‘fair opportunity’ doctrine in contract law

On November 13, the Supreme Court in Bhasin v. Hrynew, 2014 SCC 71 (CanLII) changed the law of contract in Canada by imposing duties of good faith and honesty on all contractual relations.  Until now, the duties have been applied to agreements in situations of power imbalance, notably insurance, employment and franchises.

The plaintiff, Mr. Bhasin, was a dealer in education savings plans, a type of consumer investment, offered by the corporate defendant. At the end of the three-year contract, the corporate defendant decided to invoke a notice provision blocking the automatic renewal of the contract.  The reason for its decision not to renew was the favouring of another dealer, the other defendant and a competitor of the plaintiff.  The facts resembled that of franchise, regulated by provincial legislation, but fell short of the statutory definition of franchise.

In siding with the plaintiff’s claim for damages, Justice Cromwell stated on behalf of a unanimous court three elements to the new state of contract law:

(1) There is a general organizing principle of good faith that underlies many facets of contract law.

(2) In general, the particular implications of the broad principle for particular cases are determined by resorting to the body of doctrine that has developed which gives effect to aspects of that principle in particular types of situations and relationships.

(3) It is appropriate to recognize a new common law duty that applies to all contracts as a manifestation of the general organizing principle of good faith: a duty of honest performance, which requires the parties to be honest with each other in relation to the performance of their contractual obligations.

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Diversity Awareness and Cultural Competency as Core Skills for Canadian Lawyers

Later today, I will have the privilege of participating in a working group of the Chief Justice of Ontario’s Advisory Committee on Professionalism tasked with modernizing the basic principles of professionalism for lawyers.  High in priority is the importance of integrating equity, diversity and cultural competency into the package that lawyers must offer the public.

Historically an afterthought

The equity and diversity file has historically been an afterthought, tucked into the discussion after other ‘Wonder Bread’ aspects of professional merit are given full airing.  This has been a fault of those leading the discussion.  It is time to turn the agenda on its head.  The result is that we have promoted equity and diversity through conventional methods, with negligible effect in the bar and judiciary compared to other sectors of Canadian business and labour.  We have, till now, invoked skills of application more than cognition, policy handbooks more than classroom training, stick more than carrot.

As a point of reference, we have espoused (and imposed) virtues such as tolerance and belonging in order to foster greater participation within an established social order.  “Become one of us” actually implies a one-way benefit to the inductee in being introduced.  While we often follow up the welcome with a belief and/or statement that “diversity makes us better,” we rarely take active steps to achieve this betterment.

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Stop letting the TWU controversy make fools of the Canadian bar

It came to my notice that my last post on the British Columbia Law Society’s handling of the accreditation of Trinity Western Law School may have appeared at odds with a prior entry encouraging a negotiated solution.  In the September 26 post, “B.C. Law Society abdicates self-governance in favour of non-governance,” I stated that the decision to refer the decision to a referendum before the expiry of a statutory 12-month period was an abdication of the Law Society’s duty to govern the affairs of the legal profession.  Further, the referendum option can only be invoked by a petition from the membership, not the governing benchers.

It should also be noted that the Law Society handed the decision over to the governed members, with regard to a matter that does not affect them internally as members, but rather a matter of external public policy over prospective members.  In regard to such external policy, only the governors should be considered to have original jurisdiction and expertise, not the governed.  The benchers should have stuck to their decision to accredit, or should have reconsidered it.  If they maintained their accreditation, they would nevertheless owe the public a duty to work with the university to find accommodation for those who suffer exclusion.  If they reversed their decision and adopted the Ontario position against accreditation, they would owe a duty to the university to work toward an accommodation of religious freedom.

In the June 12 item, “End the Trinity Western Law School Deadlock without Litigation,” I urged the Law Society ought to consider the 12-month period as a time to negotiate a wording of the controversial Community Covenant that accommodates religious freedom and equality rights.

From comments and tweets readers have kindly provided, I have connected the dots and see these posts, combined, define a categorical imperative for the bar in Canada to negotiate a resolution.  B.C.’s governing body deserves criticism over its September 26 decision.  In Ontario and Nova Scotia, it is up to the university to suspend the judicial review proceedings to allow the Law Society of Upper Canada and the Nova Scotia Barristers Society to open a channel of communications.  It is really time for the Canadian legal profession to stop the “lofty and passive” approach and show the Canadian public that lawyers can do what the public expects us to do: peacefully resolve seemingly intractable differences and enable both freedom and equality in the nation’s civic affairs.  If we do not do this, or at least fail trying very hard, we do not deserve the privileged and independent position we hold in Canadian society.


Terms of use / Mentions légales

Lawyers’ Technological Literacy, or Lawyers’ Literacy and Technology

In her September 30 column in Slaw.ca, Tackling Technology, Prof. Amy Salyzyn argues lawyers’ ability to use and manage information technology is now an element of professional competence. Technology is now a driver of client service, effective lawyering and access to justice.  The flip side of this argument is that screen-based technology is an inhibitor of contextual literacy.  Contextual literacy is a core legal skill, without which our services are worthless to clients.  Technological literacy will probably look after itself, with the passing of generations.  Loss of contextual literacy, however, will be a more serious problem from the perspective of legal education and training.

I have recently encountered this phenomenon when hearing a young lawyer maintain that a contractual limitation period for an acknowledged obligation starts from the date of subsequent repudiation and not from the date of acknowledgement. This lawyer’s assumption, based on the spatial pattern of the way limitations work in breach of contract cases, had to be dispelled by mapping out the operation of s. 13 of the Ontario Limitations Act, 2002 and reading each word as defined in the statutory architecture.  Once you see it, it follows the former common law on the subject, and there’s no other way to see it.  Until then, it seems a wordy mess and the mind’s eye is tempted to read it the way other limitation periods are structured.  In the intervening period between acknowledgment and repudiation, the limitation period changed.  The significance to the lawyer, who thought he had started the action a day before it prescribed, was that he may actually have missed the limitation period by several weeks.

A significant generational divide in lawyers’ literacy is the widespread variation of spatial cognition skills among Baby-Boom and Gen X lawyers compared to Millennials.  The older lawyers tend to be better grammarians and the younger ones are better at reading charts.  This is a human factors issue for our profession similar to the way in which the use of a big red stop button is important to operators of heavy equipment.  We need to be better cognizant of the way technology amplifies both our strengths and weaknesses.  Instead of hiding our weaknesses or making light of them, we have to learn how to teach ways of overcoming them.  So it is more than requiring lawyers to learn to use PC Law, Excel, or collaborative web solutions.  We must develop strategies for overcoming the loss of ‘artisanal’ skills resulting from technological innovations.

We complain that people can’t read or write any more, but teaching grammar like they did in the one-room school house is no longer useful or efficacious.  In law, the search for clarity and precision requires us to develop ways of teaching new lawyers that words have meaning depending on the linear order in which words appear.  An example I have used is to ask a young person learning French the difference between the phrases, “neuf nouveaux bateaux” and “nouveau neuf bateaux.”  Until one introduces a spatial explanation, it is not easy to see the difference between “nine new boats” and “new nine boats,” except that the latter appears simply to be an awkward way of expressing the former.  In fact, the latter implies a pre-existing context in which boats are already organized in groups of nine (eg. a marina in which each pier docks nine boats), whereas nine new boats implies only an undefined number of previous boats (eg., nine new boats entering the marina).  We see blindness to this type of issue more and more.  Unless we teach how to overcome it, lawyers are going to be making mistakes all the time and not understanding the mistakes they made.

Terms of use / Mentions légales

B.C. Law Society abdicates self-governance in favour of non-governance

This afternoon, the Law Society of British Columbia voted 20-10 to hold a referendum on the issue of accreditation of the Trinity Western University.  This came after a vote of 9-21 against deciding to overturn its previous decision in April to grant accreditation.* That first motion arose from a non-binding resolution of a special general meeting of the entire B.C. Bar, held in June.  A third motion, to defer any decision, was obviated by the decision to hold a referendum.

In deciding to hold a referendum, the B.C. benchers have abdicated their responsibility as the directors of a self-governing profession.  Either they should have stood by their original decision to grant accreditation, or they should have reversed their decision based on the interventions made at the June special meeting.  Instead, they have decided to distribute the decision-making authority to the general membership.

While this may seem ‘democratic’ in a populist sense, atomizing a decision-making power to the membership is not democratic because the public has entrusted the legal profession to govern itself. The Law Society derives its authority to govern in this instance not from the electors but from the people of B.C.  The election of benchers is not only an act of selection but of submission to the public interest in exchange for the monopoly over legal services.  Since the public has no voice in the process apart from legislative amendment of the statute and the appointment of a handful of lay benchers, a voluntary referendum not mandated by the statute exceeds the Law Society’s jurisdiction requiring it to be governed by benchers.  In this regard, the B.C. Law Society’s decision was not only unlawful.  It also showed a lack of understanding of the purpose of law societies.

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Why can’t a lawyer be more like a share capital corporation? A reflection on the CBA Legal Futures Final Report

Henry Higgins, in My Fair Lady, famously sang, “Why can’t a woman be more like a man?”  For Higgins, an elocution teacher who traded in British class prejudice by offering to improve clients’ social standing through posh talk, the education of a woman was essentially a troublesome Alternative Business Structure (ABS) – he could work with the moving parts but the brain remained a mystery.

The Final Report of the Canadian Bar Association’s Legal Futures Initiative, released today, appears to be a multifaceted atlas mapping out a strategy for renewal of Canada’s law industry.  There are many good thoughts in it, including a premise that “The future for lawyers is as much about ethics and values as it is about economics and value.”  That equation is somewhat betrayed by the simple textual metric that the word “value” in the sense of economic value is used more than twice as often than in the sense of ethical values.  Review of the report from beginning to end bears out this imbalance.  In reality, there is no shortage of Darwinian zeal when it comes to the core message: Change or Die.

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End the Trinity Western Law School Deadlock without Litigation

On June 10, rank and file members of the Law Society of British Columbia voted to require their elected Benchers to reverse course on Trinity Western University’s bid for a new faith-based law school.  According to s. 13 of the B.C. Legal Profession Act, the vote is not binding on Benchers, at least for a grace period of 12 months.  If the Benchers do not implement the resolution within 12 months, they face the prospect of a referendum to be conducted in accordance with poll rules identical to that of a Bencher election, under art. 1-37 of the Law Society Rules (p. 27).  Such a referendum requires a supermajority (66%) of a sizeable quorum (33%) of B.C. lawyers.  The vote, 3,210 in favour and 968 opposed, was uncannily similar to the 4,000-member quorum.

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