120 THECANADIAN BAR REVIEW [Vol.74

Case Comments Commentaires d'arrêt

Mobility of Lawyers : Necessary Qualifications: Professional Organisations: LawSocietyofAlberta v. Black: Richards c.Barreau du Québec: O'Neill v. Law Society ofNew Brunswick.

Alexander J. Black*

Introduction

Law societiesare self-regulating bodies that are supposed to promote the public interest. But law societies are also bureaucracies created by lawyers to act as lobbyists for the membership. This interest-group behaviour has created rules preventing Canadian lawyers with less than three years active practice' from freely moving from one province in order to earn a livelihood in another. Likewise, this restricts the ability of lawyers qualified in Alberta to transfer to

another province when their first law degree was gained outside Canada.' In1995 CanLIIDocs 174 1992, the `magical' three year rule was successfully challenged in Québec because it offended the mobility rights guaranteed under the Canadian Constitution. Roughly halfofCanadahas flexible transferrules while the other halfdoes not. Twodifferent standards are in force in Canada concerning foreign lawdegrees andthis bifurcation has unfairly frustrated interprovincial mobility. This comment focusses on mobility of lawyers in Canada and so it only briefly notes comparative practice in Europe and the United States. Interjurisdictional mobility of lawyers involves the debate about legal education aspart ofthemodernprocess ofadjustment ofdisparate middle-class elements to the forces of industrialization and urbanization . There is a well documented "struggle between a powerful and entrenched professional body" with university-basedlegal education,' and interjurisdictional mobility may be regarded as one aspect of this conflict. * Alexander J. Black, ofthe School of Law, University of Glasgow, Scotland, U.K. ' The term "active practice" is not clear. For instance, an active member of the Law Society of Alberta, can undertakenot to handle trust monies and live and/or work outside Alberta. Furthermore, the Law Society of Alberta's Convocation approved a measure in 1994which, once theLegalProfessionActisamended, will exemptcorporate counselfrom the transfer examination . Provided they are qualified to practice in another Canadian jurisdiction, they will be able to practice in Alberta as "corporate counsel" under Law Society ofAlberta's limited membership, without paying professional liability insurance. z Canadian law societies appear biased in favour of a "first" law degree, such as an LL.B orJ.D. as opposedto a graduatelaw degree such as the LL.M orJ.S.D. to which they attach little weight. 3 See generally, C.I. Kyer & J.E. Bickenbach, The FiercestDebate: Cecil A. Wright, the Benchers, andLegalEducation in Ontario1923-1957(Toronto: The Osgoode Society, 1987) at viii. 19951 Case Comments 121

The issue also concerns provincial regulation of property and civil rights and federalregulation ofinterprovincial trade and commerce. These economic concerns are discussed in relation to the U.S.-Canada Free Trade Agreement andtheNorthAmerican Free TradeAgreement (NAFTA),internationaltreaties whichare influencingchange withinCanada. Nevertheless, significantbarriers to interprovincial trade exist including non-tariff barriers to the mobility of professionals and skilled labour despiterecent attempts to conclude a so-called interprovincial free trade agreement. If creating the "right relationship between knowledge and power is the central problem of modern democracy,"' the practice in Ontario, where lawyering is a profession-business regulated by the Law Society of Upper Canada having sophisticated restrictive-entry practices, can be criticized . Ontario is the economic engine of Canada and has over half of Canada's lawyers, stringent bar admission requirements and the toughestrules in Canada for interjurisdictional mobility of Canadian lawyers. Many lawyers cannot find workor are under-employed whilemany areless than happy about sharing smaller portions ofthe economic pie. This is known as the"numbers problem"theexponentialincreaseoflawyers which accompanied creation of new Canadian-university based law schools a generation ago. 1995 CanLIIDocs 174 Universities with law schools are against closure or reducing the spaces for the first degree in law, the LL.B.. Instead of letting market forces determine demand, the Law Society ofUpper Canada discriminates between those with a first law degree from Canada and elsewhere. While unfair discrimination is odious, discrimination based upon education remainsthemostelastic wayto restrictentry. Many lawyers cannot see fartherthan theethosoftheirownjurisdiction,itsattendantlegalsub-culture anddiscrimination against foreign-trained lawyers tends to be formalistic. Generally speaking, legal formalism is a philosophy maintaining that law exists independently from the world of fact. Instead of a comparative, rational and functional analysis, some Provinciallawsocietiesuselegalformalismtoperpetuatemyths6 thatlegalsystems in otherjurisdictions are inherently different'

aA.M. Carr-Saunders and P.A. Wilson, The Professions, 1933;Terence C. Halliday, BeyondMonopoly, Lawyers, State Crises, and Professional Empowerment (Chicago: U. ofChicago Press, 1987). s In science, ontogeny recapitulates phylogeny, i.e., the life of any individual is moulded by the genetic parameter ofthat species. 6 "The distinguishing markofa myth is that truth and error, fact andfable, report and fantasy, are all on the sameplane ofcredibility, The mythis, then, not necessarily false. It may happen to be wholly true. Ifithas affectedhuman conduct for a long time, it is almost certain to contain much that is profoundly and importantly true. What a myth never contains isthecriticalpowerto separateits truths fromitserrors". WalterLippmann, Public Opinion quoted in J. Simpson, Faultlines: Struggling For A Canadian Vision (Toronto: Harper Collins, 1993) at 214. 'These myths are perpetuated by ignorance of other legal systems. See: A. J. Black, "Separated by a Common Law: American &ScottishLegalEducation" (1993)4Ind. Int'l. & Comp. L. Rev. 15. 122 LA REVUE DU BARREAU CANADIEN [Vo1.74

Law Firm Mobility: Law Society ofAlberta v. Black

Lawyer mobility involves individual movement and national affiliations of law firms. Although the landmark linkage between the Calgary firm, Black & Company with the Toronto firm ofMcCarthy & McCarthy (now McCarthy and Tétrault) was concluded in 1981, few interprovincial linkages took place until 1989. InLawSociety ofAlberta v. Black,$ the Supreme Court ofCanada struck down restrictive practices ofthe Law Society of Alberta which refused to allow interprovincial associations by law firms. La Forest J. held that: The right topursue this livelihoodofchoice must remain a viable right andcannot be rendered practically ineffective and essentially illusory by the provincee9 .. . It is important forthe courts to look at the substance ofprovisions which,ontheirface, do not appear to affect the pursuit of the gaining of a livelihood and ensure that these provisions are not, for practical purposes, rendered impotent." Thereason for this delay was the roleplayed by "interprovincial barriers in suppressing the creation of national law firms." ".. .These barriers take the form of various provincial law society restrictions on the capacity of lawyers called in one province to practice in another." 'I ".. . While the putative benefits

of national law firms may have existed for some time, firms were unable to1995 CanLIIDocs 174 exploit these benefits because of the restrictions imposed by provincial law societies on the creation of such linkages." '3 Theprovinciallaw societies havetraditionallypreventedindividualtransfers from other provinces by requirements based upon practice experience. For instance, the Barreau du Qu6bec formerly required that lawyers had to have practised law forthree years intheir province ofprevious residence before they could sit an examination on matters ofprovincial jurisdiction .

Canadian Lawyer Mobility: Richards c. Barreau du Québec

In Richards c. Barreau du Québec," the petitioner was an Ontario lawyer who had less than three years active practice. The Barreau du Québec refused

s [1989] 1 S.C.R. 59,judgement delivered April 20, 1989. Seven months before this date, the British Columbia Supreme Court struck down provincial legislation which prohibited interprovincial law firm partnerships in which not all of the partners of the merging firms were members of the Law Society of British Columbia: Martin et al. v. Attorney general ofBritish Columbia (1988), 53 D.L.R. (4th) 198 (B.C.S.C.). 9 Ibid. '° Ibid. at 619. " R. J. Daniels, "Growing pains: The Why andHow ofLawFirm Expansion" (1993) 43 U.T.L.J. 147 at 194. See B. Filipow Jr., "Getting National Mobility inMotion" (1982) 6 Can. Lawyer 45 . '2 Daniels Ibid. at footnote 94. '3 Ibid. 14 Steven Richards, Petitionerc. Barreaudu Quebec, [1992] R.J.Q. 2847 (Sup. Ct.). 1995] Commentaires d'arrêt 123

to let him write the transfer examination.15 In 1991, the petitioner successfully suedthe Qu6bec professional organisation for a declaration that the three year practice rule was invalid and obtained a writ of mandamus compelling the .Barreau du Qu6bec to allow him to sit the less onerous transfer examinations required of candidates who had three years active practice. This effectively abolished the three-year rule. Richards successfully invoked the protection of the section 6(2) Canadian Charter ofRights and Freedoms, which states that any Canadian citizen has the right to move and take up residence and pursue a livelihood in any province. This mobility principle means that a member in good standing ofthe bar in one province should have the right to pursue alivelihood as a lawyer in another province. However, it is qualified by section 1 of the Charter which allows "reasonable limits prescribed by law as can be demonstrably justified in a free anddemocratic society." InR. v. Oakes," the Supreme CourtofCanada defined the objective soughtandthe means employed as the criteriafor limiting Charter rights, holding that the onus is ontheparty imposingthe restrictionto prove the proportionality. The means chosen must pass the "proportionality test", balancing the interests of society with those of individuals and groups. The

proportionality test requires that: (1) the means mustbe rationallyconnectedto 1995 CanLIIDocs 174 the objective and not be arbitrary, unfair or based on irrational considerations. (2) evenifrationally connected to the objective, themeans shouldimpairaslittle as possible the right or freedom in question, (3) there must be proportionality between the effects of the measures which are responsible for limiting the Charter right or freedom and the objective which has been identified as of "sufficient importance". Richards applied the reasoning in Black v. Law Society ofAlberta.'' In Richards, the objective of ensuring the professional competence of all those who practise law was found to be sufficiently important to warrant restricting a Charter right. But the means chosen by the Barreau du Qu6bec (ie the requirement ofthree years practice) failed the proportionality test on numberof counts. Therewasnorational" connection between the three-year requirement and the objective pursued by the Barreau du Qu6bec. A comparison of admission requirements in Canada showed that the three year practice requirement is not followed by all provinces. Most provinces require a six to twelve month work

15 Pursuant to An Act Respecting the Barreau du Qu6bec, R.S.Q. 1977, c.B-1, s. 50 which effectively precluded admission to the Qu6bec bar of a member of the bar from anotherprovince or territory who had not practised the profession of advocate in Canada for at least three consecutive years. 16 (198611 S.C.R. 103 at 138, 139. 17 Supra footnote 7. 11; Rationality "is simply a method of being open and curious, and- of relying on persuasion rather than force:" R. Rorty, "Is Natural Science a Natural Kind?" in E. McMullin, in Construction and Constraint. The Shaping ofScientific Rationality (Notre Dame, Ind.: University ofNotre Dame Press, 1988) 49 at71 . 124 THE CANADIAN BAR REVIEW [Vo1.74

term (period ofarticling) or the requirement to take the courses of the barinthat province. Furthermore, provincial law societies do not consider that three or more years experience gives a lawyer more theoretical knowledge of the provinciallegislation, because the periodofpractice required fortransfervaries fromprovince to province,11 Interjurisdictional mobility is therefore part ofthe murky debate concerning the balance of `theoretical knowledge' and `practical experience' in law school curricula and law society admission requirements. The Barreau du Québec gave the petitioner the onerous alternative of attending law school, passing law society exams and articling in Qu6bec. Counsel for the petitioner argued this was a false alternative. Jasmin J. of the Qu6bec Superior Court agreed: This is nota real alternative since,for candidatesfrom otherprovinces, itamounts to startingfromscratch. ...There isno doubt inthe Court's mindthatthis is an unrealistic alternative, one that is out ofproportion to the objective to be achieved and one that for allpracticalpurposes, is as drastic as, ifnotmore drastic than, the requirement that a candidate have three or more years' experience.2° (emphasis added) Jasmin J. rhetorically asked how three years of active practice ensured "better protection of the public and a better assessment of the candidate's

competence?". The threeyear period ofpractising was likened to a compulsory1995 CanLIIDocs 174 period ofarticling, being a distinction between persons trainedinQu6bec hence discordant with the Charter. The Court in Richards v. Barreau du Québec held that the three year requirementserves to ensure a degree ofreciprocity and imposes a "quota system of sorts" on the transfer of lawyers from other provinces. Jasmin J. found that reciprocityandquotascannotjustifyalimitationonaCharterright?' The Richards case was not appealed. The government and Bar ofQuébec accepted the result. In Richards, costs were awarded and collected.Thus Richards is a first-instance Québec decision that is ofpersuasive influence elsewhere in Canada.

Implications ofthe Richards Decision

Under the Charter ofRights and Freedoms, Canadianjudges have a wider law-making role(compared to pre-CharterParliamentarysovereignty doctrine) and are able, in appropriate cases, to invalidate otherwise valid Acts of Parliament or Legislative Assemblies which offend constitutionally-enshrined rights 22 However, imposing a new constitution has proven difficult and the

'9 Richards v. Barreau du Québec, supra footnote 14 at 11. 2° Ibid. at 14. 2' Ibid. at 16-17. 22 See comparatively: Marbury v. Madison, 5 U.S. 137 (1803) at 177, the seminal American authority asserting federal courtpower to refuse to give effect to congressional legislation inconsistentwith the Court's interpretation of the Constitution. Per Marshall J.: "[i]tis emphatically the province and duty ofthejudicial department to saywhat the law is". ThisdictaofMarshall J. was approvedby the SupremeCourt ofCanadain LawSociety of Upper Canada v. Sapinker, [1984] 1 S.C.R. 357 at 367-368, Estey J. for the Court. 19951 Case Comments 125

implementing of the various freedoms to accord with generally held beliefs has not been straightforward.23 While Québec has striven to preserve its distinct character, by means of stringent language laws, in a tense political atmosphere, it is remarkable that Québec leads Canada in a rational rule for interjurisdictional mobility of lawyers. TheRichards decisionmeans thatthe professional competence of any duly-qualified lawyer from another province who wishes to practice law in Québec must pass an examination on matters of provincial competence . Following the Richards decision, lawyers from another Canadian province can nowmake astraightforward applicationforcertification oftrainingequivalence from the Barreau du Québec. The candidate must then pass two-three hour examinations on the Civil Code and Code of Civil Procedure, plus a French language examination. Members of professional corporations in Québec must have an appropriate knowledge of the official provincial language.' Lawyers from other Canadian provinceshave toprovetheir abilityintheFrench language, usuallybypassing the examendefrangais.u Itmeasures understandingof written french (multiple choice questions), spoken french (interview evaluating specialized vocabulary, delivery, syntax, pronunciation) and written french (requiring a short summary in writing 1995 CanLIIDocs 174 after listening to a recorded message). Altogether it includes 5 questions basedon pictures and 35 questions based on dialogues. The pass mark is 60%, for each of the three sections and retaking the examination for section(s) failed may be made as many times as a candidate wants, respecting a 90 day waiting period.

Joint Committee on Accreditation & Lawyer Mobility

Some Canadians study outside Canada for their first law degree, by choice or because they did not gain entry to a Canadian law school. Less than half of Canada'stwelvejurisdictionsemployrestrictivepractices aimed againstmembers of a Canadian bar whose law degree is not from an accredited Canadian law school. Foreign law degrees were minimally dealt with by the "Edwards Report" on Interjurisdictional Practice, struck by the Federation of Law Societies of Canada.26 For every Canadian province and territory, other than Alberta, the credentials of these law graduates, who havenot been called to the

23 M. Richler, Oh Canada, Oh Québec: Requiemfor a Divided Country (Toronto: Penguin Books, 1992) at 11. 24 Charter ofthe French language, s.35. 25 Office de la langue française, mars 1990. 26 Inter-Jurisdictional Practice Committee of the Federation of Law Societies, The Inter-Jurisdictional Practice of Law (December 1990), the so-called Edwards Report, namedafter its Chairman,JackEdwards, Q.C.. The LSUC says thereportwill nothaveany effectupon foreign-trainedAlberta lawyers noraltertherequirements set by each province for transfer from another Canadianjurisdiction. It has been adopted by at least 10 ofthe 13 governing CanadianLawSocieties in an altruistic statementofintent: FederationofLaw Societies of Canada, Inter-Jurisdictional Practice Protocol (18 February 1994). Art-11 requires the useof "bestefforts" to implement this protocol whichis intended to facilitate 126 LA REVUE DU BARREAU CANADIEN [Vol.74

bar in another jurisdiction, have to be evaluated by the Joint Committee on Accreditation (JCA). Affiliated withtheFederation ofLawSocieties ofCanada and the Committee of Canadian Law Deans, the JCA operates as agent to the Canadian Law Societies who use its services. Alberta is the only province that does not use the Joint Committee on Accreditation (JCA), a choice induced by the Legislature rather than the Law Society of Alberta. For example, the JCA usually requires LL.B graduates of British universities to attend two full years study at a Canadian Law School, including specified courses.2' Conversely, in 1985, the same credentials were evaluated by the Professional Examinations Office of Alberta's Universities Co-ordinating Council, who would grant permission to article immediately while concurrently requiring two extra substantive law courses (Canadian Constitutional Law and Land Titles). Yet the reasons, policy and weighting, for a distinction between a foreign firstlaw degree and a Canadian first law degree, or indeed graduate law degree are not clear. The Edwards Report, acknowledged the mobility conundrum of Canadian lawyers with a foreign first law degree saying that:

Foreign law degrees ... The situation in Alberta is unique, because of provincial1995 CanLIIDocs 174 legislation which governs the situation. It has created problems in the past, in circumstances where a foreign applicant qualified for call and admission in Alberta under that province's requirements, and then soughtto transfer to British Columbia. B.C. rejected the application because the person had not complied with the Joint Committee on Accreditation's requirements. Our Committee is concerned that the two different standards which are in force now may give rise to claims that inter- provincial mobilityis being frustrated. We are gratified that thereis now closerliaison betweentheprovincialboard inAlbertaandtheJointCommittee onAccreditation and we hope that this will enhance consistency between the two systems28 However, this gloss does not reveal the restrictive practices employed by the Law Society ofUpper Canada andthe Law Society ofBritish Columbia. By reliance on formalism and sophistry, the Law Society of Upper Canada29 and

the temporary andpermanent mobilityoflawyers inCanada, theprovision oflegal services by interjurisdictional law firms and the practice of foreign legal consultants . Appendix 2 dealswith permanent mobilityoflawyers withinCanada.Art.2(a) provides thattransferring lawyers must "complete successfully this Society's examinations onjurisdiction-specific substantive law, practice and procedure...'. 21 But requiring two years study in a Canadian law school means thatapplicants may apply for advanced standing and receive a Canadian LL.B which obviates the need for a JCA certificate. Furthermore, someCanadian law schools do not make foreign advanced standing applicants take all the courses otherwise required by the JCA. Effectively, it is possible to get a second LL.B and avoid some ofthe course requirements set by the JCA. 28 Edwards Report, supra footnote 26 at 6. Zv The LSUC refused admission to the bar Admission course in Ontario without an approved Canadian LL.B degree or the certificate of the Joint Committee on Foreign Accreditation or three years of active practice which would allow admission by passing the transfer examinations. TheLSUC did not give notice ofits obdurate stand. Forinstance, the doctrineofinformed notice is a contractual analogy requiringanofferorto point out onerous or unexpected terms to an offeree: Jacques v. Lloyd D. George & Partners Ltd, [1968) 1 W.L.R. 625 (C.A.). 19951 Commentaires d'arrêt 127

Law Society ofBritishColumbia saidthat evaluationofforeign legalcredentials was the responsibility of the Joint Committee on Accreditation, adding that "This is not a question of mobility, Charter or any other 'rights', but one of academic qualification."" For over a year, the Joint Committee refused to evaluate academic qualifications for members of a Canadian Bar." Under the principle that an assignee is clothed in the rights of her principal (Assignatus Utitur .lure Actoris), the Joint Committee on Accreditation (JCA) arguably failed in its Law Society ofUpper Canada (LSUC) related obligation to assess new-foreign legal credentials, counter to the principle that no person shall be condemned unheard (audi alteram partem). The LSUC-JCA catch-22 situation ended in December 1987 when its mandate was alteredto consider all academic work offoreign trained Canadian lawyers but not their Canadian professional experience. Furthermore, the Supreme Court of Canada decision in Blackv. Law Society ofAlberta, which led to the Richards decision, was riot delivered until April 20, 1989. By 1990 the JCA was considering the applicability of the professional background of foreign trained Alberta lawyers to the legal system in common law Canada. Apparently the JCA does notrealize that Alberta is a common law jurisdiction but it decided upon onerous requirements (three substantive law courses, 1995 CanLIIDocs 174 criminal or civil procedure, taxation and evidence), before their certificate of equivalencewouldissue,permitting the next step, 1 .5 years ofarticles, including the full Bar exam in Ontario. Although the JCA grants ethnic minorities between three to five years, it placed a two year limit on completion of the examinations, after which their evaluation expired."

10 "The Benchers have setstandards for entry into the profession in thisprovince, and an applicant cannot in effect set his own standards; nor can this law Society be bound or constrained in any waybytheproceduresanddecisionsofthelaw SocietyofAlberta." This begs the question, why did the Law Society of B.C. ultimately change its transfer rules following the Richards decision? 31 In 1986, the JCA advised that members of the Alberta Bat did not have to be evaluated by it and should write directly to the LSUC. Until December 1987, neither the LSUCnoritsagent, the JCA,would evaluatetheforeignlegal credentials ofapplicants who are members of the Bar of a province in Canada. Arguably, this violated the emerging doctrine of "Legitimate expectation" . In Schmidt v. Secretary ofStatefor Home Affairs, [196911 All E.R. 904, Denning M.R. considered the essential procedures neededto foster naturaljustice and fairness, saying at 909: "...whether he has some right or interest, or I would add, some legitimate expectation ofwhich itwouldnotbefairtodepnvehimwithout hearing what he has to say." In Council ofCivil Services Unions v. Ministerfor the Civil Service, [19851 1 A.C. 374, Lord Fraser of Tulleybelton, said at 401 "Legitimate, or reasonable, expectation may arise either from an express promise given on behalf of a public authority of from the existence of a regular practice which the claimant can reasonablyexpecttocontinue." SeeR.E.Young, "LegitimateExpectationsofAdministrative Policy Action" (1986) 44 Advocate 803; "Emerging Issues Legitimate Expectations" in Canadian BarAssociation,Administrative Law: Past, Present &Future (Ottawa: C,B.A., 1989). 32 M. Crawford, "A Shortage of lawyers? - Ethnic Communities Seek RelaxedBar Admission" Financial Post (10 March 1992) 15.

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Following the Richards case, and the relaxation of the three year rule in British Columbia, the LSUC began a yet to be completed evaluation of their transferregime. Presently, itis anomalous that an Albertalawyer with a foreign first degree could be able to argue a case with national implications in Alberta courts that eventually reaches the Supreme Court of Canada (or alternatively practice in the Federal Court of Canada, anywhere in Canada) yet be fettered from reasonable admission requirements to Ontario or British Columbia. However, some provinces that use the JCA evaluation of equivalencies waive these requirements forduly qualifiedmembers ofCanadianbars, raising further questions about the function of the Joint Committee on Accreditation (JCA). Interpretation is elastic, covering many functions . By itself, discretion is not principled, although it may be bounded by principles. Oliver Wendel Holmes suggested when the rules fail to fit, judges and other law-givers are interstitial legislators, free to modify inconvenient rules, to cover the case at hand whenever there is a gap in the substantive rules. But rather than being a guideto decision making,the "elasticityofinterpretation is likefigleafcovering judicial discretion."" Furthermore, the evaluation of professional qualifications involves quasi- 1995 CanLIIDocs 174 judicial functions ." The Edwards Report acknowledged that "[identifying which aspects of statute law, common law and procedural law are'jurisdiction specific' is a challenging exercise."" Yet the JCA does not provide reasoned decisions. It operates formalistically, presenting a handful of purportedly immutable guidelines in order to protect the self-defined `integrity' of the Canadian legal system." But the experience of the main actors in any legal systemis accentuated by the fast pace of the "global village"" and the modern reality of pluralism in Canada. Some ethnic communities recognize that "foreign-trained lawyers face too many hurdles in gaining admission to the provincial bars"." For instance, Cornelia Soberano is one of the few lawyers of Filipino descent practising in 33 R. A. Posner, The Problems ofJurisprudence (Harvard University Press, 1990) at 20,21 & 30. sa The "duty to decide" function will "affect rights or impose obligations": Security Export Co. v. Hetherington, [1923] S.C.R. 539 at 549-551. 3s EdwardsReport, supra footnote 26 at 7. 36 According to the JCR's, Evaluation of Legal Credentials For Accreditation GeneralInformation (December 1993) at2: "The JCAdoes not usually evaluate applicants who have already been admitted as members of a law society in a common law province of Canada, but it does evaluate applicants from Qu6bec and Alberta who have less than threeyearspractice experience within thefiveyears immediatelypreceding anapplication to transfer. Evaluation Guidelines at 6, concerning applicants from the U.S.A, further states: "In addition, theCommitteetakesinto accountrelevantgraduate legal educationand experience in law teaching at a university law school level." But the guidelines, which purport to express the principles of evaluation do not take into account teaching at university law schools outside Canada or the U.S. 37M. McLuhan, UnderstandingMedia: The Extensions ofMan (New York:McGraw- Hill, 1964). 11 Supra footnote 32. 19951 Case Comments 129

Toronto, who says, "What we want is an objective qualifying exam"." But the purported focus ofthe JCA arguably hides their real agenda-to be a brake on entry to the profession. There are more than 100 Filipino-trained lawyers in Toronto alone and only two have been accredited. Soberano said that ethnic communities like these "are not asking for any special favours or to lower the standards. They're saying let us have access on our merit"40 Earlier, the Law Society of Upper Canada announced a campaign to encourage more minorities to become lawyers .41 Yet the Executive Secretary of the Joint Committee, said it would be wrong to advocate a quota system. "I would be very hesitant to support a blanket affirmative action program in a profession that is concerned with professional standards and protection ofthe public ."42 Arguably, the JCA fetters natural justice by the requirement for new evaluationfees, thevariabletimelimit oncompletingitsexaminationsdepending on minority statusand(itspast)refusal to considernew qualifications ofAlberta bar members. Nevertheless, theEdwardsReportadoptedaguidingprinciplethat"Canadian

lawyers have constitutional rights relating to the inter-provincial practice of 1995 CanLIIDocs 174 law". It qualified this principle saying that "each jurisdiction retains the authority and responsibility to ensure that: a) a member of its society who practicesin anotherjurisdiction, orb) a member ofanother Canadian governing body who practises in its jurisdiction, does so competently, ethically and with financialresponsibility43 This guiding principle and the set ofnorms concerning evaluation ofcredentials by Canadianlaw societies may look good on paperbut they are not coherently enforced. The Edwards Report acknowledged that the federal government was concerned "about mobility restrictions imposed by governing bodies on the movement of lawyers among provinces and territories."' The Edwards Report discussed the question of mobility for Canadian lawyers with less than three years active practice. It concluded by recommending that: "Transfer aftercall, butbeforeone complete yearofpractice ofthelawofthehomejurisdiction"- Applicants should "complete 6 months articlesinthehostjurisdiction,minus 1 month ofarticles for every 2 months ofpost-call practice ofthe law ofthe homejurisdiction complete the hostjurisdiction's professional legal trainingprogram completethehost jurisdiction's transfer examination."a5 Thus for any qualified Canadian lawyer, most Canadianjurisdictions tend to follow this requirement or have lesser requirements . Others are moving

39 Ibid. a° Ibid. at 15. a` "Lawyers Trying to Strike a Racial Balance" Financial Post (8 August 1991) 10. 42 Ibid, per V. Krishna Q.C.. a3 Edwards Report, supra footnote 26 at 5 . as Ibid. at 2. as Ibid. at 59. 130 LA REVUE DU BARREAU CANADIEN [Vol.74

towards this standard, although extinction of the old three year rule has paradoxically tightened up the rules for transfer applicants who do not have a first law degree from a Canadian law school.

The Ontario Transfer examination

Ontario has stringent rules concerning interjurisdictional transfer yet it has relatively lenient internal rules for Ontario lawyers who, having been out of practice, wish to requalify. An applicant from outside Ontario may take the transfer examination if they have a Canadian law degree and three years active practice. The Ontario transfer examinations" take place three times a year (January, May and September) and consist of Civil Litigation, Family Law, Business law, Real Estate, Estates, Professional Responsibility. All six sections have a writtenportion, markedon a pass-fail basis, taken over a four day period. Bar admission materials are available at $642. Passing of all written sections obviates need for the comprehensive oral examination. Instead of the transfer examinations, candidates may opt to sit Phase II of the Bar Admission Course, a three month course beginning in September each year in London, Toronto or

Ottawa. 1995 CanLIIDocs 174 Ontario has three categories of members, (1 .1) those in active practice in respect of Ontario law who pay 100% of the annual fee (which in 1993 was $1,211.24, (1.2) those not practising in Ontario, including law teachers ("education") who pay 50% of annual fees, and (1 .3) those unemployed who pay 25 %of annual fee. On March 25, 1994, Convocation, (the governing body ofthe LSUC), approved aRequalificationpolicy47 whichoperatesprospectively fromJuly 1, 1994 andestablishesthe rulesconcerning requalification ofOntario lawyers who, regardless oftheir fee paying status, do not make substantial use of their legal skills in their current work. Members will be required to file a "qualification status each year and must submit an application to the sub- committee of the Professional Standards Committee ifthey do notfitwithin the "qualified" category for a periodoffive years or more. Eachmember's case will be considered on an individual basis. Members engaged in the following types of work will be deemed to be in the "qualified" category: private practice in Ontario or anotherjurisdiction, inhouse counsel, clinic lawyer, M.P. orM.P.P., government lawyer, policy analysis or legislative drafting, member of an administrative tribunal, arbitrator, mediator, conciliator, legal teaching andlor legal writing, legal research staff. However, this newpolicy will nottakeeffect until July 1999 and thecurrent LSUC "Policy on Reinstatement" only deals with members who have been suspended. If a member has been suspended for less than 5 years, she may be re-instated by paying back "all amounts outstanding on account of arrears of

asLawSociety Act, R.S.O. 1990, c.L-8 (The Law Society ofUpper Canada, Ontario) March 1993, Rule 50, March 1993, the transfer exam costs $600, application to transfer $125, call to Bar, $210, annual fees. 41 Law Society of Upper Canada, Requaliication Policy (25 March 1994). 19951 Commentaires d'arrêt 131

annual fees, Errors and Omissions Levy and late filing fees. If suspended for 5 years or more, these amounts must be paid, and the member must pass the Requalification Examination, which is the same as the Transfer (from other provinces) examination.

Lawyer Nobility in the Maritimes

In 1993, Richards c.Barreau du Québecwasdistinguished in O'Neillv. The Law Society of New Brunswick," another first-instance decision. Although NewBrunswickhas athree yearpractice rule,the main reasonforthe distinction is that New Brunswick merely imposes a six month period ofarticles plus two short examinations on all candidates who have less than three years active practice within the last five years49 Furthermore, New Brunswick does not discriminate against members ofa Canadian Barwhose first law degree is from outside Canada. The Law Society of New Brunswick regularly exercises its discretion to waive either its bar admission course or the transfer examination. An applicant who opts for the Examination may be admitted after only six months as a student member. Mr. O' Neill was an Ontario lawyer with less than

three years active practice, who challenged the requirement of six months 1995 CanLIIDocs 174 articles. The Court in O'Neill v. The Law Society ofNew Brunswick dismissed his application with costs of $750, finding that "[t]he New Brunswick Act and regulations are more accommodating of lawyers from other Canadian jurisdictions.""' Perhaps one of the reasons for this outcome was that between commencement ofthe application and decision, the applicant became admitted to the New Brunswick bar, hence the issues were moot in so far as they concerned Mr. O'Neill even though it was of "sufficient importance that the court should address them."51

'$ (1993), 141 N.B.R. (2d) 1 (Q.B.). a9 Letter of Michel Cartier, Secretary, Law Society ofNew Brunswickto A.J. Black (7 May 1990) "ifamember of the Law Society ofAlberta, who has notpractisedfor three (3) years ofthe lastfive years, wishestobecome amemberofourSociety, thatpersonwould have to complete at least six (6) months of articling, successfully complete the Bar Examinations which consist ofan oral examination of our Rules of Court and a written examination on the Statutes ofNew Brunswick. Thatperson would not have to complete the (8 week) Bar AdmissionCourse. The factthatthis personreceived his first law degree from outside ofCanadawouldnot bea factor, as the person wouldbe applyingas atransfer from the Alberta bar and not as a foreign applicant. We would presume that this person would have met all therequirements ofthe AlbertaBar and would therefore be considered as member of the Law Society of Alberta." s° Supra footnote 48 at 6. s` Ibid. at 1. NewBrunswick:PursuanttoNewBrunswickLaw SocietyAct1986, s.9(1), the 1986 Regulations, Reg. 13(3) says that the `term "practice of law" bears its usual meaning and for greater clarity includes a person employedin his capacity as a barristeror solicitor by a government department or agency, or municipality or corporation (July 1990). Reg. 22requiresa"program approved by the CouncilofStudies leading to a degree in Common law." Reg. 28(2) allows lawyers from other Canadian provinces, who have practiced less than three ofthe five years preceding application, to be admitted following six months articles. Reg. 28(3) To qualifyforadmissionundertheprovisions ofsubsection 132 THECANADIAN BAR REVIEW [Vol.74

Nova Scotia follows the Ontario practice and requires a JCA certificate. It formerly required completion of six months articles and passing their statutes and Civil procedure examinations and likely did not require completion ofthe Bar Admission course if the candidate had completed one in any province within the five years preceding application for transfer. However Nova Scotia recently changedits rules, probably due to a trend for standardisation stemming fromthe Edwards report impetus.52 Prince Edward Island statutes, procedures andpracticeRegulation 17(1)requires individuals with a British Commonwealth, American or Canadian civil law degree to obtain the JCA certificate, complete six months articles (if she has practised three years in the last five year period) otherwise articling fortwelve months, plus passing the bar admission course .53 Newfoundland is one of the few provinces to define the term "legal practitioner" ." Like the practice in some American states, Newfoundland provides for reciprocal recognition of lawyers from other Canadian provinces which likewise recognize Newfoundland lawyers.55 Perhaps because of its history,Newfoundland expressly recognisesBritish lawdegrees forthepurpose of enrollment as a student-at-law (which the education committee deems to be equivalent ofCanadiandegrees) for British lawyers whohave activelypracticed

forthree years, whereupon not more than one year's articles is required.56 This1995 CanLIIDocs 174 allows the Law Society of Newfoundland education committee to recognize degrees (for candidateswithoutpractice experience) whichit considers to be the equivalentofa degree at aCanadianlaw school," and recognizeforeign degrees

(2), an applicant mustbe in good standing as a person authorized to practice law in the last jurisdiction in which he practiced prior to his application . Reg. 29(1) requires passing the BarAdmission Course and the BarExam whileReg. 29(2) allows the Council to waive the requirement for completion of the Bar Admission Course. Reg. 30(1) provides for the admissionofthe deanofLaw at UNBorMoncton at anytime andformembersofthefaculty of law who are in their third consecutive year. See now Proposed Law Society Act, 1995 which, amongst a number ofchanges includes the abolition of the `academic call'. 52 Letter from Victoria Rees, Director of Administration, Nova Scotia Barristers Society, (3 May 1990) citing Regulation 22. Nova Scotia, Barrister and Solicitors Act, R.S., c.30, s.l (amended 1990, c.25,1992, c.13, Reg. 19: applicants who are a memberof a Canadian bar, who (c) has less than three years active practise inthe five years preceding application, shall (d) serve article specified by the Committee (e) pass Bar Admission Course or components specified by the Committee. Reg. 22, members of Dalhousie law school for 2 years and will continue for a further 3rd year and holds a graduate degree in common law or is a member ofanother Canadian Bar. Ss Letter from Beverly Mills Stetson, Secretary-Treasurer, Law Society of Prince Edward Island (13 May 1994). 54 The Rules ofthe Law Society of Newfoundland, pursuant toThe Law Society Act, 1977, S.N. 1977, c.77 as am. Definitions : 1 .02(e) "legal practitioner" means a member, a person enrolled under Section 42 ofthe Actand amember ofthe Bar of anotherprovince or territory in Canada. 55 Ibid. Rule 6.21 provides for a "Courtesy Enrollment" for limited practice in Newfoundland, at discretion of the Education Committee, providing that the home law society of the applicant provides reciprocal courtesy to Newfoundland lawyers. 56 Ibid. s.38(3). 5' Ibid. s.38(1) s.39(1) empowers the education to prescribe extra examinations for law graduates from outside Canada. 1995] Case Comments 133

of applicants from other provinces who have less than three years active practice ss

Lawyer Mobility in the Northwest Territories, Yukon, Saskatchewan, Manitoba, Alberta and British Columbia The two Canadian territories have quite reasonable transfer rules which may partly be due to their geographical isolation from the mass of Canada's population. Any member ofa Canadian bar, regardless ofthe origin oftheir first law degree, may be admitted to practice in the Northwest Territories,-19 by passing an open book exam, which can be completed by correspondence,O on that jurisdiction's Rules of Court and Laws. This is also true for the Yukon, which admits any active members in good standing of a Canadian bar, without articles, providing the candidate passes the three hour openbook statutes exam, consisting of true/false, yes/no-type answers with explanations and naming of statutes61 In Manitoba, transfer applicants with less than three years active practice, must re-article 11 1/2 months in -conjunction with the Bar Admission course. Manitoba, which is currently reviewing the implications of the Richards 1995 CanLIIDocs 174 decision, makes alternative provision for admission to practicefor applicants of "exceptionalmerit"62 Saskatchewanrequires Canadian lawyers who have less than three-years experience to article for six months and write that province's statutes examination63

"dbid. x.38(2). 19 Rules of the Northwest Territories, s.39 provides for admission of any active memberofany Canadianlawsociety, subjectto passing rules of court examination.Letter fromP.L. Iiomenick,DeputySecretary-TreasurerLaw SocietyoftheNorthwestTerritories (24 August 1989). so Formal admission requires taking an oath before a Justice ofthe Supreme Courtof the Northwest Territories. 61 Letter from Jan Graham, Executive Secretary, TheLaw Society of the Yukon (14 September 1990). The YukonLegalProfession Act, s. l "active member" means amember ofthe society in good standing who is entitled to practise law intheYukon under this Act. Membership qualifications : s.20(1) The following persons are qualified to apply for admission to the society and enrollment as members: (a) anyperson who (i) has beenduly called to the bar ofa province or has been admitted to practise as an attorney, advocate, barrister or solicitor in a province for a period of at least 12 consecutive months immediately preceding the date of application or such other period as may be prescribed by the rules, (ii) is amemberin good standing ofthe law society of the province inwhich he or she last practiced as an attorney, advocate, barrister or solicitor. 62 Manitoba Law SocietyRule 100(whichprovides fordiscretionary requirements tobe imposed upon such candidates) . Letters from Ms. Eve M. Finnbogason, Director of Professional Education, Law Society ofManitoba (19 May 1994) and (19 November 1993). 63 Saskatchewan :LegalProfessionAct, S.S.1990, c. L-10.1: Rules oftheLawSociety of Saskatchewan, adopted September 13, 1991. 5.190(3) Inactive members have all the rights and duties of membership in the Society except that he or she is not permitted to practise law. Rule 150(e)(i) Admissionas a student-at-law requires completion ofat least 2 years towardstherequirements foraBachelors degreefrom a common law facultyoflaw in a Canadian University approved by the bencheis or [amended Dec 9, 1993] (ii) aJCA 134 LA REVUE DU BARREAU CANADIEN [Vol.74

In Alberta, the qualifications and examination ofbarapplicants is underthe control of the Co-ordinating Council. It evaluates non-Alberta degrees and prescribes the content of any examinations at university standards in subjects pertaining to substantive law in forcein Alberta that arerequiredbythe Councilto betakenby theapplicant.64 Provision is made for enrollment ofCanadian lawyers ofthree years standing, who have "been actively engaged in the practice oflaw" "foraperiodorperiodstotallingatleastthreeyearsinthe5-yearperiodimmediately precedinghis application for enrollment."6s Applicants with less than three years active practice may receive reduced articles but mustcomplete the bar admission program. Alberta expressly recognizes enrollment of lawyers of three years standing from the United Kingdom, Eire, New Zealand or Australia, subject to Universities Co-ordinating Council discretion to prescribe extra exams. In British Columbia, the former requirement that applicants practice for a minimumofthree years in theirhostjurisdictionprior to an application fortransfer was abolished on September 10, 1993. Thenewrules stateifthe memberpractised orwascalledinhis otherhostjurisdictionwithinthethree-yearperiodimmediately preceding the date of their application, then the applicant is required to write the transfer examinations. If a member has not practised for a period between three

years and under seven years, then the applicant is required to write the transfer 1995 CanLIIDocs 174 examinations. If the member has not practised formore than seven years, then the credentials committee determines the conditions of admission; for example, re- articling foraperiodofninemonths, completion oftheten-weekprofessionallegal training course, or restrictions on practice once admitted.66 In British Columbia, members of other Canadian Law Societies who do not have adegree from a Canadian universitymust obtain a certificate ofqualification from the Joint Committee on Accreditation before writing the transfer examinations.67 However, the EdwardsReportrecommendedthat"each governing body review its own ethical rules, to ensure that they comply with the Charter's mobilityrights"61 Although the B.C. reforms stem fromtheremarkableRichards case, they are flawed. Although B.C. has abolished the three-year rule, it still

certificate. Rule 153 provides a 12 month articling term. Admission as lawyer. Rule 170 allows other Canadian lawyers with at least 3 years active practice in the last 5 years to qualify without articles by passing an examination on statute law, court procedure and practice, and those with less than 3 years activepracticeare required toarticle for3 months and pass an examination on statute law, court procedure and practice. However, Rule 170(5) (Amended Dec. 9, 1993) requires applicants without an approved Canadian LL.B to obtain the JCA certificate before applying for admission as a lawyer. 6^ Alberta, Legal Profession Act, R.S.A. 1990, c. L.9.1, s.39(1). 6s Ibid. s.40. 66 Letter from Katarina Hodak, Office of the Secretary, Law Society of British Columbia (9 December 1993). 67 Rule 370(6), Rules ofthe Law Society of B.C., (Sept 1993) pursuant to the Legal ProfessionAct,S.B.C. 1987,c.25, Rule302(2) applicantaffectedbydecisionofsecretarymay make written request that matter be referred to Credentials Committee. Rule 311(1) c(i) Enrollment in admission program, proof that "the applicant has completed the requirements for a degree from a common law faculty in a Canadian University or (ii) JCA certificate. 61 Edvards Report, supra footnote 26 at 22. 1995] Commentaires d'arrêt 135

requires thatCanadian lawyers with a foreignfirst law degree obtain the certificate ofthe JCA, thereby perpetuating the tautological distinction between practice and academic qualifications. Transfer rules in the twelve Canadian Jurisdictions can be divided into categories. Four jurisdictions are "liberal" : Qu6bec, N.W.T., Yukon and New Brunswick have direct or very liberal transfer rules. Three others are "semi liberal": Newfoundland seems to have some discretion (expressly favouring Britishlawdegrees) toallowre-articling &BarAdmission course asdoesManitoba (11 .5 months including Bar Admissioncourse withpossibility ofreduced articles, and provision for exceptional merit). Alberta is receptive to foreign first law degrees (as illustrated by my example) & presently requires Bar Admission & or articles forthose withlessthanthree-years practice althoughthey areintheprocess of changing the rules. Four are "tough": Nova Scotia, F.B.I. & Saskatchewan are tough like Ontario. One province is a "Hybrid" (part liberal, part-tough) : British Columbia is liberal forholders of Canadian law degrees butstill uses the JCA for foreignfirstlawdegree holders (itisharderforthemasthethree-yearactivepractice rule door is closed).

Academic callfor Law Teachers: Bar Exam Bypass 1995 CanLIIDocs 174

Academic lawyers, employed in their second consecutive year as a dean of a law school in Ontario or full-time faculty members who have entered their third consecutive year in that position are eligible for a direct call to the Ontario Bar at the law society's discretion.' Presumably, the rationale is that university law teachers, being good enough to teach law should be good enough to practice law without facing the hurdles of articling and bar examinations . Nova Scotia permits an "academic call" for full time members of faculty at Dalhousie Law School with professorial (understood to be full, associate or assistant) rankfortwo yearsprecedingthe application date. This type of admission by-passes articlingandexamination requirementsbutlimitsmaybeimposedonthe type ofpractice one is permitted to carry out. The Nova Scotia Barristers' Society requires thattheapplicanthasrenewed hercontract tocontinuefulltimefor atleast afurtheryear. Such applicantmusthave agraduatelaw degree from a commonlaw university orbe a member ofanother Canadian bar .70 British Columbia permits admissionoffull-timelecturers attheUniversity ofBritish Columbia,orUniversity of Victoria, or indeed a full-time lecturer at a common law faculty in a Canadian university for at least five ofthe last eight years, providing they have been found to have an adequate knowledge of the common law 71 Alberta also provides for direct calls72

69 Law Society Act, supra footnote 46, ®. Reg. 708(5)/93. '° Supra footnote 52. "Rules oftheLaw SocietyofB.C., (Sept 1993)pursuanttotheLegalProfessionAct, S.B.C. 1987, c.25, Rule 311(1) c(iii) (a). 72 LegalProfession Act, suprafootnote 64, s.5.42 provides forenrollmentoffull-time members of the Faculty of Law of a University in Alberta who have been continuously employed foratleast2years plus anyexaminations required by the Education Committee.

136 THE CANADIAN BAR REVIEW [Vol.74

Likewise in New York, a full time member of the law faculty on the American BarAssociation list of (170 or so) law schools, anywhere in the U.S., at the associate professor rank, may be admitted without examination 73 Thus in many Canadian jurisdictions, it is possible for academics trained outside of Canadato be admitted to practice while Albertalawyers, with a foreign firstlaw degree are required to top-up their legal educationbefore being allowed to take the provincial transfer test.

American and European Lawyer Mobility

Comparatively, most common law degrees from outside the U.S. entitle graduates to write theNew York state bar exam 7a Admission to the New York state bar is user-friendly since most states require an American BarAssociation (ABA) approved law degree. The former requirement that a bar applicant be a citizen ofthe U.S. is no longer constitutional ." Many states grant reciprocity for experienced out-of-state lawyers but twenty-eight states do not recognize reciprocity.' Although the ABA opposes thepractice, Wisconsin77 &Montana7l havea "Diplomaprivilege", automatic admissionto a state barafter meetingthe

requirements atthe state law schools, plusmeeting the "character requirements" 1995 CanLIIDocs 174 familiar to all jurisdictions."

73 NewYork Court ofAppeals, Rulesforthe Admission ofAttorneys andCounsellors at Law (revised November 1993), s.520.9(d)(ii). 74 lbid. s.520.5a "Study of law in foreign country; required legal education". New York approves common law degrees from countries in the British Commonwealth or qualified lawyers from other jurisdictions write the state bar exam without having to complete extra courses. American Bar Association, Section on Legal Education & Admission to the bar and National Conference ofBar Examiners, Comprehensive Guide to BarAdmission Requirements 1992-1993 (1992). 75 Re Griftths, 413 U.S. 717 (1973). The requirement of citizenship is not necessary to practice law in England (Solicitors (Amendment) Act (U.K.), 1974 c.26, s.1). The Supreme Court ofCanada held that the former requirement of Canadian citizenship for admission to the practice of law violated s.15(1) of the Canadian Charter ofRights and Freedoms:Andrews v. The LawSociety ofBritish Columbia (1989), 56 D.L.R. (4th)1, La Forest J. at 39 "History reveals thatCanada did not for many years resist the temptation of enacting legislation the animating rationale of which was to limit the number ofpersons entering into certain employment." 76 S. Gillers, Regulationoflawyers:ProblemsofLawandEthics, 3ded. (Boston: Little Brown & Co., 1992) at 545. 77 Wisconsin SupremeCourtRules 40.02(2),40.03 (West 1991). StudentsatWisconsin law schools are automatically admitted to the Wisconsin bar upon graduation. 78 Huffman v. Montana Supreme Court, 372 F. Supp. 1175 (D.Mont) affd, 419 U.S. 955 (1974). 79 J. P. White, "Legal Educationin an Era ofChange: Law SchoolAutonomy" (1987) Duke L.J. 292 at301. Numerous "character" cases have discussed the widerangeofhuman behaviour, for instance: Gord v. Gibb, 219 Va. 1019, 254 S.E. 2d 71 (1979) (joint ownership of a house by female applicant with a male, both unmarried, not a bar to good moral character). 19951 Case Comments 137

Opponents of state bar exams say that they do not vet how welllaw schools train students, nor enhance the profession's prestige, yet restrict entry of new competitors.") Bar examiners admitthat bar exams are not a predictor of ability topractice law." Indeed, "thebar examination does notpurport to test all of the essential characteristics of the complete lawyer"." European Community lawyers can transfer to other Member States by passing a 2-4 hour exam, plus a language test." Ironically, there is greater mobility accorded to European lawyers than there is accorded to Canadian lawyers despite the fact that Canada's system of government is unabashedly federal.The E.C. is nominally an economic union, eschewingthe political word "federal" as the unification process continues incrementally. Conversely, only half of the jurisdictions in Canada provide rational and reasonable rules for transfer. Prior to 1991, lawyers transferring to England from the E.C. or Commonwealth had to meet a three year requirement of active practice. Because of the E.C. Directive on Mutual Recognition of Higher Education Diplomas, for about $1,200, any common law Canadian lawyer can qualify as a solicitor in England by passing a two hour examination in 'professional conduct and accounts' . Qudbec lawyers have to sit g hours of exams. These

English solicitor exams are being offered in Toronto starting in November 1995 CanLIIDocs 174 1994.84

Conclusion

Law Societies are in an inherent conflict of interest because of their obligation to theirmembership . While competition is said to create wealth, true competition often results in negative interest group behaviour-15 Accordingly, lawyers frequently extol the virtues of competition yet their actions spear of protectionism. Theprofession's standards ofpractice capturefieldsofknowledge

8° See generally, Gee & White, "Bridging The Gap: Legal Education and Lawyer Complacency" (1977) B.Y.U.L. Rev. 695 at 727-31, 735-45. 8' W. S. Rogers, "Title VII Preemption ofState Bar Examinations: Applicability of Title VII to State Occupational Licensing Tests" (1989) 32 Howard L.J. 563 at 566. 82 Ibid. quoting Stevens, "Diploma Privilege, BarExamination or OpenAdmission" (1977) 46 Bar Examiner 15 at 34. 83 E.C.Directive onMutualRecognition ofHigherEducation Diplomas, 89/48 (1989) L19/16. This directive liberalisedprofessional mobility affecting over 300million people in twelve countries, usingmany languages with two majorlegal systems, common and civil law based. See: "Cross BorderRaids" (1991) 36 Journal ofthe LawSociety ofScotland 327. 84 Transfer Unit, The Law Society, Ipsley Court, RedditchWorcestershire, England B98 OTD. 85 "Competition, like other therapeutic forms of hardship, is by wide and age-long consent, highly beneficial to society when imposed upon - other people. Every industry that can afford a spokesman has emphasizedboth its devotion tothe general principle and the over-riding needfor reducing competition within its own marketsbecause this the one areainwhichcompetitionworks poorly." G. Stigler, in Stiglerand Cohen, CanRegulatory Agencies Protect Consumers? (Washington D.C.:American Enterprise Institute forpublic policy Research, 1971) at 9. 138 LA REVUE DU BARREAU CANADIEN [Vol.74

fromthepublic allowingpractitioners toperpetuate theideathatonlyprofessionals are competent in a particular area which forces the public to put faith in their purported knowledge. Law societies that discourage mobility by lawyers from other provinces are motivated by considerations of money rather than quality. Indeed, localised bar admission procedures cause disadvantage to at least one group; multi-provincial or multinational companies. In Ontario, the Law Society of Upper Canada's (LSUC) practice is out of sync with global developments partly because theLSUC represents over halfof Canada's lawyers. The practice ofthe LSUC wrongfully discriminates against two classes ofAlbertalawyers-andthe "quota" reasonfor such discrimination is to keep the number of lawyers down in Ontario. This is anti-competitive and arguably runs against the spiritof the Canada- U.S. Free-tradeAgreement(FTA) .86 Article 1403 provides that (1) "certification ofnationals providing covered services shouldrelate principally to competence orthe ability to provide such covered services". Certification, (2) shall nothave the effect ofdiscriminatorily impairing orrestraining the access ofnationals of the otherPartyto such licensing or certification" ." Indeed the EdwardsReport acknowledgesthattheFFA guarantees expedited entryintoCanadaofAmerican attorneys, giving them rights to give advice in Canada about American law, 1995 CanLIIDocs 174 "subject to appropriate regulation by Canadian governing bodies"." Restrictive practices adversely affect the "vitality ofthe nation as a single entity".89 The role of lawyers in the national economy and the opportunity to practice law is a"fundamentalright".Thelegal profession has a non-commercial role as when out-of-state (or in Canada "province") lawyers represent persons who raise unpopular federal claims. U.S. states can not prohibit non-residents from gaining admission to its bar.9° At issue is the "profession or business" dichotomy9'

se Free Trade Agreement, Dec. 22, 1987-Jan. 2, 1988, Can.-U.S., 27 I.L.M. 281 (entered into force Jan. 1, 1989). Ratified by the United States-Canada Free-Trade AgreementImplementationActof 1988,Pub.L.No.100f449,102Stat.1851(codifiedatl9 U.S.C. § 2112 (1988)); codified in Canada by the Canada-United States Free Trade Agreement Implementation Act, R.S.C., c. 65 (1988). 8' Ibid. $$ Edwards Report, supra footnote 26 at 3. 89 Baldwin v. Fish & Game Commn, 436 U.S. 371 at 383 (1978). A state could charge a non-residentmore for an elk-hunting license than a resident, because elk-hunting is not a means of livelihood but rather is a "recreation" which was not "fundamental" to the promotion of interstate harmony. 9° Supreme Court ofNew Hampshire v. Piper, 470 U.S. 274 (1985), Powell J. Two otherU.S. SupremeCourtcases overturnedlimitations on practice byout-of-state lawyers: Frazier v. Heebe, 482 U.S. 641 (1987) concerning limits imposed by federal courts; Thorstenn v. Barnard, 842 F.2d 1393 (3rd Cir. 1988) aff'd 489 U.S. 546 (1989). 4' Piper, Ibid. Rehnquist J. dissenting (on issue on residency requirements), "Today the Courtholds that New Hampshire cannot decide that a New Hampshire lawyer should live in New Hampshire . This may notbe surprising to those who view law as just another formofbusinessfrequentlypracticed across state linesbyinterchangeable actors..however, ...the practice oflaw is fundamentally different from those occupations that are practiced

1995] Commentaires d'arrêt 139

Appropriate regulation oflawyers concerns professional failure, including malpractice or neglect of client matters. Preventative measures exist although therelationship between aparticularrule andthereductionofriskofprofessional failure is notalways clear. For instance, a requirement thatbar candidates have graduated from an accredited law school has an enormous financial and temporalcost. Epistemologically, itisdifficult toknowwhether the requirement produces a higher quality of work compared to the quality of work that would result withoutit. Furthermore, law society admission rules influence the supply and demand forlawyers hence these ruleshaveeconomic consequences, 92 such as attempting to inhibit "client flight" when national or regional law firms are proposed. InRichards v.Barreau du Québec,93 the threeyear activepractice rule was held to be a "quota system of sorts"94 Quotas are anti-competitive. Following the recent GATT deal,95 protected-industry law societies should consider replacing quotas (representing asupply-management system) andother "import restrictions" with tariffs which would gradually be reduced over the years. Like internationaltrade, Canadahas historically experienced barriers to the movement ofpeople and goods across provincial boundaries96 These barriers may violate federal competence over interprovincial trade and commerce.97 1995 CanLIIDocs 174 The provinces have a plethora of rules and regulations regarding occupations. Certified general accountants, for example, can perform a full range of accounting

across state lines without significant deviation from state to state. ...law is one occupation that does not readily translate across state lines. Certain aspects of legal practice are distinctly and intentionally non-national." 92 Gillers, supra footnote 76 at 535-36. 93 Richards v. Barreau du Québec, supra footnote 14 at 16. 94 Ibid. 95 See: the General Agreement on Tariffs and Trade, Oct. 30,1947, 61 Stat. A12,55 U.N.T.S. 194; and amendments. GATT established the framework for the modern international economy reducing quotas and tariffs on certain internationally traded goods. The Uruguay round was concluded by 117 nations in Geneva on December 16, 1993 and will be takeeffectJuly 1, 1995, cuttingtariffs, reducing subsidies, widening market access and applies the GATT regime to the service industries such as financing, banking, insurance, telecommunications,transport, consultancy, accountancy, films and television. When implemented, quotas will bereplacedby tariffs which mustdecline by atleast 15% over six years. 9s "Restrictions regarding professions and trades were not limited to the legal profession; they extended to pharmacists, optometrists, bankers and others. ... the nation has gained maturity in this area and legislation aimed at creating 'closed door types of labourlegislation' respecting alienshas tendedto disappear":Andrews v. The Law Society ofBritish Columbia, supra footnote 75, La Forest J. at 39; citing I. L. Head, "The Stranger in Our Midst: A Sketch ofthe Legal Status ofthe Alien in Canada" (1964) Can. Yearbook of Int'1 L. 107 at 128. 97 A province could not attempt to regulate trade which is properly a matter of interprovincial concern. Laskin, C.J.C. stated: "It is true that a Province cannot limit the export ofgoods from the province, and any provincial marketing legislation must yield to this. Re Agricultural Prod. MarketingAct (1978), 84 D.L.R. (3d) 257 at 319 .

140 THE CANADIAN BAR REVIEW [Vol.74

duties in Western Canada, but are not permitted to audit public companies in Ontario, Québec, Nova Scotia, P.E.I. and Newfoundland." Untilrecently, Qu6bec prevented Ontario andNewBrunswickconstruction workers from working in the province .99 Certified accountants in New Brunswick can not practise in Prince Edward Island because licensing requirements differ. Freertrade is needed within Canada in order for Canadians to keep up with trade liberalization between Canada and other countries. The U.S.-Canada Free Trade Act (FTA) and the North American Free Trade Agreement (NAFTA) has accelerated the mood for change.1110 In 1994, the federal and provincial governments concluded an Internal Trade Agreement'°' to be ratified by July 1995. It aims for uniform standards and regulations, including the professional services sector. The accord has seven chapters: procurement, investment, labour-mobility, consumer related measures and standards, agriculture and food, alcoholic beverages, natural resource processing, energy, communications,transportation andenvironmental protection. Labourmobilitybarriers comein the form ofprovincial occupational standards and residency requirements for professional or semi-professional occupations. Ontario negotiators want to treat all companies from foreign

provinces as they would treat their own, but this is subject to exceptions. 1995 CanLIIDocs 174 However, theInternal TradeAgreementrecognises the needforexceptions andtransition periods "z to the general principles ofequal treatment ofpersons, goods, services and investments'°3 as well as the reconciling of relevant standards.")' Each Party agrees to mutually recognize the occupational qualifications required of workers in other Party'sjurisdiction and to reconcile differences in occupational standards.'°5 Licensing and certification shall relate principallyto competence."' But Parties can opt out ofthese obligations if the their purpose is to achieve a "legitimate objective",'°' which includes objectivesrelated to "consumerprotection".'°a Any such "Allowable Inconsistent Measures" must be reported to and reviewed by the Forum of Labour Market

98 D. Campbell, "Trade barriers tumbling: Negotiators tackle task ofdrafting pact to stimulate free trade between provinces" Calgary Herald (18 February 1994) D7. vs Ibid. '°°Ibid. perBarry Prentice, Professor ofAgriculturalEconomics, TransportInstitute, University ofManitoba. '°' Canada, Internal Trade Secretariat, Agreement on Internal Trade, July 18, 1994. '°2 Ibid. art. 4(b). 101 Ibid. art. 3(b). '°4 Ibid. art. 3(c). 101 Ibid. art. 707 '°6 Ibid. art. 706. 'o'Ibid. art. 709(a) which (b) "doesnot operateto impair undulythe access ofworkers of another Parry who meet that legitimate objective; (c) the measure is not more mobility- restrictive thannecessary to achieve thatlegitimate objective; and (d) themeasure does not create a disguised obstacle to mobility." 101 Ibid. art. 712(1)e. 1995] Case Comments 141

Ministers .'°9 Although the Parties agree to assess regulated occupations"° the agreement is not a panacea for lawyer mobility. Lawyer mobilityis part ofthe gate-keeping conflictbetween an entrenched professional body and university based legal education."' Indeed critics like Judge Edwards attack the seemingly useless training in law schools which emphasize abstract theory andinterdisciplinary legal scholarship atthe expense of practical doctrinal-policy scholarship and pedagogy."' He says that "too manylawprofessors are ivory tower dilettantes""' and that law schools should produce scholarship that is useful to lawyers and train ethical practitioners . Lawyers have an ethical obligation to serve their client fairly and creatively as illustrated by the rules against overbilling and conflicts of interest. But "competitive markets are not much fun for sellers: the effect of competition is to transform producer surplus into consumer surplus." While competition serves clients there is a complicated trade off with a second type of ethical obligation owed to people and institutions who are not the lawyer's client."' Thus, the implications of Richards are remarkable from a Canadian unity viewpoint, even ifrealpolitik suggests that the proportion oflawyertransfers to Quebec will not be as great comparatively, as transfers between the English 1995 CanLIIDocs 174 speaking provinces. Judicial activism'15 is needed in order to breakrestrictive practices by law societies yetits scopeis arguably less wherelitigation concerns a law society. Law societies are powerful opponentswho arelike gate-keepers, constituted by members of the organized bar. In Canada, the Federation of Canadian Law Societies,the Committee ofCanadianLawDeans, theCanadianEarAssociation and provincial law societies have a say in accreditating the law schools. The judiciary is really the ultimate bar admitting authority who has to supervise the bar licensing authorities . A more rational rule would be one that follows the Quebec practice of allowing any qualified Canadian lawyer to transfer by merely taking a transfer test. Instead, Ontario's current interjurisdictional transfer regime and the prejudice against "foreign" lawyers from Alberta reflects the tendency for lawyers torely on formalism and precedent. "Thepreoccupation withprecedent as authority may be one of the causes of Americanjudges' insensitivity to the ways in which foreign legal systems deal with problems similar to ours, since

tos Ibid. art. 709. "° Ibid. Annex 707(1)a. 1" Supra footnote 3. 1'zH. T. Edwards, "The GrowingDisjunctionBetweenLegal EducationandtheLegal Profession" (1992) 91 Mich. L. Rev. 34. 113 Ibid. at 33. "4 R. A. Posner, "The Deprofessionalization of Legal Teaching and Scholarship" (1993) 91 Mich. L. Rev. 1921 at 1922. "s "The prophecies ofwhatthe courts will do in fact, and nothing more pretentious, arewhatImeanby thelaw". OliverWendell Holmes, "ThePathofLaw" (1897)10Harvard L. Rev. 457 at 461.

142 LA REVUE DU BARREAU CANADIEN [Vol.74

foreign decisions have no authority in an American court exceptin therare case where a question offoreignlaw is presented . Too many ofourjudicial opinions contain unexamined assumptions, conventional and perhaps shallow pieties, and confident assertations bottomed on prejudice and folklore."Ii5 Restrictive practices by self-governing law societies involve legal legerdemain, lending credence to George Bernard Shaw's aphorism that "All professions are conspiracies againstthe laity." Many lawyers feelthat toomuch competition can be a bad thing and that law societies failed to address the question of numbers years ago. Some "older" members of the profession cite an enormous increase in professional liability insurance premiums due to the number of claims from those who do not do their work properly since they are forced to cut corners to stay alive. Nevertheless, in Ontario, the evaluation process isinconsistentdue to inconsistent policy. Since theenergy available for social regulation at any time and place is limited, control by law takes on an aspect of engineering."' In Ontario, the engineering is outdated. Canadian lawyers are not colonials in England yet foreign trained Alberta lawyers remain so at home. The Ontario and British Columbia law societies pretend to promote the public interest yet have a conflict of interest as lobbyists for their membership. Unlike disinterested and politically accountable actors, 1995 CanLIIDocs 174 financially interested and politically unaccountable law societies should not be trustedto decide whichrestrictions on competition advancethepublicinterest."'

l'6 Posner, supra footnote 33 at 97 and footnote 44 "Here is a typical example of judicial certitude: "No better instrument has been devised for arrivingat truth than togive a person injeopardyofserious loss notice ofthecaseagainst him and an opportunitytomeet it. Nor has a better way been found forgenerating the feeling, so important to a popular government, thatjustice has been done. JointAnti-Fascist Refugee Comm . v. McGrath, 341 U.S. 123 at 171-72 (1951), Frankfurter, J., concurring. 11" "Law operates under the principle of scarcity. The energy available for social regulation at any time and place is limited... Because ofthis fact, control by law takes on the aspectofengineering. We require... to invent such machinery as, with least waste, least cost and least unwanted by-products, will give most nearly the desired result." K. N. Llewellyn, "TheEffects OfLegal Institutions UponEconomics" (1925) 15 Am. Econ,Rev. at 666. "$ See: E. R. Elhauge, "The Scope ofAntitrustProcess" (1991) 104 Harvard L. Rev. 667, and Hoover v. Ronwin, 466 U.S. 558 (1984). 1995] Commentaires d'arrêt 143

The Concept of Incrementalism in Anglo-Canadian Negligence Law: Spring v. Guardian Assurance plc

Richard Mullender*

Introduction

In recent years, the paths of Canadian and English negligence law have diverged.' This divergenceis exemplified perhaps most strikingly in the contrast between the different approaches taken by the two countries' highest tribunals in the area of compensation for pure economic loss. Whereas the House of Lords in Murphy v. Brentwood District Council' articulated a general exclusionary rule, subject to a narrow range of exceptions' against such recovery, the Supreme Court of Canada has committed itself in Canadian National Railways Co. v. NorskPacific Steamship Co. Ltd.¢ to the incremental extension of the law's protective scope. In the recent decision in Spring v. GuardianAssuranceplc,s a case which, like Murphy andNorsk, concerns pure economic loss, there are, however, signs of a move, albeit an ambivalent one, in the direction ofthe adjudicative approach favoured in Canadian negligence 1995 CanLIIDocs 174 law.

1. Spring v. Guardian Assurance plc: the Facts and the House of Lords' Decision

Following his dismissal from his post as a sales director in the insurance industry, Mr. Spring made numerous applications for a post ofthe type he had lost. On receiving these applications, prospective employers sought as they were required to do by the insurance industry's regulatory body, LAUTRO,6 references bearing on, inter alia, his character, aptitude, and competence . On receipt of these requests, Mr. Spring's former employers found themselves under an obligation, again specified by LAUTRO,to make fulhdisclosure of all matters which they believed to be true and relevant concerning him. The references provided by Mr. Spring's former employers were sharply critical of him. They painted a picture of a man who had little or no integrity, illustratingthe point by relating how he had both exhibited awillingness to keep

*RichardMullender, oftheFaculty ofLaw, UniversityofExeter,Exeter, UnitedKingdom. ' See on this divergence, N. Rafferty, "The Supreme Court and the Development of Canadian tort law" (1994) 10 Prof. Neg. 123. ' [199012 All. E.R. 908. ''Most obviously, inthe form ofliability for negligentmisstatements, as established by the House ofLords in Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd., [1964] A.C. 465. 4 [1992] 1 S.C.R. 1021 . s [199413 All. E.R. 129. 6 LAUTRO (the Life Assurance and Unit Trust Regulatory Organisation) was established under the Financial Services Act 1986. 144 THE CANADIAN BAR REVIEW [Vol.74

particularly lucrative business for himself and had, in order to secure a substantial commission, mis-sold an unsuitable policy to an unwitting and vulnerable client. In the light of these "kiss of death" references, none of the employers with whom Mr. Spring had sought employment offered him a position. Ascribing the losses flowing from his continuing unemployment to the impact of these references upon his prospective employers, Mr. Spring brought actions againsthis former employers in, interalia, negligence, alleging carelessness in the preparation of the references7 At first instance, the plaintiff's claim in negligence was supported, Judge Lever Q.C. concluding that the defendants owed and had breached a duty of reasonable care relating to the preparation of the references.' The defendants appealed to the Court of Appeal, where it was held that no such duty ofcare was owed.' When Spring reached the House of Lords, their Lordships, by a 4-1 majority, decided that the giver of a reference can owe a duty of care to the person to whom it relates. They identified this duty as embracing both (i) the giving of the reference and (ii) the obtaining of the information upon which it is based. Three members ofthe House's majorityin Spring, Lords Goff, Slynn, and Woolf, also held that an employer's duty to take reasonable care in the

preparation of a reference could, in appropriate circumstances, be regarded as 1995 CanLIIDocs 174 being concurrently grounded on animplied term ofthe contract ofemployment entered into with the subject of the reference. In deciding in favour of the plaintiff, the House rejected the defendant's argument that a duty of the type argued by the plaintiffwould enable parties to bypass the free-expression sensitive requirement of malice which (i) is a component ofthe tort ofinjurious falsehood, and which (ii) has to be proved by a plaintiff in order to defeat the qualified privilege defence in the context of defamation law. Prior to the House's decision in Spring, injurious falsehood and defamation were the only two torts which offered plaintiffs any means of redress against reference writers where malice could be proved. The House, moreover, rejectedthe defendant's argumentthat findingforplaintiffwouldrun counter to public policy by inhibiting candour in the references. Before examining the speeches in Spring, I shall examine the concept of incrementalism, my aim being to provide an analytic framework by reference to which the House's present adjudicative stance in the negligence context can be identified and compared with that of the Supreme Court of Canada.

2. The Concept ofIncrementalism

When judges are confronted with novel negligence claims and respond by specifying new liability rules, they can be said to have extended the law

' The plaintiffalso advanced claims for breach of contract and malicious falsehood. See Spring v. Guardian Assurance plc, supra footnote 5 at 135, Lord Keith. $ Ibid. 9 [199312 All. E.R. 273. 1995] Case Comments 145

incrementally. Typically, sucharesponseis forthcoming wherethree conditions are satisfied. First, it has to be established that some significant interest ofthe plaintiffhas beenharmedby the defendant'° -the kind ofharm at stake in this connection may be physical as in Donoghue v. Stevenson," or mental as in McLoughlin v. ®'Brianr2 or financial as in Hedley Byrne & Co Ltd. v. Heller &PartnersLtd. ." Secondly, such harm mustbe shown to have occurred inthe context of a wrongful transaction between plaintiff and defendant- the wrongfulness of such a transaction consisting in its bespeaking a lack ofregard by the defendant for the significance of the interests harmed. 14 Thirdly, it has to be established that a finding infavour of the plaintiffwillnot beunacceptably costly vis-à-vis interests which countervail against those ofthe plaintiff. In this latterregard,judges talk, inboth Canada andEngland, of 'balancing' and weigh the positive value of supporting the plaintiff's claim against the negative value which can be expected to arise from the 'floodgates' problem.15 Discussionof`significantinterests', `wrongfultransactions', and `balancing' revealsthe conceptofincrementalism to be internallycomplex. This complexity is where it is possible for a variety of views to be taken revealed with regard to the significancetobe attachedto a concept's constituentelements. Then wefind ourselves confronted with an essentially contested concept." The contested 1995 CanLIIDocs 174 character of incrementalism has been thrown into dramatic relief in the Anglo-Canadian negligence law with the emergence oftwo understandings of its significance: wide andnarrowincrementalism." Each ofthese understandings provides us with distinctive accounts of both the wrongful transaction and balancing components of the concept within incrementalism. The locus classicus of `wide incrementalism', the adjudicative stance favoured in Canadian negligence law, is Anns v. London Borough ofMerton"

111 take persons to have significant interests in those goods which conduce to their leadingautonomous lives. SeeJ. Raz, TheMorality ofFreedom (Oxford: Clarendon,1986) at 155, where (personal) autonomy is defined as substantial authorship ofone's life. 11 [19321 A.C. 562. '2 [198212 All. E.R. 298 (H.L.). 13 Supra footnote 3. 14 On negligence law's concern with the imposition ofliability for harm inflicted in the context of a wrongful transaction, see E. Weinrib, "Understanding Tort Law" (1989) 23 Valparaiso L.R. 485. '5 Fordiscussionoftheproblemof disruptionto the processing ofclaims whichcould be brought aboutby the specification ofliability rules which "ultimately lead to virtually limitlessliability", seeAlcockv. ChiefConstableofSouth West Yorkshire,[199113 W.L.R. 1057 at 1119, Lord Oliver. 11 For discussion of the nature of essentially contested concepts, see W.E. Gallie, "Essentially Contested Concepts", Proceedings ofthe Aristotelian Society (1955-1956). See also, S .L. Hurley, Natural Reasons: Personality and Polity (New York: Oxford University Press, 1989) at 46-50. "A distinction similar to the one drawn in this discussion between wide and narrow incrementalism can be found in Hall v. Herbert (1993), 101 D.L.R. (4th) 129 at 132, Sopinka J. (dissenting) . 'a [1978] A.C. 728 as followed in Nielsen v. Kamloops (City), [1984] 2 S.C.R. 2. 146 LA REVUE DU BARREAU CANADIEN [Vol.74

in which Lord Wilberforce, before setting out his two-stage duty of care test, stated that: "in orderto establishthatadutyofcarearisesinaparticular situation, it is not necessary to bring the facts of that situation within those of previous situations in which a duty of care has been held to exist."" In thereadiness toimpose a duty ofcarein circumstances not obviously like any in which a duty has previously been imposed, it can be seen that this is an approach to adjudication which exhibits a high degree of receptivity to novel claims. There are, however,doctrinal limitstowideincrementalism's receptivity to such claims and they are identified in the first limb of the two-stage test, according to which: [O]nehas to askwhether, as between the alleged wrongdoer and the person who has suffered damage there is a sufficient relationship ofproximity or neighbourhood such that, in the reasonable contemplation ofthe former, carelessness on his partmay be likely tocause damage tothe latter, in whichcase aprimafacie dutyofcarearises.' This limb of the two-stage test requires a plaintiff to establish not merely that harm was inflicted by the defendant, but that it was inflicted in the course ofa wrongful transaction: i.e., aform ofinteraction in which (i) the parties stood in such a "relationship of . .. neighbourhood" as to make harm of the type suffered reasonably foreseeable and in which (ii) lack ofreasonable care on the 1995 CanLIIDocs 174 defendant's part can be regarded as betraying a wrongful disregard for the plaintiff's significant interests. By comparison with wide incrementalism, narrow incrementalism, an adjudicative stance whichhas become popularinEngland inrecent years, is less receptive to novel claims. This point can be illustrated by reference to the Australian High Court's decision in Sutherland Shire Council v, Heyman" which attracted the House of Lords' approval in Caparo Industries plc v. Dickman22 In the Sutherlandcase, BrennanJ. gives expression tothe view that "[i]t is preferable ... that the law should develop novel categories of negligence incrementally and by analogy with established categories [of case]11 .23 On this view, ifajudge is to award compensation in a novel claim, she must be satisfied thatthere exists a tight analogy between the facts ofthe case at hand and a set of facts which are comprehended by an existing liability rule. The effect ofajudge's taking such an "intense view of the particular"24 will be that those plaintiffs who, even if harmed in a wrongful transaction, cannot draw a suitably striking analogy will go uncompensated. The insensitivity ofnarrow incrementalist adjudicators to the plight ofsuch plaintiffs is troubling in that it involves a failure to give effect to negligence's purpose which, I argue to be the

'1 Ibid. at 751-52 (emphasis added). ° Ibid. 2' (1985), 60 A.L.R. 1 . 22 [1990] 1 All. E.R. 568 at 573-574, Lord Bridge. 23 SutherlandShire Councilv. Heyman, suprafootnote 21 at43-44 (emphasis added). 24 This phrase comes from, Lord Goff, "The Search for Principle" (1983) 69 Proceedings of the British Academy 169 at 124. 19951 Commentaires d'arrêt 147

protection of significant interests in circumstances where harm has been perpetratedinthecontextofawrongful transaction.21 Narrowincrementalism's failure lies in not giving effect to the principle enunciated by Lord Macmillan in Donoghue v. Stevenson, that the categories ofnegligence are never closed 26 Turning now to the matter of balancing, the approach adopted by wide incrementalist adjudicators is summarised in the second limb of the Anns two-stage duty test which, in circumstances where the test's first limb has been satisfied and a prima facie duty has been established, specifies that ".. . it is necessary to consider whether there are any considerations which ought to negative, or to reduce or limit the scope of the duty or the class of persons to whom it is owed or the damages to which a breach may give rise"?7 Thefeatures ofthis approachtobalancing germanetothepresent discussion are, first, it is openly acknowledging the clash ofinterests at stake in a novel negligence claim and, secondly, it is proposing a widerange of ways to mediate thoseinterests, rangingfromthe denial ofa claim to, inter alia, limitationsbeing imposed upon aduty's scope orthe class ofpersons to whomit is owed. In these two respects, wide incrementalism differs significantly from narrow incrementalism, as can be illustrated by the narrow incrementalist authority of Caparo. Lord Bridge downplays the controversial character of the balancing 1995 CanLIIDocs 174 exercise by not addressing himself explicitly, in his three-stage test of duty of care, to the conflict of interests with which he is faced; rather he poses the anodyne-sounding question as to whether it would bejust, fair, and reasonable to impose a duty?$ As a consequence of his Lordship's indirection in this regard, he does not offer the kind ofguidance profferedby Lord Wilberforce as to how such interests might be mediated, and, in so doing does not render a decision which can always be assumed conclusive to a just resolution of such cases. Having elaborated the distinction between the wide and narrow forms of incrementalism, I will utilize to advance the claim that the speeches of the majority in Spring have one feature in common: viz, ambivalence concerning the matter of the negligence law's incremental development.

3. Ambivalent Adjudication : The Speeches In Spring Ambivalence is detectable in Lord Qioffs speech in Spring in that, while he disavows the expansive character of the House's decision by insisting that the facts of the plaintiff s claim are properly subsumable under the Hedley Byrne

zs CfAtiyah'sAccidents, Compensation andthe Law, 5thed., ed. by P. Cane (London: Butterworths, 1993), ch 18, where, inter alia, compensation, distribution of losses, allocation of risks, deterrence, and vindication are identified as purposes which can plausibly be ascribed to the law of negligence. 26 Supra footnote 11 at 619. s' Anns v. London Borough ofMerton, supra footnote 13 at 751-52. za Caparo Industries plc v. Dickman, supra footnote 22 at 573-574. 148 THECANADIAN BAR REVIEW [Vol.74

negligent misstatement principle'29 this claim is belied by his employing an incrementalist modus operandi whichis strongly reminiscentofAnns inthat he: (i) addresses himself to the question whether (primafacie) a duty is owed in tort,"' and (having answered this question in the affirmative) then - (ii) turns to the question whether such a duty should be negatived because it would, if recognised, pro tanto undermine the policy underlying the defence of qualified privilege in the law of defamation."' With respect to the first of the above two questions, Lord Goff first establishes that the plaintiff's interests are significant and, then, identifies them as having been harmed in the context of a wrongful transaction." With these two points in place, he moves on to the second of the above questions and balances the plaintiff's interests against the free speech interests served by the operation ofthequalifiedprivilege defence within therubric ofdefamationlaw, this balancing exercise yielding the conclusion that the plaintiff's claim should be supported." LordLowry's speechexhibits ambivalence in that he both (i) gestures inthe direction of a disavowal of the expansive character of the House's decision by lending his support to Lord Goff s subsumption of the facts in Spring under HedleyByrne," thus suggesting that the case can unproblematically be decided 1995 CanLIIDocs 174 in the plaintiff's favour and (ü) makes reference to the need to balance the conflicting interests with which he is confronted, observing (with Anns-like candour) that: "[t]o assess the validity of the [policy-based] argument [countervailingagainst the plaintiff's claim) entails not theresolution ofa point of law but a balancing of moral and practical arguments"." He, moreover, advances with respect to the balancing exercise the following obiter dictum: "[T)he courts in general and your Lordships' House in particular ought to think very carefully before resorting to public policy considerations which will defeat a claim that ex hypothesi is a perfectly good cause ofaction . .11 .36 Lord Lowry's view is significant not only because it evinces a strong commitment to pursuit of negligence's protective purpose but also because it brings into sharp focus an acute tension at the heartofincremental adjudication inboth its wide and narrow forms. This tension, to draw onthe lexicon ofmoral philosophy, arises from the intersection in the context of the adjudication of novel negligence claims of two kinds of argument: viz -

11 Spring v. Guardian Assurance plc, supra footnote 5 at 143. "o Ibid. at 144. 31 Ibid. at 149. 1 Ibid. at 146-147. 33 Ibid. at 149ff. 34 Ibid. at 152. 35 Ibid. 36 Ibid. at 153. 1995] Case Comments 149

(i)deontologicalarguments (concemedwiththe fntrinsicvalue ofactingjustly)l which are advanced by plaintiffs when they contend (drawing on the principle that justice requires the like treatment oflike cases)3a that their interests are as deserving of protection as those presently embraced by the law; and - (ii) consequentialistarguments(whichfocusuponthedesirabilityofnotembarking upon courses of action which can be expected to be productive of more cost than benefit)39 which are advanced by defendants when they seekto resist anovel claim by pointing towards the negative effects (e.g., `chilling effects') which can be expected to flow from a finding of liability. In his dictum, Lord Lowry does not merely alert us to this tension; he provides guidance as to how judges should respond to it by suggesting that plaintiffs' arguments fromjustice should be accorded a degree ofexclusionary force sufficient to preclude consideration of countervailing consequentialist arguments, unless those latter arguments can be shown to exhibit ahigh degree of cogency. This view marks a significant move in the direction of wide incrementalism and theAnns case, for as was disapprovingly observedby Lord Bridge in Curran v. Northern Ireland Co-Operative Society," Anns gives expression to the view that, in circumstances where a wrongful transactionhas occurred, a duty of care can legitimately be imposed unless there are "clear

countervailing considerations to exclude it"41 1995 CanLIIDocs 174 By contrastwith the speeches ofLordGoffandLordLowry, those ofLords Slynn andWoolfexhibitless ambivalence withrespectto the law's incremental development. Their relative straightforwardness arises both from the way in which theirauthors openly acknowledge thatadecisioninfavour ofthe plaintiff will involvethe making ofnew law4z and by the way they undertake the task of balancing. Their candour recalls the wide incrementalism of Anns - their openness in this latter regard stands, however, in an uneasy relationship with their giving approval to the three-partduty ofcaretest setoutin Caparo 43 which downplays the clash of interests with which the activity of balancing is concerned. While intimations of wide incrementalist adjudicative method can be detected in the speeches of the majority in Spring, itis only in the speech of the

31 SeeS. Blackburn, The OxfordDictionary ofPhilosophy (Oxford: OxfordUniversity Press, 1994) at 100, where it is noted that deontological ethics arebased on "the notion of duty, or whatis right, orrights, as opposed to ethicalsystems basedon theidea ofachieving some good state of affairs" . 98 See H.L.A. Hart, The Concept ofLaw (Oxford: Clarendon, 1961) at 155, where it is noted thattheleadingprecept ofjustice is "often formulated as '[t]neat like cases alike"'. 39 On consequentialism, see S. Blackburn, supra footnote 37 at 77-78. 1 [198712 All. E.12. 13. 41 Ibid. at 17 (emphasis added). 4s Spring v. GuardianAssuranceplc, supra footnote 5 at 159, Lord Slynn (" ... there is no authority of your Lordships' House directly in point .... [Hence,] it is open to your Lordships to decide the question as one ofprinciple"), and at 170, Lord Woolf(" ... their Lordships are being asked to make a measured extension to the ambit of the law of negligence ..."). 43 Ibid. at 159, Lord Slynn and at 169, Lord Woolf. 150 LA REVUE DU BARREAU CANADIEN [Vol.74

House's sole dissentient, Lord Keith, thatAnns is directly invoked - his using it constituting a remarkable volte face, bearing in mind the criticism to which he regularly subjected it both prior to and in the House's decision in Murphy v. Brentwood District Council.' As well as being surprising in the light of recent adjudicative history, Lord Keith's use ofAnns is, on a doctrinal level, both novel and disorientating . This is because, having articulated the view that the narrow incrementalist three-stage duty of care test set out in Caparo provides support for theplaintiff's claim,he thenpraysin aidthesecond limb oftheAnns testas a ground uponwhichtojustify adecisionagainsttheplaintiff.45 He noted in this connection that "the adverse consequences fromthe point of view of the public interest which wouldflow from [a finding in favourofliability] . .. inmy opinion militate strongly against it"46 As surprising as the doctrinal features ofLord Keith's speech is, its minority status may go some way towards explaining his use ofAnns. Could it be that, troubled by the swing in the direction of wide incrementalism discernible in the speeches ofthemajority, heuses Anns againstitselfin a last gasp assaulton the pro-recovery analyses with which he finds himself confronted? On the assumption thatitis correctto characterise the speechesofthemajority inSpring as constituting ambivalent steps in the direction ofwideincrementalism,

I will now make some remarks concerning the approach taken toward novel 1995 CanLIIDocs 174 negligence claims by the Supreme Court ofCanada -atribunal which Iregard as providing amodelfrom whichthe House ofLords, assuming thatitwishesto move further in the direction of wide incrementalism, could derive guidance.

4. Novel Negligence Claims in the Supreme Court of Canada: A View Through English Eyes

The Supreme Court of Canada's approach to the adjudication of novel negligence claims merits the House's attentionin that it can plausibly be regarded as constituting an operationalisation of what the American Realist legal theorist Karl Llewellyn termed the grand style - a style of adjudication which involvesjudges in (i) seeking to advance the law'spurpose(s)" (which, in the negligence context involves them in specifying liability rules protective of individuals' significant interests - those liability rules relating to sets of circumstances constitutive of wrongful transactions), while - (ii) paying due regard to and drawing guidancefrom existing authoritative legal materials4$ (in a manner consonant with pursuit of the ideal of the rule oflaw); and while -

44 See B . Markesinis and S. Deakin "The Random Element of their Lordships' Infallible Judgment: An Economic and Comparative Analysis of the Tort ofNegligence From Arms to Murphy" (1992) 55 M.L.R. 619 at 620, where Lord Keith is identified as having "led the [House's] attack on Anns". 45 Spring v. Guardian Assurance plc, supra footnote 5 at 135-136 . as Ibid. at 142. 4' See K. Llewellyn, Jurisprudence: Realism In Theory And Practice (Chicago: University ofChicago Press, 1962) at 217. 48 Ibid.

1995] Commentaires d'arrêt 151

(iii) exhibiting sensitivity to and readiness to accommodate (where cogent) the negative consequences which can be expected to occur ifa proposed liability ruleis specified.49 Inordertosupport the claimthatthe Canadian Supreme Courtcanbe regarded as deciding novel negligence claims in the grand style, I will make four points, the first threeofwhich concernits decisionin the case ofNielsen v. Kamloops (City)' -thedecision inwhichitembraced the approach toadjudicating novel negligence actions articulatedbyLordWilberforceinAnns si First, inadopting this adjudicative stance, the Supreme Court has been able to entertain novel negligence claims, notwithstanding their not bearing a striking similarity on the facts to existing categories of cases. Hence, it ha's been able to give effect to the law's protective purpose in a manner, unlike narrow incrementalism, which is consonant withthe principle thatthe categories ofnegligence are never closed. Secondly, in applying the first limb of the two-stage duty of care test set out in Anns, which requires a plaintiffto establish a sufficient relationship of proximity vis-à-vis the defendant, judges confronted with novel claims are required to satisfy themselves that harm canbe said tohavebeen sufferedinthekindofcontext (viz, awrongful transaction) specified by the relevant legal materials. It is only in circumstances where such

inquiries yield affirmative answers that judges can, to borrow a phrase from 1995 CanLIIDocs 174 Llewellyn, "[make] fresh starts from old materials"" by imposing a new rule of liability. In operating in this way, this limb ofthe test can be regarded as chiming withthepursuit oftheidealofthe rule oflaw. Thirdly, in applying the second limb ofAnns which poses, incircumstances whereplaintiffs havemetthe requirements ofthetest', sfirststage, the questionas to whetherthere areanyconsiderations which ought to negative or limit (a) the scope ofthe duty and (b) the class of persons to whom it is owed or (c) the damages to which a breach of it may give rise, ajudge faced with a novel negligence claim is prompted to engage in a survey of the negative effects which can be expected to flow from a finding in favour of the plaintiffand,in the light ofthis survey, to make an all-things-consideredjudgment as to how best to accommodate the conflicting interests with which he or she is confronted. This third point, taken together withthe second, illustrates, moreover, how misconceived is the view which hasgained considerable currency in England in recent years that the House's decision in Anns is "pure plaintiff's [sic] law" 53

a9 Ibid. See also, K. Llewellyn, The Common Law Tradition - Deciding Appeals (Boston, Toronto: Little, Brown, 1960) at 60. 10 [1984] 2 S.C.R. 2. s' Ibid. at 662-63, Wilson J. See also, J. Fleming, "Requiem For Anns" (1990) 106 L.Q.R. 525, where the observation is made (without elaboration) thatLord Wilberforce's speech in Anns is " ...a classic example ofthe 'grand style"'. sz Llewellyn, supra footnote 47 at 88. ss See T. Weir, "Government Liability" [1989] Public Law 40 at 51. See also the vehement attack on Anns set out by Lord Templeman in C.B.S. Songs Ltd. v. Amstrad ConsumerElectronicsplc, (1988] 2All. E.R. 484at 497: "[Anns] put thefloodgates on the jar, a fashionable plaintiff alleges negligence . The pleading assumes that we are all neighbours now, ... and that for every mischance in an accident-prone world someone solvent must be liable in damages" . 1.52 THECANADIAN BAR REVIEW [Vol.74

Turning now to my fourth point. It seems plausible to suggest that an adjudicative method which accommodates negligence's purpose ofprotecting plaintiffs' significant interests while seeking both to pursue the ideal of the rule of law and accommodating interests, which countervail against those of plaintiffs, can be regarded as ushering into existence of "good law": i.e., law which can be rationally and autonomously endorsed by all persons who are subject to it54 Assuming these four points are correct, the Supreme Court of Canada's adjudicative modus operandi can be seen to compare favourably with the adjudicative stance adopted by the House of Lords in Murphy v. Brentwood District Council - the decision in which, of course, the House repudiated the Anns two-stage test. This is because, while the House's decision in Murphy exhibits sensitivity to the ideal of the rule of law in the form of a "bright line" exclusionary rule against recovery for pure economic loss and to concerns which countervail against those of plaintiffs evidenced by its concern with the threat of indeterminate liability, its sensitivity to negligence law's protective purpose is attenuated. This attenuationbeing the result ofthe its adoption ofthe narrow incrementalist approach tonegligenceadjudication set outin Sutherland Shire Council which, in constituting a move away from the principle that the 1995 CanLIIDocs 174 categories ofnegligence areneverclosed, worksto truncate the law's protective scope. This claim can be supported by noting that, whilethe Canadian Supreme Court has, in recent years, taken steps to advance negligence's protective purposè in, inter alia, the areas of public authority liability," medical malpractice," and concurrent liability (sounding in both negligence and contract)" the House of Lords has not acted with the same vigour.5$ The attenuated sensitivity to the law's purposerevealed inMurphy is ofthe first importance to the present discussion. It has the effect of undercutting claims in the adjudicative method which informs that decision provides an adequate basis upon which to make "good law". This is because while Murphy-style adjudication does pay serious regard to the ideal ofthe ruleoflaw

11 See N. MacCormick, "The Concept of Law and 'The Concept of Law"' (1994) O.U.S. 1 at 17 and 21. See also, W. Twining, Karl Llewellyn and the Realist Movement (London, Weidenfeld andNicolson, 1973) at 256, where the grand style ofadjudication is identified as providing a promising basis upon which " ... to satisfy people's feelings as to what isjust ...". ss Kamloops (City) v. Nielsen, supra footnote 50. See also the helpful discussion in, Kripps et alv. ToucheRoss & Co. etal (1992), 94D .L.R. (4th) 284 at 291-292 (B .C.C.A.). s6 See Norberg v. Wynrib, [1992] 2 S.C.R. 318. s' See both BG Checo International Ltd v. British Columbia Hydro & Power Authority, [1993] 1 S.C.R. 12; Queen v. Cognos, [1993] 1 S.C.R. 87. ss But see the House's very recent decision in Henderson and others v. Merrett Syndicates Ltd. and others, [1994] 3 All. E.R. 506, where (in the context of a negligence actionbrought by Lloyds Names againsttheir allegedly incompetent agents) the view was taken that the existence of a contract, as between the parties to a proposed claim in tort, should not alwayspreclude themounting ofsuch an action. The concurrentliability issue is discussed at 523ff, LordGoff. Along withSpring, this latter decision can be interpreted as a move away from the adjudicative stance taken up by the House in Murphy. 1995] Case Comments 153

andthe significance ofinterests which countervail againstthoseofplaintiffs and does seek to advance negligence's purpose on a narrow incrementalist footing, it fails to secure the interests ofthat sub-set ofplaintiffs who suffer harm in the context ofa transaction which, while it is wrongful, is not strongly reminiscent of a fact situation presently comprehended by the law. Hence, it seems reasonable to suggest that such plaintiffs have good reason to withhold the title "good law" from the liability rules yielded by this approach to adjudication . In the light of this point, it becomes clearjust how important are the ambivalent steps taken by the Law Lords in Spring in the direction of the adjudicative position of the Supreme Court of Canada.

Conclusion

In Spring, we find the House of Lords poised ambivalently between the grand style of negligence adjudication employed in Canada and the adjudicative stance staked out in Murphy which, as we have seen, endorses the narrow approach to incrementalism articulated in the Sutherland case and, in so doing, fails to forwardnegligence's protective purpose. The House's presentposition brings to mind the question posed by that most ambivalent of characters, 1995 CanLIIDocs 174 Shakespeare's Hamlet: To be, or not to be -that is the question.59 Indeed. Tobe, ornotto be a grand styletribunal? Thatis surelythe question which, in the wake of Spring, confronts the House. Assuming the correctness of the argument that the grand style makes it possible forjudges adequately to pursue negligence's protective purpose while simultaneously making possible pursuit of the ideal ofthe rule oflaw and the accommodation of interests which countervail against those of plaintiffs in novel claims, it is to be hoped that the House overcomes its present ambivalence and resolves to give greatereffect to negligence's protective purpose, for as has been memorably observed: .... [T]he native hue of resolution Is sicklied o'er with the pale cast ofthought, And enterprises of great pitch and moment With this regard their currents turn awry And lose the name of action6°

"W. Shakespeare, Hamlet (London: Penguin, 1980), act III, scene I at 124. 60 Ibid. at 125.

154 LA REVUE DU BARREAU CANADIEN [Vol.74

Consumer Protection: MacKay v. Bank ofNova Scotia: Rushak v. Henneken .

S.M. Wexler*

Twenty five years ago, when the modern wave of consumer protection law was just getting started in Canada, Michael Trebilcock wrote an influential article called: "Consumer Protection in the Affluent Society".' By way of answering the question "Who is to be protected from what?", Trebilcock set out two theories of consumer protection. The first, based on a "state planned 'good-life"', required that the government determine what a prudent purchase was and then pass laws which made it impossible for consumers to make anything but prudent purchases. This approach would certainly have protected consumers, but it would have done so at the cost of giving them no choice about the kind of life they wanted to live. Trebilcock rejected it as totalitarian. Thesecond approach Trebilcockexplored wasforthe government to insure that consumers had sufficient information to make choices for themselves.1995 CanLIIDocs 174 Trebilcock said: "the consumer's right to information is the central philosophy governing reforms in this area,112 but he pointed to a number of deficiencies in the information approach to consumer protection. One is that commercial advertising does not present "information"; it attempts to persuade. Should government attempt to counter-persuade or should it limit vendors' rights to persuade? Neither of these solutions was acceptable to Trebilcock and he could not see any solution to this problem. AnotherdeficiencyTrebilcockpointedoutinthe information approach was that more information is not always helpful to consumers. Information can be presented in ways which confuse consumers or at least fail to enlighten them. Lists of chemicals on products might mean something to a chemist, but they do not tell the average consumer very much at all. Saying that one product cleans faster, while another cleans better, even if true, leaves the consumer in a quandary. How much faster? How much better? And how do you weigh faster cleaning against better cleaning? Finally, the law can require that certain informationmust be given before a valid contractis concluded, but much ofthis information "is presented to the consumer after, to his way of thinking, the bargain has been closed".' Consumers may only learn about "service fees" or other "extra charges" after they have made the emotional decision to buy. Information which comes at this point, though itsatisfiesthe law, does not really help the consumer. Trebilcock concluded that "in the typical consumer

* S.M. Wexler, ofthe Faculty ofLaw, University ofBritish Columbia, Vancouver, British Columbia. 1 (1970) 16 McGill L.J. 263. 2 ibid. at 276. 3 Ibid. at 291. 1995] Commentaires d'arrêt 155

transaction, it is impossible to devise ways ofconveying to aconsumer relevant information in a meaningful form." Trebilcock said that it was important to construct an "overall, long-term philosophy of consumer protection. .. . Without constructing a model of an ideal consumer-market, wehavenothing againstwhich to evaluate the worth ofexisting orproposed measures ..."Trebilcockhimselfdidnotconstructthisideal, andwhile he said it was necessary to construct one, his article actually suggested that it was impossible todoso. No subsequentattempt has beenmadeto constructanideal for consumer protection and for the most part, the law has simply followed the information approach. Given that twenty fiveyears agoTrebilcock concludedthat it was impossible to make the information approach work, it is no wonder, that at a recentconferenceoncommercial andconsumer law, theonlypanelonconsumer protection was entitled: "Is Canadian Consumer Law Dead?' If consumer protection law looks dead, it is not because anyone thinks consumers are safe in the market but because everyone thinks that given the information approach, the law has done almost as much as it can to protect consumers. Agreatnumber of statutes have beenpassed, atboth the federal and provincial level, requiring that information be disclosed to consumers. There might be a few small protections that could be added to the law, but basically, 1995 CanLIIDocs 174 consumer protection law has accomplished what it can accomplish from the information angle. If consumer protection law is to have any life, it must go past the information approach and the only way to go past that approach is to question the underlying assumption of consumer protection law. The law now assumes that it is both natural and inevitable for businesses to take advantage of their customers. We think thepurpose ofconsumer protection law is only to prohibit the most egregious forms of this. We do not say that businesses should never take advantage of their customers, and hence, we do not ask consumer protection law to strive for this goal. Asimple example ofthe attitude which says it is acceptable forbusinesses to take advantage of their customers, so long as they do not do it too egregiously, is the distinction the law draws between misrepresentation and "mere" puffery. The law prohibits misrepresentation, but it allows puffery.6We take it for granted that businesses will try to persuade consumers to buy by making slightly inflated claims about their wares, by using language that is emotionally appealing, by portraying their wares in the best possible light and minimizing or overlooking small flaws. This is inevitable we think. It is simply the way business is.

4 Ibid. at 295. s Jacob S. Ziegel, Is Canadian Consumer Law Dead?, (1995) 24 Can. Bus. L.J. 417. 6 (T]hecourtmust . . . determinewhetherwhat occurred was merepufferybya saleman orwhetherit contituted a deliberate act ofdeceptionwhich could vitiate the contract. W.W. Distributors & Co. Ltd. v. Thorsteinson etal. (1960), 26D.L.R. (2d) 365 at367 (Man. C.A.) per Freedman, J.A. 156 THECANADIAN BAR REVIEW (Vol.74

So prevalent is the ideathat businesses will mislead consumersthat the law has actually withdrawn from one early attempt to prevent it. The Canadian CompentionAcP prohibitsbusinesses ftommaking"Misleadingrepresentations." In 1971, R. v. Imperial Tobacco Products,$ held that since this statute was intended to protect "that vast multitude which includes the ignorant, the unthinking and the credulous, " the test for whether a representation was misleading was whether it had the capacity to mislead a credulous consumer. Since 1971, the courts have withdrawn from this standard. Now, the ordinary test for whether a representation is misleading is whether it would mislead an "average" consumer9 and in some cases, the courts have said that the test for whether a representation is misleading is whether it would mislead a "sophisticated" consumer. For example, a court has determined that it is not misleading to say: "Three dollar offer, coupon refund and recipes inside." on a 10kilogram bag offlour, which contained acoupon for $ .75 and a $2.25 refund, requiring three proofs of purchase. " The court said food shoppers should be "sophisticated in assessing ... coupons and refund offers."Io Another example of the attitude we have toward how businesses will treat consumers is the common practice ofpricing goods at $9.95 rather than $10.00.

You cannotsay a merchantis "lying"to consumers bypricing the goods at $9.951995 CanLIIDocs 174 or that consumers are being "misled" by theprice of$9.95. Aconsumer can see that thepriceis only a nickel under$10.00 andpresumably any consumer knows that the difference ofa nickel should not affect his or her decision about buying. Butconsumers do not actrationallyand businesses seek totake advantageofthis fact. The law says this is acceptable; indeed, it takes the practice for granted. The small print, so common in modern TV advertising, is another example of the same thing. TV ads prominently display cars and prices, then, in small, nearly invisible print, at the bottom of the screen, they say: "Not the model shown". In other words, you can't buy the car shown for the price shown with it. TV ads also feature an illustration of how much closer a new razor shaves, butcontain the smallprint: "Notto scale."The graphic images in the ads convey an impression which encourages consumers to buy, but is not quite true. One purpose served by the small print is to tell the truth, without undercutting the graphic image. Another purpose of the small print is to disclose information which the law requires advertisers to disclose, without making the information too prominent. Because advertisers want the graphicallymisleading images and do not want to draw consumers' attention to the facts which mustbe disclosed, they hide their disclaimers and disclosures as much as the law allows. The small print is an indication of the attitude the law takes toward business. It requires honesty, but not candour.

7 R.S.C. 1985 c. C-34, am. R.S.C. 1985 c. 19 (2nd Supp). 1 (1971),64 C.P.R. 3 at 5, affd (1971),3 C.P.R. (2d) 178 (Alta. C.A.). I SeeD.M.W. YoungandB.R. Fraser, Canadhan AdvertisingandMarketing Law,vol. 1 (Scarborough: Carswell, 1992) at 1-28-1-35. 11 R. v. Robin Hood Multifoods Ld (1981), 59 C.P.R. (2d) 57 at 59 (Ont. Co. Ct.). 1995] Case Comments 157

Trebilcock's analysis ofconsumer protection assumedthat therewereonly two choices forhow to structure consumer protection law: The law couldeither control the marketcompletely (which is totalitarian and denies the consumer as well as the vendor any freedom) or it could leave the market free and attempt to preventvendors from engaging in themost egregious forms ofcheating. Lost in this assumptionis thepossibilitythat businesses could be expectednottotake advantage of their customers at all: that businesses could be expected, notjust to be honest with consumers, but candid. Theideathatno business shouldevertake advantageofitscustomersis almost completely absent from consumer protection law; indeed, it is almost completely absent from our society as awhole. Business is business, we say, meaning that, in business, people will sometimes dothings whichthey themselves thinkitis wrong to do. Ifyou arein business, yousometimes have to dothings youthink are wrong. Business is business; you can't expect people in business to act like angels. ®f course, it is not exactly a matter ofacting like angels. There are certain situationsinwhich ourlawrequires peopleto putsomeone else'sinterests ahead oftheir own. Barents are theprime example ofthis. Lifeguards and firemen are expected to risk their lives to save the lives of others. Even in commercial matters, our law has the idea of afiduciary. Afiduciary is supposed to act in the 1995 CanLIIDocs 174 best interests of someone else, but the idea of a fiduciary is bluntedby the idea that business is business. Thus, a lawyer is required to act as a fiduciary to his or herclient, toput his or her client's interestsfirst. But suppose a lawyerknows that another lawyer has a great deal more experience with a particular-sort of problem and a clientcomes in with that sort ofproblem. Does anyone think the lawyer's duty to look out for the best interests ofhis or her client, requires the lawyer to suggest that the client hire the other lawyer? Or suppose a lawyer knows thatanother lawyer could handle the client's business as well as he or she can, andthat the other lawyercharges less. Would anyone suggestthatthe more expensive lawyer has a duty to tell his or her client about an equally competent but less expensive lawyer? I don't think so. Business is business after all, and ethics can only be taken so far before they put you out of business. The idea that it is natural and inevitable for businesses to seek to take advantage oftheir customers is part of a fundamental mistake in our society. It is part of the modern attitude which embeds all social relations in economic relations. Instead of seeing the market as part of our lives, we see our lives as partofthe market. Wethink ofeverything as acommodity. Ourlives are for sale as labour; our homes and our neighbourhoods are for sale as property; the airwe breath andthe waterwedrinkarefor sale as resources. Everythingcanbe bought and sold: nothing has any value that cannot be bought or sold.t1 We have turned " See G. Bolanyi, The Great Transformation (blew York: Octagon, 1975) and T. Ewen, Channels ofDesire (New York: McGraw-Hill, 1982) By buying and selling labour andland freely, themechanism ofthemarket was made to apply to them.... [T]here was a market price for the use of labour power, called wages, and a market price for the use of land, called rent. Labour and land were provided with markets of their own, similar to the commodities proper that were 158 LA REVUE DU BARREAU CANADIEN [Vol.74

buying and selling into the central activity in life, and because we picture the market as a jungle, we think of ourselves as living in a jungle. When we are selling, we seek to take advantage of buyers. When we are buying, we must always be alert not to be taken advantage of. We can never relax. The upper classes in Victorian Britain are not especially well known for their insight, but they were on to something very important when they said that being "in trade"was antithetic to being in society. The British upper classes saw that the mercantile mentality, which was then growing, denied the social mentality, which was then shrinking . The upper classes looked down on businessmen as crass and they were right: overall, Victorian businessmen were crass. They abused their workers and turned Britain into a Dickensian hell. Ofcourse, the society whichthe upperclasses valued somuchwas a society ofprivilege, and we owe agreat deal to the businessmen who were crass enough to challenge it. They brought an endto social privilege and gave ordinary people a chance to have far more in the way of material possessions. But they did not give us a good idea about life. The upper classes had a good idea about the way to live, but they would not extend it to other people. The businessmen who ousted them gave us a bad idea about how to live and extended it to everyone:

they made us all obsessed with consumption. 1995 CanLIIDocs 174 On another plane, the image we have of business, that it is willing to take advantage ofconsumers, is like the image we have of men, that they are willing to take advantage ofwomen. Neitherimageis exactly false. Indeed, bothimages are probably true. But they are neither natural nor inevitable. Feminism seeks not only to stop men from oppressing women, but to stop men and women from seeing men as inherently oppressive and women as inherently oppressed. The goal of consumer protection law must be, not only to stop businesses from taking advantage of consumers, but to stop businesses and consumers from seeing business as inherently seeking to take advantage of consumers . The way to protect consumers is by elevating our ideas about business. Ideas are self-fulfilling, particularly in law. Thepurpose oflaw is to imagine the world as better than itwould be ifthere were no law, and then to bring the world at least a little way toward what the lawhas imagined it to be. Ifwe see business as inevitably seeking to take advantage ofconsumers, business will inevitably seek to take advantageof consumers and no amount oflaw will be able to protect them. If we saw business as bending over backward not to take advantage of consumers, businesses would take less advantage ofconsumers. The law could then do a better job of protecting consumers, because there would be less to protect them from.

produced with their help. ... [L)abour is only another name for man, and the land for nature. The commodity fiction handed overthe fate of man and nature to the play of an automation running in its own grooves and governed by its own laws. G. Polanyi, Our Obsolete Market Mentality in Primitive Archaic and Modern Economics (New York: Anchor, 1968) at 62. 1995] Commentaires d'arrêt 159

Iam too muchacreature ofour society tolookwithout scepticism at the idea I am proposing. The idea that businesses should never try to take advantage of their customers seems absurdly idealistic to me. I take the same things for granted about business that everyone else in our society does. I assume that businesses will sometimestakeadvantage oftheircustomers. Butlam convinced that building consumer protection law on this assumption is basically wrong. Accepting that businesses will take advantage of their customers, and seeking to prohibit only the most egregious fortes of this, concedes defeat before the game has even begun. Ifthe law starts with this perspective, everything it does is bound to be a stopgap at best. You cannot make lambs safe in a lions' den.

The Right Approach Almost all of Canadian law takes the wrong approach to consumer protection. Almost allofCanadianlaw starts withan assumption that itis d1right for businesses to take advantage ofconsumers, so long as they do not do it too blatantly. There are a few Canadian statutes and cases, however, which seem to take theright approach, whichseem, withoutexpressly saying so, to assume that it is wrong for any business to take any advantage of any consumer, ever. Since I am, as Ihavesaid, a creature ofoursociety, I find these laws anddecisions very 1995 CanLIIDocs 174 troubling. They all go against ourideas about how business works. They all treat businesses in a way that seems harsh and unfair. Still, they seem to me to be examples ofthe rightapproach. I regard them (as Iregardpreferential treatment for women and disadvantaged minorities) as bitter pills which have to be swallowed till our society becomes healthy. They are the pay-back businesses must make for all the years of caveat emptor. The first example of the right approach is a very recent case: MacKay v. RankofNova Scotia.' Lz The plaintiff was a 57 year old woman with nobusiness experience. Her daughter, Shariann, and Shariann's common law spouse wanted to buy a larger trailer home so that the spouse's children by a former marriage could live with them. Shariann tried to borrow $20,000 from the defendant, the Bank of Nova Scotia, to finance the purchase ofthe new trailer. The bank refusedto make her the loan because itconsideredher and her spouse to bepoor creditrisks. He had declared bankruptcy 10 years earlier andthe bank considered himsuch abadrisk thatit refused to granthimeven a$250overdraft. She already owed the bank $15,000, which she had borrowed to buy a boat and the small trailer in which the couple lived. She was also $10,000 in debt on her credit cards. Shariann asked the bank's loan officer if there was any way she could get the money. He said thatif she had arelative, the relative could borrowit andlend itto her. Shariann turned to hermother, who agreedto help. The bank structured a loan for $45,000 against the security of Mrs. MacKay's condominium. Mrs. MacKaygave the $45,000 to Shariann, who used itto finance the new trailer and to pay offthe credit card debt and the loanto the bankon the oldtrailer. Shariann

12 [1994] ®.J. No. 2498 (Ont. Gen. Div.) (QL). 160 THE CANADIAN BAR REVIEW [Vol.74

andher spouse were supposedto make payments onthe loan, but after two years they filed for bankruptcy. When she found out that she was going to lose her home, Mrs. MacKay broughtactionto have the mortgage declared invalid . The bank counterclaimed for enforcement of the mortgage. Lederman J. held that the mortgage between Mrs. MacKay and the Bank of Nova Scotia was invalid because Mrs. MacKay had not had independent legal advice when she entered into the mortgage. He acknowledged that the bank had suggested to Mrs. MacKay that she get independentlegal advice and that shehad refused this suggestion. She had even signed a waiver of independent legal advice, but, Lederman J. said, the bank should not have acceptedMrs. MacKay's decision on this point. Thebankknew Mrs. MacKay was acting out of emotion. It knew she was taking out the loan only to help her daughter and that she herself would get no economic benefit fromit. It knew the condominium was her only asset and that the chances ofthe loan ever being repaid were very low. Plaintiffs counsel argued that a fiduciary duty existed between the Bank and the plaintiff which arose by reason of theBank's knowledge ofthe entire transaction and awareness ofthe degree ofvulnerability ofthe plaintiff. However, it appears here that

the Bank was proceeding in its normal business dealing with a customer in granting1995 CanLIIDocs 174 a loan. ... [The loan officer] gave no advice as to whether the ttansaction was prudent ftom her point of view.... He neither encouraged nor discouraged her from entering into the transaction . In fact, [he] refrained from so doing for the very reason that he did not want to cross theline so as to create afiduciary relationship . The Bankdid not wanttobeput intothe position where it wasmaking subjective evaluations forparents in advising them whether or not they should be financially assisting their children.13 Lederman J. concluded that the bank was not acting in a fiduciary capacity, but, "in some situations where a bank is declining to act as a fiduciary, it must insist that the borrower obtain independent legal advice; otherwise it must refuse the loan."14 The decision in MacKay goes a long way in the direction of saying that businesses should bend overbackward not to take advantage ofconsumers . We all know that consumers are not rational. We all know that they act out of emotion. Generally, the law does not say that it is improper for a business to engage in a transaction merely because it knows the customer is acting emotionally, but this casesays thatwhenabusiness knows a customeris making anunsound financial decision forpurely emotional reasons, it must refuseto do business withthat customer. Basically, the case says thatbusinesses have a duty to protect consumers from themselves. A bank ... cannotescape its responsibility by merely recommending independent legal advice in this situation . It must insist on it. If the customer refuses, the obtaining ofa waiverofindependent legal advice cannot ameliorate the circumstances .Theplaintiff should have been advised in no uncertain terms that ifshe did not obtain independent legal advice then the Bank would decline the loan."

II Ibid. atPara. 32. 14 1bid. at Para. 33. 15 Ibid. at Para. 39. 1995] Case Comments 161

The principle articulated in this case is very important: there are situations in which a legitimate business must refuse to deal with a paricular consumer, for the good of that customer. This principle is not entirely foreign to the law, for instance, stores selling cigarettes must refrain from selling them to minors. The law hasthis requirementbecause wethink cigarettes areno goodforminors, but we treat minors differently from other people. We don'tthinkcigarettes are good for anyone, but store are allowed to sell them to adults. Stores are allowed to sell cigarettes even though we know cigarette smokers are addicted to cigarettes and are not in control of their desire to purchase them. Generally, legitimate businesses are entitled to do business with anyone. They do not have to look out for the good of their customers or ask themselves any questions at all about their customers' emotional states. Customers are expected to look out for their own good. Ifthey cannot, either because they are addicted or because they are foolish, the law says it is too bad for them. One consequence of taking the other approach can seen in a well known tort case: Good-Wear Treaders Ltd. v. D & BFloldings.16 In that case, A supplied retreaded tires to B and warned B that the tires should not be used on the front wheels of a truck. Bdisregarded these warnings and therewas an accident in which Cwas injured. Aand Bwere both held liable 1995 CanLIIDocs 174 to C. B was liable because it disregarded the warning; A was liable because it knew that Bwas going to disregard the warning. In upholding the trial judge's finding of liability against A, the appellate court said: The appellant correctly says that the Judge's conclusion means that [A] should not have sold the tires to [B]. This does not mean, however, that as suggested by appellant's counsel, "such afinding constitutes a majordeparture from the authorities and places an impossible burden on retailers. " The finding mens not that a seller is liablefor damagesto thirdpartiesifthebuyerdisregards the seller's warning, butonly thathe may be so liable ifhe knows that the buyer will disregard his warning.11 In a sense, Good-Wear Treaders stands forthe same principle thatMacKay does. Both cases say that in certain situations a legitimate business must refuse to deal with a particular consumer. But, in Good-Wear Treaders, the seller of the tires was foundliable, not to the buyer who disregarded the warning, but to a third party, an innocent user of the highway. The buyer in Good-Wear Treaders tried to claim againstthe seller, butthe court foundthat, asregards the buyer, the seller had done all that was required of it when it warned the buyer not to use the tires on the front wheels. For Good-Wear Treaders to have taken what I have called the right approachto consumerprotection, itwouldhavehadtoholdthatasellerbreaches a duty to a buyer when it sells the buyer a product knowing the buyer will disregard its warnings about how to use the product.. The court in Good-Wear Treaders was not preparedto change the law on warnings this much. Businesses are allowed to sell products with warnings, even when they know that a

"(l979), 31 l'+T.S.R. 380 (S.C.A.D.). 17 Ibid. at 96. 162 LA REVUE DU BARREAU CANADIEN [Vol.74

particular consumer will not heed those warnings. Not heeding the warning is taken to be the buyer's own fault. Businesses are not generally given the responsibility ofprotecting customers from their own folly. This is seen as an "impossible burden". Whatis so striking aboutMacKay is thatit gives the bank precisely this burden. MacKay runs so directly counter to the underlying presuppositions of Canadian law that it was considered newsworthy enough to be reported on the front page ofthe Globe andMail. 1& But perhaps the case should not be seen as newsworthy; perhaps it should be seen as merely a matter of human interest. One way to minimize the effect ofMacKay is to treat it as a case of pure equity. Lederman J. may have viewed the bank's position with disfavour because, knowing the daughter was abad credit risk, the bankhad structured the loan for $45,000, rather than $20,000, thereby making certain that it's prior loan to the daughter would be paid off. Because the $45,000 loan was secured by a mortgage against the mother's condominium, the bank, while lending more money, was actually bettering its own position by increasing the value of its security. The effect ofMacKay can also be minimized by treating it as an "old lady case," a case in which the court simply refused to apply the law because the 1995 CanLIIDocs 174 plaintiff was so weak. Lederman J. does stress the age of the plaintiff, the fact that she knew nothing about business and thatthe loan was taken by a parent to help a child. He says: "Parents are particularly susceptible to influence in their desire to help their children."" But even if MacKay is limited to old, inexperienced parents, it still covers a lot of ground and the principle it enunciates, namely, that there are situations in which a business must protect a consumer from his or her own folly, was applied in Rushak v. Hennekn2° to a consumer who was not old, inexperienced or a parent. This case involved the sale of a used Mercedes, which the trial judge said was "of such peerless beauty that ... she appears to have cast an hypnotic spell on all who had dealings with her."2I This Mercedes had an undercoating which had been applied sometime after the car left the factory. Mr. Henneken, the owner of the used car dealership selling the Mercedes, knew the car had been driven in Alpine Germany where rust is a problem and that an undercoating applied after the car left the factory might not prevent rust but only conceal it. A salesman at the dealership and the independent mechanic to whom Ms. Rushak took the car both suggested that Ms. Rushak have the car inspected for rust at a Mercedes Benz dealer, but she refused this advice. She and a friend examined the car themselves and Ms. Rushak decided to buy it.

's R. Platiel "Court Nullifies Woman's Mortgage: Bank Did Not Require Lawyer" (9 November 1994) Al. 'v Op. cit. supra footnote 12 at Para 34. 2° (1991), 59 B.C.L.R. (2d) 250 (C.A.). 21 Ibid. at 252. 19951 Commentaires d'arrêt 163

After buying the car, Ms. Rushak found that she could not drive it because of the stick shift. She, therefore, put it up on blocks for a year. At the end of the year, it was discovered that the body of the car was rusting away. Ms. Rushak sued Mr. Henneken under the B.C. Trade Practice Act.22 The trial judge found forMs. Rushakon the grounds that the Trade Practice Act contained a "duty of candour." He quoted from the opinion in Findlay v. Couldwell 23 "a supplier who makes his livelihood out of supplying personal property to consumers, owes a positive duty ofcandour to the consumer and that duty embraces telling the consumer any material fact known to the supplier about the ware.... " In this case, the trialjudge said: "[t]he statutory duty ofcandourrequiredhimtotellher that underneath that shampooedundercoating there was alikelihood ofrust; that ifthere was its scope and extentwas unknownto him and she must take the risk of it."24 The Court of Appeal affirmed, but on a slightly different ground. Mr. üenneken had told Ms. Rushak that the car was "a good vehicle," "one of the best ofits kindin Vancouver" and "a very nice car." This opinion was foundby the trial judge to be an honest one; in other words, it was found that Mr. Henneken had not lied to Ms. Rushak. But the Court of Appeal said that Mr. Henneken's commendation ofthe car, amounted to a representation which had 1995 CanLIIDocs 174 "the capability, tendency or effect of misleading"25 Ms. Rushak. While itused to be said that what is described in general terms as "puffery" on the part ofa salesman does not giverise to legal consequences, I am not satisfied that the same can necessarily be said today in light ofthe provisions oftheTrade PractceAct. "Puffery" cannot, in my view, excuse the giving of an unqualified opinion as to qualitywhenthe supplier had factual knowledgeindicatingthat the opinion may inan important respect very well be wrong. Exaggeration or embellishment of qualities which a seller knows to eist may, perhaps, be excused as puffery, and particularly where the potential buyer is in an as good aposition as the supplierto form anopinion on the matter. That expression cannot, however, 90 far as the Act is concemed, be used to excuse a laudatory description given with specific factual knowledge not shared by the potential buyer which suggests the goods may, in fact, be in an important respect defective.... 26 The fact that Ms. Rushak was advised to have the car inspected for rust was discountedbyboth thetrial court and the Court ofAppeal. Mr. Henneken's duty of candour was heldto require more than the giving ofawarning. The trial court felt itrequired afull disclosureofthe facts; the CourtofAppealfelt it prohibited the making of laudatory comments about the car. In either case, Rushak v. Henneken goes a long way toward saying that a person in business has a duty to look after a consumer.

22 R.S.B.C. 1979, c. 406. 23 [1976] 5 W.W.R. 340 at 345 (B.C.S.C.). 24 Op. Cit. supra footnote 20 at 256. 25 Op. Cit. supra footnote 22, 9. 3(1) (b). 11 Op. cit. supra footnote 20 at 259. 164 THE CANADIAN BAR REVIEW [Vol.74

Both the trial court and the court of appeal found this duty in the Trade Prachce Act and this statute does reflect a good deal of what I have called the right approachto consumerprotection. For instance, s. 4(2) lists asfactorswhich a court shall consider in determining whether a consumer transaction is unconscionable : (c) that at the time the consumer transaction was entered, the price grossly exceeded the price at which similar subjects of similar consumer transactions were readily obtainable by like consumers: and (d) that at the time the consumer transaction was entered, there was no reasonable probability offull payment of the price by the consumer. Both of these provisions extend beyond the common law on unconscionability, whichis essentiallyreproducedin s. 4(2)(a) (unduepressure) and (b) (unequal bargaining power). Saying thatit isunconscionable for a seller to charge way more than what other sellers are charging and that it is unconscionable for a seller to give credit in circumstances where the seller knows the buyer will not be able to make payment put the seller in the position of having to look out for the buyer. But notice that even this very far-reaching

statute does not go so far as to say that it is unconscionable to sell people things 1995 CanLIIDocs 174 they do not need. The right of businesses to sell consumers things they do not need is basic to our economy. One final example of a case which takes the right approach to consumer protection is Buchan v. Ortho Pharmaceutlcals (Can) Ltd.27 This case deals with a woman who had a stroke because she was taking Ortho-Novum birth control pills. It is an established fact that the taking of these pills will cause a certain number ofwomen to have strokes, and Ortho defended the action on the ground that it had warnedthe woman and her doctor ofthis danger. The Ontario Court of Appeal upheld a trial judgment fording Ortho liable because the warning which had been given to women and doctors in Canada was far weaker than the warning which had been given at the same time to women and doctors in the United States. There is a sense in which the liability ofOrtho was obvious: the difference between the warnings in Canada and the warnings in the U.S. made it easy for the court to find that Ortho was not treating Canadian consumers properly. But Ortbo raised two defenses that are troubling. First, it argued that the warning it had given Canadian women had been written not by Ortho, but by a panel of doctors appointed by the Canadian food and drug authorities. Ortho said it had given Canadian women precisely the warning that the Canadian govermnent had directed it to give. Second, Ortho pointed out that, despite the stronger warning issued in the United States, millions of American women took Ortho- Novum birth controlpills and thatMs . Buchan mighthave taken Ortho- Novum even if she had been given a stronger warning. In other words, Ortho argued,

'(1986), 54 O.R. (2d) 92 (C.A.).

19951 Case Comments 165

there was no way to establish that its failure to give Ms. Buchan a stronger warning had caused her to take the pills. The first argument requires us to consider the relationship between government and business. Government regulations are often just a minimum. Conforming to them does not necessarily mean that a business has done allthat it should have done to protect consumers. Ortho knew that the warning it gave in the U.S. was stronger. If it were really looking out for it's Canadian consumers, it would have wanted to give them the stronger warning too. utthe samething istriteforthe Canadian government. Itmusthave known (or at least it should have known) about theU.S. warning. Why did it prepare a weakerwarning? Perhaps the doctors appointed by the Canadian government decided that the stronger warning would unduly alarm women and that the weaker warning was strong enough. Even if we assume that Ortho wanted to giveCanadianwomen the strongerwarning, itis surely a lot to ask of a business that, to protect the interests ofconsumers, it should go against the wishes of the government. Anyone who has dealt with bureaucracies knows that the safest way to deal with them is to do exactly what they require you to do: no more and no less. Doing more than the bureaucracy requires can cause as many problems 1995 CanLIIDocs 174 as doing less than it requires. It is a lot to expect a drug company, which must deal with the bureaucracy all the time, totake therisk of doing something other than exactly what was required. The trial judge in Fuchan did not accept this argument. He took the view that the common law duty to warn consumers was not coextensive with the statutory duty under the Food and Drugs Act." The Ontario Court of Appeal took adifferent tack. It saidthat for the sake of argumentit would accept Ortho's position on the warning given directly to the women who took Ortho's birth control pills, but then, it upheld Ortho's liability on the ground that the warning Ortho had given to Canadian doctors was not as strong as the warning it had given to American doctors.29 Once again, the fact that there was adifference between the warning Ortho gave Canadian doctors and the warning it gave American doctors made Ortho look very bad, butOrtho had a strong legal argumentonthis point as well. Ortho argued that the adequacy of its warning to doctors was irrelevant. The standard law is that it is not necessary to warn someone of a danger ofwhich they are or ought to be aware, and Ortho pointed out that Canadian doctors ought to have been aware of the risk that birth control pills might cause strokes because the Canadian government had itself sent Canadian doctors a very strong warning about that risk. The appellate court in Euchan brushed this fact aside stating that "[t]he manufacturer's duty to warn continues notwithstanding that the information may be otherwise available."3o

ze R.S.C. 1970, c. F-27; op. cit. supra footnote 27 at 106. 29 Op. cit. supra footnote 27 at 107. 11 Ibid. at 114.

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The court quoted Linden J. as saying, " [a] drug company cannotrely upon the doctors to read all the scientific literature outlining the specific dangers involved in the many drugs they have to administer each day." 3I Withrespect, birthcontrolpillsmustbeoneofthemostcommonmedications doctors prescribe and doctors would not have had to read "all the scientific literature" to find the warning about the danger of strokes. All a doctor would have had to read was the warning issued by the food and drug authorities. It seems to me that it is reasonable to expect doctors to read warnings issued by the food and drug authorities. The court also decided against Ortho's argument that the weaker warning may not have caused Ms. Buchan to take Ortho-Novum. It did this in two ways. First, it said: Once the breach ofduty to warn prescribing physicians has been established, I think it is fair and reasonable to presume that the inadequacy of the warning was a contributing cause ofthe ingestion of the drug. 32 Then, having presumed one aspect of causation, the court in Buchan refused to follow the Supreme Court of Canada on another. 1995 CanLIIDocs 174 33 In Reibl v . Hughes, the Supreme Court of Canada said that whether a failure to warn could be said to have caused an injury was to be decided objectively : that is, thecourt was supposedto ask itselfwhat would areasonable person have done ifa proper warning had been given. In Buchan, the court said: "the Reibl testis inappropriate to products liability cases. "34 The trialjudgehad accepted Ms. Buchan's testimony that she would not have taken Ortho-Novum birth controlpills if she had been adequately warned ofthe risk ofstroke and the Court of Appeal sustained this finding. Whether a so-called reasonable woman in the plaintiff's position would have done likewiseis beside the point... . So long as the court is satisfied that the plaintiff would not have used the drug if properly informed of the risks, this causation issue should be concluded in her favour regardless of what other women might have done. 35

In Buchan, the court ignored the fact that the warning Ms. Buchanreceived had been written by the Canadian government; it ignored the fact that Ms. Buchan's doctor had been given a warning by the Canadian government; it presumed that the inadequacy of the warning contributed to Ms. Buchan's taking the drug; and, despite what the Supreme Court had said, it accepted Ms. Buchan's word on what she would have done if she had been given a stronger warning. In other words, the court overrode a good deal oflaw to find liability. It defended this decision, at least as far as the final point is concerned, in

3' Ibid. 32 Op. Cit. supra footnote 27 at 116. 33 (198012 S .C.K. 880. 34 Op. cit. supra footnote 27 at 119. 31 Ibid. at 121 . 19951 Commentaires d'arrêt 167

language that makes Buchan the leading authority for the right approach to consumer protection.

The suggestion that the detelmination of this causation issue other than by way ofan objective test would place an undue burden on drug manufacturers is answered by noting that drug manufacturers are in a position to escape all liability by the simple expedientofproviding a clearandforthright warningofthedangers inherentintheuse of their products of which they know or ought to know. In my opinion it is sound in principle and in policy to adopt an approach which facilitates meaningfill consumer choice and promotes market-place honesty by encouraging full disclosure. This is preferable to invoking evidentiary burdens that serve to exonerate negligent manufacturers as well as manufacturers who would rather risk liability than provide information which might prejudicially affect their volume ofsales36 Some of the language in this statement harks back to the provision- of- information approach, but I don't think the court was simply saying that businesses must provide information to consumers. I think what the court was saying is that businesses must bend over backwards not to take any advantage of their customers. Businesses must put the interests oftheir customers ahead of their own interest in sales volume. This is the right approach to consumer

protection. 1995 CanLIIDocs 174