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									 B L A K E S      M E A N S       B U S I N E S S


       THURSDAY, FEBRUARY 17, 2005

                             Thursday, February 17, 2005

1.    Agenda

2.    Search Warrants
      Paul Schabas

3.    Internal Investigations
      Glenn Leslie

4.    Computer-Based Forensic Investigations
      William Horton

5.    Co-operation with Others Under Investigation
      Ben Jetten

6.    Dealing with the Regulator
      Jeff Galway

7.    Some Insurance Considerations
      Mary Jane Stitt

8.    Blakes Litigation Group Profile

9.    Presenters’ Profiles

10.   About Blakes


8:00 - 8:30 a.m.    Breakfast

8:30 - 8:35 a.m.    Welcome and Introductory Remarks
                    Jeff Galway, Moderator

8:35 - 8:50 a.m.    Search Warrants
                    Paul Schabas

8:50 - 9:05 a.m.    Internal Investigations
                    Glenn Leslie

9:05 - 9:20 a.m.    Computer-Based Forensic Investigations
                    William Horton

9:20 - 9:35 a.m.    Co-operation with Others Under Investigation
                    Ben Jetten

9:35 - 9:50 a.m.    Dealing with the Regulator
                    Jeff Galway

9:50 - 10:05 a.m.   Some Insurance Considerations
                    Mary Jane Stitt

10:05               Q&A




• Variety of government investigative
  –   search warrants
  –   assistance orders
  –   inspection powers
  –   production orders
  –   examinations under oath
  –   “informal” examinations
  –   asking questions


• Regulated industries/regulatory statutes
  – non-criminal
  – compliance-oriented
  – broad powers of production, inspection,

• Criminal investigations
  – warrants
  – assistance orders


• Most non-criminal/compliance-oriented

• Environmental

• Business Practices

• Securities (?)
• Competition (?)

• Income Tax (?)


• Criminal Code offences

• Penal liability - loss of liberty
   –   e.g. Tax Evasion

• Can include:
   – Income Tax
   – Competition
   – Securities


• Ask?
• Jarvis [2002] 3 S.C.R. 757

• Income tax
• When an audit becomes an investigation
• “Where the predominant purpose of a
  particular inquiry is the determination of
  penal liability”

WHEN DO YOU KNOW?                  (Cont’d)

• Must then respect rights under ss.7 and 8
  of Charter
• s.7 - individuals - right against self-

• s.8 - right to be protected from
  unreasonable search and seizure


• Ask for the warrant, or other

• Be polite; do not obstruct

• Call counsel!
• Try to get them to wait


• Get your own copy of the warrant
• Who can search?

• What can they search for?
  – Types of records (paper/computer)
  – Subject matter
  – Time frame/date range

• Monitor search to keep it within
  terms/limits of warrant

• But do not obstruct


• Assistance Orders can place specific
  obligations on you
  – computer access
  – finding/producing specific records

• Otherwise, co-operation should be limited
  to directing them to relevant areas (if you
  do not want them going everywhere - they
  may anyway)

DO I HAVE TO HELP?                 (Cont’d)

• Do not consent to going beyond terms of
  the warrant

• Do not give interviews/explanations, and
  instruct employees not to speak to officers


• Have one liaison/contact person during

• Monitor the search

• Try to keep a record/copy of all documents
• Object (politely) if they are looking at or
  taking things outside terms of warrant

WHAT ELSE CAN I DO?                (Cont’d)

• Object (less politely) if looking at or taking
  documents where there may be a claim of
  solicitor-client privilege

• Ask to immediately seal privileged
  documents, or documents beyond scope of
  warrant, or other confidentiality claims
• Get the Information to Obtain (if not
• Consider Court Challenge/Interim Relief




• Protecting confidentiality of the
  investigative file

• To avoid creating the basis for civil or
  criminal liability

• Counsel must be actively involved from the
  outset in structuring the investigation to
  take advantage of solicitor-client or work
  product (litigation) privilege


• Characteristics
  – Confidential communications between a
    lawyer and client for the purpose of
    providing legal advice
  – A corporation is entitled to the same
    protection of confidentiality as an
    individual client
  – Communication with in-house as well as
    outside counsel may be privileged but role
    needs to be clearly defined as providing
    legal advice


• Characteristics      (Cont’d)
  – Privilege can extend to confidential
    communication with any corporate
    employee or agent concerned with the
    matter for which legal advice is required
  – Privilege can also extend to communication
    with lawyer’s agents if the lawyer is actively
    directing and supervising the work and is
    employing the agent to facilitate provision
    of legal advice


• Waiver
  – Privileged communication disclosed to third
  – If information shared for purposes of joint
    or common defence then privilege is not
    generally waived
  – Disclosure to government agencies may
    result in waiver unless disclosure is the
    result of legal compulsion


• Waiver        (Cont’d)
  – Disclosure in context of “settlement”
    negotiations may preserve privilege
  – Asserting a claim or defence that puts
    otherwise privileged communication in issue
    waives privilege over those communications


• Material prepared in anticipation of litigation
• Applies to criminal or regulatory
  prosecutions as well as civil litigation
• Material must be prepared at counsel’s
  request, but non-lawyers can prepare
  protected work product
• Disclosure to government agency may not
  destroy privilege in relation to other


• Lawyers should make clear that client is
  the corporation and should not give legal
  advice to individuals other than to advise
  the corporation

• Lawyer may have obligation to report
  misconduct pursuant to Rules of
  Professional Conduct (Rule 2) or statute


• Criminal Code s. 139
  – Conduct that is an attempt to impede an
  – Can apply to investigation by regulatory or
    disciplinary authority as well as criminal
  – Steps to destroy or conceal evidence as well
    as providing false or incomplete evidence
    are unlawful
  – There is no obligation to assist authorities in
    an investigation



     (whether criminal, regulatory or
    through discovery in a civil action)
       are about the search for the

   Executive Summary of World Religions:

        “You shall know the truth
     and the truth shall make you free.”


Documents are the heart of every case
• Viewed as an objective record
• Memories are unreliable and subjective
• Best evidence is admissions and damaging
  statements made by the other side in their
  own documents


Internal communications are the most
probative written, especially when they were
made without the expectation that they
would be read by an opponent.


Electronic communications are a bonanza
• Continuous and multilateral nature of
  communication creates a multidimensional
  context (Hologram vs a Photograph)
• Ease and increasing reliance on e-communication
  creates a stream of consciousness record (Movie
  vs a Photo Album)
• Speed and informality creates truly unguarded
  communication (Candid Camera vs Family Video)


Bonanza has gotten even bigger with
  proliferation of Palm Pilots, Blackberries,
  cell phones and other handheld devices
• Users expectations of privacy are even greater
  therefore communications even more
• New types of data become readily available,
  e.g., phone logs


One key benefit of computer-based

Hard, especially for amateurs, to hide or tamper
with records without leaving a trail.


• Multiple copies reside on multiple computers
• Files are not deleted when user thinks they
• Files are often archived in ways the user is not
  aware of
• Computer creates logs of activity such as the
  deletion and copying of data etc.


Meta data: information about the
information stored on the computer

Electronic records can be more reliable
because meta data on the computer allows
validation of information as to time and


Bonanza comes at a high price
• Huge volume of data to be dealt with (almost
  a universe of data)
• Need specialized equipment and personnel
• Need search strategy
• Never fully know what’s in there
• Sauce for the goose


Special problems dealing with computerized
• Difficult to make full disclosure in urgent
  situations (e.g., ex parte injunction
  applications because of sheer volume of
  material to be reviewed)
• Difficult to separate out relevant information
  from irrelevant information when making


Special problems dealing with computerized
• Particular concerns re personal or customer
• Problems with chain of custody and loss of
  data based on improper handling


Obligations re production of computerized
• Need to preserve and produce helpful records
• Need to avoid evidentiary prejudice or possible
  tort liability (“spoliation”) by non-preservation
  of records
• Problem of automatic deletion


Problem: production obligations can be
totally disproportionate to amount in issue

Easier if both sides take a reasonable
approach but . . .
not always possible in true “investigations”


In a serious case
• Strategy for dealing with computer based
  records is essential
• Need support from experts with state of the
  art technology
• Ensure that other side is doing the same thing
• If necessary, offer the other side facilities to
  capture their computer based data


If there is any concern about the other side
destroying or concealing computer based
data, consider seeking a civil search warrant
that orders the other side to submit their
computer hard drives to court appointed
experts who will preserve the evidence.




• Commonality of Interests
  – mutual goals
  – same factual underpinnings
    (e.g., identity of witnesses and documents)
  – corporate inter-relationships
  – level of exposure


• Determine potential parties
  – international corporate parents and
  – other corporate targets
  – named executives
  – former executives


• Consider potential benefits
  – establish a unified front
  – develop a global view of the issues
  – pool information
  – prepare unified defence or gain a degree of
    control over a proceeding
  – assess relative individual exposure


• Consider Potential Disadvantages
  – danger of disclosure to adverse parties
  – possibility of one or more parties seeking
    immunity or other divergence of interests
  – danger of actual or deemed waiver of
  – future disqualification of counsel


• The law recognizes a "common interest
  privilege" which protects against a "waiver"
  of privilege in a case where documents and
  other information are shared between
  persons having a common interest in the

COMMON INTEREST PRIVILEGE                (Cont’d)

• The principle applies where parties with a
  common interest in anticipated litigation
  exchange facts, advice or other
  information regarding litigation or an
  investigation which may lead to legal
  proceedings of some kind
• In other words, there will be a common
  interest where parties anticipate litigation
  or share a united front against a common
  adversary on the same issue

COMMON INTEREST PRIVILEGE                (Cont’d)

• As between the parties, communications
  are not privileged

• Key is to protect the confidentiality of the
  communications in the hands of each as
  against the outside world (i.e., against
  regulators or government investigators or

COMMON INTEREST PRIVILEGE               (Cont’d)

• Privilege needs to be maintained over the
  common interests

• Canadian Courts may uphold the privilege
  as part of either
  – litigation privilege; or
  – solicitor-client privilege


• There must be a mutuality of interests but
  not necessarily identical interests

• The possibility that parties might at some
  future point become adverse in interest is
  insufficient to deny the existence of a
  present common interest


• Some case law supports the proposition
  that common interest privilege can apply
  outside of the litigation context to the
  sharing of legal opinions or advice in the
  context of an earlier commercial
  transaction (e.g., the CC & L case and the
  Pitney Bowes case)

• It depends on the intention of all parties in
  sharing the information including the
  intention of confidentiality


• There is some case authority to support
  the proposition that where there is
  common interest privilege, all parties must
  concur in waiving the privilege
  – (Almecon v. Anchortek)


• Case law dealing with "common interest"
  – General Accident Insurance Company v. Chrusz
    (1999), 45 O.R. (3d) 321 (C.A.)
  – Buttes Gas and Oil Co. v. Hammer (No. 3)
    [1980] 3 All E.R. 475 (C.A.)
  – Almecon Industries Ltd. V. Anchortek Ltd.,
    [1999] 1 F.C. 507 (T.D.)
  – CC & L Dedicated Enterprise Fund (Trustee of)
    v. Fisherman [2001] O.J. No. 637 (S.C.J.)
  – Pitney Bowes of Canada Ltd. v. Canada, [2003]
    F.C.J. No. 311 (T.D.)


• A written confidentiality and joint defence

• Assists in protecting the common interest
  privilege by regulating and co-ordinating a
  joint defence and the use of information
  and documents


• Description of the common effort for which
  a JDA will be used (governmental
  investigation, regulatory submission,
  litigation, etc.)

• General statement regarding the nature of
  co-operation (covering verbal and written
  communications) or specific enumeration
  of the types of co-operation

CO-OPERATION       (Cont’d)

• Exchange of documents
  – including corporate business, technical and
    financial documents; transcripts; notes; legal
    memoranda, etc.
• Sharing of knowledge
  – including factual information pre-dating the
    proceedings; information gathered during
    internal investigations and interviews; legal
    analyses and strategy discussions; briefing and
    de-briefing conversations; other intelligence;
    substance of discussions with the regulator etc.

CO-OPERATION       (Cont’d)

• Co-ordination of activities
  – including joint interviews, joint analysis of
    issues and advising of clients; co-ordinated
    communications with government officials, etc.

CO-OPERATION       (Cont’d)

• Reservation of rights
  – materials and/or communications are
    confidential and are intended to remain
  – all applicable privileges and immunities
    continue to apply, including
     • solicitor-client and litigation privileges, and
       common interest and solicitor-client work-
       product doctrines
  – parties are under no obligation to share


• Limitation on use
  – only in connection with the proceedings at issue

• Limitation on the persons to whom information
  may be released
  – parties (or a subset)
  – in-house counsel
  – outside counsel (including associates, staff and
    other employees; additional and/or substitute
  – experts, economists, consultants

INFORMATION       (Cont’d)

• Procedure
  – documents subject to the JDA will be
    marked (e.g., "PRIVILEGED AND
  – documents designated as "for solicitors'
    eyes only" will not be disclosed to counsels'
  – confidentiality will be maintained and
    documents will not be disclosed without
    prior consent of the producing party


• Disclosure by Consent
  – only as specified and agreed to by
    producing party


• Disclosure pursuant to legal process
  – Where a party is served with legal process
    calling for production of any document or
    requiring it to divulge information subject to
    the JDA, the party must
     • immediately inform the other parties and
       provide copies of the subpoena or process;
     • assert solicitor-client privilege, litigation
       privilege and any other applicable privilege


• Unauthorized Disclosure
  – In addition to all other remedies, non-
    breaching parties may seek specific
    performance, injunctive relief or other
    equitable remedy


• Withdrawal/Conclusion of Proceedings
  – all documents are to be returned or
    destroyed at the conclusion of the
    • certify that all materials have been returned
  – confidentiality obligations continue
    notwithstanding conclusion of the


• Separate Representation
  – each party is separately represented by
    counsel and is free to pursue any course of
    action in its best interest, even if adverse to
    the interests of the other parties
  – agreement does not create any solicitor-
    client relationship between a party and
    counsel to another signatory

ADDITIONAL TERMS                    (Cont’d)

• No obstruction
  – agreement is not intended to impede or
    obstruct a government investigation
• No disqualification of Counsel
  – All parties waive any right to claim a conflict
    of interest or to disqualify counsel that
    receives confidential information under the


• Signatories to the agreement
  – clients and counsel

KEY PROVISIONS — EXECUTION               (Cont’d)

• Counsel certify
  – that they are authorized to enter into the
    agreement on their own behalf and on
    behalf of their clients
  – that they have explained the contents of
    the agreement, and responsibilities of each
    signatory, to their clients
  – that each counsel and client agrees to be
    bound by the terms of the agreement




•   Officers, Directors and Employees?

•   Special Committee of the Board?


• Importance of a thorough internal
• Maximize ability to assert privilege

• Review any document destruction
  program in place


• Attendance will not surprise investigators
• Imposes discipline

• Sensitive to privilege
• Counsel can provide clarification and


• Regulator may provide preliminary views
  on direction of investigation

• Assists in determining exposure faced by


• Consider ability to assert privilege
• Consider “access to information” legislation

• Consider applicability of privacy legislation



             Tel: 416.863.2429
             Fax: 416.863.2653
    E-mail: nigel.campbell@blakes.com

                                                                                   Nigel Campbell


                 A person who faces allegations of breaches of a regulatory framework, such

as securities regulation, may be confronted with the possibility of attack on several fronts.

He may face litigation jeopardy in the form of a criminal prosecution, a quasi-criminal

prosecution, an administrative hearing and, very often, a civil proceeding.

                 Obviously, in the context of the regulation of the capital markets, it is not

simply the issuer company that is at jeopardy. Regulators are increasingly focusing on

officers and directors in their investigations and enforcement proceedings. For instance,

Tom Atkinson, President and CEO of Market Regulations Services Inc. (“RS”), recently

stated that “[w]e are going after senior officers at firms that have had plenty of notice they

were committing violations…” and that “[w]e’ll look at the management of the firm, at the

directors of the firm. We’ll try to figure out where the cultural problem is stemming from.” 1 It

is particularly this multi-party type of investigation which can create deep complexities for

counsel – inside and outside – charged with managing an investigation. The divide –

imagined or real – between corporate interests and individual interests can present

potentially explosive divisive problems which can and must be kept in check, wherever


    T. Atkinson, “What’s on the 2005 Agenda”, SRO Conference, January 27, 2005.


                 The purpose of my talk will be to identify a number of important

considerations which must be kept in mind when dealing with a regulator during an


The Context

                 I do not propose to consider the defence of a criminal prosecution which

might arise from alleged regulatory offences. This is a vast subject unto itself and one

which engages criminal law skills and procedures. Suffice to say that a criminal

prosecution for regulatory related offences often will require a defence team made up of

both criminal and substantive specialists in the specific regulatory area.

                 My intention today is to limit my remarks to a more likely context. Specifically,

I will use as an example an alleged violation of Ontario securities laws. I will assume that a

client has called for assistance immediately following the receipt of either an “informal”

request or a “formal” summons pursuant to Section 11 of the Securities Act (“Act”) from the

Ontario Securities Commission Investigation Staff (“Staff”) to appear to answer questions

under oath or otherwise and to produce documents. I will then assume that the

investigation leads toward a proceeding. In other words, my focus will be upon the

investigation stage and the pre-hearing stage. I will leave the hearing aspect for another


                 I should add that, subject to some minor differences, the remarks that follow

apply to investigations initiated by other securities SROs, such as Regulation Services or

the Investment Dealers Association.


Investigation Stage – Pre-examination

              As stated above, the investigation of your client by the OSC may begin with

either a formal summons or informal request for answers and information. Staff have

recently shown a continuing preference for proceeding informally by consent rather than

formally by summons pursuant to Section 11 in the hope that by doing so they may avoid

impediments in their investigation. In particular, Staff will resort to the informal practice in

order to avoid the implications to Staff stemming from Sections 16 and 17 of the Act, or to

facilitate the use of the evidence obtained during the investigation in later proceedings by

Staff, police or disciplinary bodies. Accordingly, subject to comments I make hereafter

concerning the value of “measured co-operation” there may be reasons for having your

client respond only to a formal summons. The fact that the testimony is “compelled” will

then provide some legal limits on the use of the information provided by the client.

              Naturally, upon receiving the client’s distress call, the most important first

consideration will be to accurately evaluate the seriousness of the subject matter and the

implications to your client. Unfortunately, at the earliest stages, this is often easier said

than done.


              As suggested above, the threshold questions have increasingly become “who

is your client, have you more than one and is it possible or prudent to act for more than

one?” As regulators increasingly pursue officers and directors as individuals, there is


similarly increasing need to evaluate whether there are or will likely be multiple interests at

stake. There may be cases where the need for independent advice is evident at the outset

but this is not always the case. Obviously, there is often a desire to minimize the need for

multiple counsel, for many good reasons. The more counsel there are, the greater the

likelihood of confusion and tactical disagreement (in “joint defence” contexts). Also, the

costs escalate. So the need to resort to multiple counsel will be an early and difficult

judgement call. Where the need is not obvious, “cautions” should be discussed and the

future possibility for conflict identified.

               A further important threshold consideration, for a corporate client, may be

whether the regulatory investigation should be supervised by a “special committee” of the

Board. In the case of material investigations, particularly those implicating senior

management, it may be vital to have committee oversight and counsel reporting to that

committee exclusively. The structure and utility of such special committees is a topic unto


               Finally, at the threshold stages of an investigation is the need to quickly

develop a public relations strategy. This will entail media relations expertise and press and

“standby” statements and the like.

Internal Investigation

               Whatever the decision on representation, detailed early work will certainly be

necessary where there is a clear sense that the matter is serious. In such cases, it is

crucial to take as much time as possible, before responding to the OSC in any detail, to


thoroughly interview the client, review available documents, interview “witnesses” (subject

to “gag” or “confidentiality” limitations), obtain technical securities law advice, retain

“experts”, and otherwise take steps to obtain a full understanding of the circumstances

leading to the OSC inquiry.

              In some instances, much of the detailed early work may already have been

done because it could be that the client is already facing a complaint made to his or her

SRO or is joined in civil proceedings.

              In other instances, however, the OSC investigation and request for

information is the first event and, particularly where the investigation is advancing rapidly,

the client may know very little or will have heard only rumours and will be uncertain as to

the exact nature of his predicament. In such circumstances, it is particularly important for

experienced counsel to immediately make contact with the OSC Staff involved and obtain

as much time and early disclosure as possible of the underpinnings of the investigation. In

my experience, particularly where Staff has confidence in the caller, Staff is often co-

operative and will elaborate somewhat helpfully on what the investigation entails (subject

matter and time frame) and, possibly, any preliminary conclusions and theories that Staff

may have in mind.

              After this early and exploratory contact, you will then be better able to gauge

whether the client is a peripheral fact witness, a potential target or a definite target with all

the attendant jeopardy. This in turn will provide the first opportunity to evaluate the subject

matter and implications and, where the risks are there, carry out appropriate further


inquiries, preparation and then make hard tactical decisions. This contact will also help you

assess whether the client may also anticipate criminal and/or civil consequences. Where

either of these latter possibilities exist, you will need to be extra vigilant about what you

provide to Staff and on what basis.

              Generally speaking, where the circumstances of the client are serious, the

main tactical decision early in the investigation stage will be whether your client will adopt,

at the outset, a measured yet co-operative relationship with the OSC Staff or a more clearly

confrontational stance.

              In most situations, a measured co-operation is sensible and recommended.

This is the case for several good reasons. Firstly, self-regulatory organizations place

importance on appearances and often take greater “negative” interest in an apparent

confrontation. Secondly, the regulator may have a reliable co-operation “rewards” policy.

Thirdly, it is a broadly held view, concerning OSC administrative proceedings at least, that

the chances of winning in a battle are slim, so you do not want to “ask for” trouble.

Fourthly, it is frequently said, with good reason, that the client’s best interests lie in

confidential “damage control” rather than in public litigation. Fifthly, the costs associated

with what are often very technical and protracted proceedings can be very high. On the

other hand, and this risk has been increasing with the current exponential growth in

penalties and enforcement Staff investigative activity, when the OSC shows early signs of

extreme hostility and the ramifications of Staff’s suspicions upon the client are too great,

confrontation or full scale litigation may be the only alternative.


              Assuming for our purposes that the response is to be what I have termed

“measured co-operation”, it is important to understand that this does not equate with “giving

up” nor with being submissive to Staff authority. Rather, it means turning to more subtle

steps which are productive, which avoid the public glare and which serve to reduce any

advantage which the OSC Staff may have gained through surprise and their early

investigative efforts.

Investigation Stage – Examination

              We now come to the matter of providing a statement or providing answers to

questions in the context of a transcribed examination. In our example, I am assuming that

the client is appearing either voluntarily or pursuant to summons and that counsel and the

client are fully prepared for what amounts to a discovery process.

              Before attending, and again before answering any questions on the record, it

will be important to have the OSC Staff state what use, if any, they intend to make of the

record. If the examination is being conducted formally pursuant to Section 11, then the Act

mandates that the answers given are not disclosed to any other persons or parties and are

used strictly for the purposes of Staff’s investigation. However, it is very important to bear

in mind that the OSC’s approach to not disclosing this information is currently in a state of

flux and, in my opinion, it is increasingly likely that the answers your client may give will be

provided to other parties in any OSC proceedings, to other enforcement authorities

(including those in other countries) and, in the case of a professional client, will be sought

after by the professional society during its investigation. Similarly, the issue of whether that


transcript, which is provided by the OSC to the client as a matter of course, is producible in

civil litigation is an open question. Whatever the case, as an application under Section 17 is

increasingly a risk, I recommend that the ‘record’ disclose that your client is giving evidence

with every expectation of confidentiality.

               As a further preliminary, and where the client has attended with documents, it

is important to ensure that Staff is made aware of any documents which may contain

sensitive or private information which ought to be deleted. This may be the last opportunity

to expurgate private information before losing control of who sees that information. It is

very important to remember once again that the documentary material provided may one

day form part of an exhibit book and thus become public or may land in the hands of


               Thereafter, during the course of the examination it will be necessary to remain

sensitive to matters of privilege or matters requiring clarification. Counsel will want to

participate in the examination of the client a little more actively than he might during the

discovery of a client in a civil proceeding. While counsel will want to avoid unnecessary

interruptions, it is entirely appropriate in my view, to participate more than is usually the

case in an examination for discovery. For example, rather than wait until the end of the

examination to ask the witness to clarify any points, it is my suggestion that, where

appropriate, counsel also question the client on the record during the course of the

examination. Similarly, if the Staff examiner skirts a favourable issue or misses a

significant area of evidence, I would recommend that counsel immediately elicit that

evidence from the client for the purposes of the record. In short, counsel will want to be


alert to do whatever may be done to improve the likelihood that the transcript is not simply

reflective of Staff’s case.

              This more active role is necessary because of the process. The transcript

often will be reviewed by other – perhaps more senior– Staff who were not involved at the

actual examination and its contents become vitally important in the decision to proceed or

not against the client and others. Consequently, the transcript must work as much as

possible for the interviewee and not simply against him. This need arises from the fact that

Staff will approach the investigation with a theory of guilt rather than innocence in mind.

Due to this guilt-confirming tendency of investigators, the questioning which forms the

framework for the interview and transcript tends to be one-sided. The unprotected

interviewee often tends to conform to the interview structure and does not expand upon

other helpful matters which the examiner may omit. Accordingly, the whole story must

make it into the transcript and this is easiest to accomplish while the examination is

occurring. Additionally – but do not consider this as an alternative – it is possible to ask

Staff to allow the opportunity to review the transcript so that the client and counsel have

adequate time to ensure its accuracy or clarity and to expand or supplement its scope to

balance, as much as possible, any inappropriate negative tone it may have acquired at the

hand of the examiner. Even a seemingly innocent remark during the course of an

examination can take on a wholly unintended connotation on a written page.

                                              - 10 -

Investigation Stage – Post Examination

              Once the examination is over, it is important for counsel to stay in touch with

Staff and volunteer any further assistance. Counsel should arrange a call and ask Staff to

speak of their tentative conclusions. Where Staff have continuing doubts, and counsel is

kept apprised, counsel can do much to answer and quell Staff’s problems before they take

on too much momentum. It is also important to ask Staff to provide advance notice of any

intended Notice of Hearing.

Pre-Hearing Stage

              For my purposes, the pre-hearing process begins upon the receipt of the

OSC’s draft Notice of Hearing and Particulars or the receipt of an Information in the context

of a quasi-criminal prosecution.

              While it may not always be possible to have Staff agree to provide a draft

Notice of Hearing and Particulars, in certain instances Staff will oblige. Clearly, the value in

obtaining the draft will be that it may allow for negotiation on the terms of any final public

notice and may permit more flexibility in settlement discussions.

              Naturally, in appropriate cases, settlement will have already been explored

but the possibility of settlement will be elevated to perhaps the highest priority at this point.

If settlement is likely to ever occur, this is the time where the price paid by the client – in

terms of reputation, dollars, and other “damage” – will be the most controllable and least

costly. While the public will hear of the settlement, the context may no longer include

                                              - 11 -

speculative, inappropriate, embarrassing and damaging allegations. Apart from the value

in being able to agree on a “toned down” Notice of Hearing and Particulars, it may also be

possible to arrange with Staff that the proceedings begin and end with little or no time

intervening and thereby shorten the public focus.

              Thereafter, assuming no early settlement occurs and the Notice of Hearing or

Information is issued, the emphasis on damage control and settlement continues. In this

respect, it is critical to understand, in the OSC context, that if the client has been troubled

by the publicity attendant upon the publication of the Notice of Hearing or the

commencement of the Provincial Court proceedings, his discomfort will often only worsen

at the hearing stage. Also, where a hearing occurs, it will be very difficult to control the

record, and potential adversaries in civil proceedings will audit the hearing to obtain a full

measure of discovery.

              On a less pessimistic note, even where the investigation stage has ended

unsuccessfully for the client and where the Notice of Hearing or Information has been

issued, it is still possible in some cases that the regulator may discontinue. This may occur

because the subject matter will often be turned over to different personnel or additional

personnel for the pre-hearing and hearing stages. The new Staff member, particularly

where they bring other legal experience to the case, may be persuaded that the matter

deserves a second and closer review or that the expected evidence is incomplete and not

entirely supportive of the allegations.

                                             - 12 -

              Naturally, to achieve this turn-around, it will be necessary to obtain the best

possible disclosure of Staff’s case. At the pre-hearing stage – though quite close to the

hearing – Staff is obliged by the OSC rules of practice to provide significant disclosure

including “Will Says” of the witnesses they intend to call and it may be possible on motion

to the OSC to obtain more complete documentary disclosure as well. With this full

disclosure in hand and carefully analysed, it may be possible to identify the weakest links in

the Staff case and produce information to convincingly break the case they have. The

more likely situation, however, is that these disclosure efforts will improve counsel’s

preparedness for the hearing and counsel’s settlement negotiation power.

              A further subject worthy of note concerns the subject of pre-hearing motions.

Increasingly the OSC is being asked to make preliminary rulings on a variety of points

including production, disclosure, motions to strike and so forth. I think the expanded use of

the motion process is the natural result of more aggressive Staff practices because it is

often the only way of bringing some balance and scrutiny to Staff’s methods. I believe the

OSC is becoming more comfortable with this process and it should be used to advantage

whenever a proper issue arises. However, a word of caution is important. Last minute

motions get a very cool reception as, rightly or wrongly, they may be viewed as acts of

desperation, delay and so forth. It is my opinion that any such motion is best made (and

best received) well in advance of any hearing. The motion should be approached

according to the Rules of Practice with a substantial motion record where necessary.

              The last point I wish to make relates to settlement procedures and mediation.

Under the new OSC rules of practice, a “Pre-hearing” Commissioner may be assigned to

                                             - 13 -

deal with settlement or other pre-hearing issues. It may be valuable, in an appropriate

case, where you cannot get Staff to accommodate a reasonable approach to settlement, to

have the appointed commissioner provide a form of mediation service. I think that as the

OSC becomes more active in the enforcement hearing process, it will serve the public

interest to explore the utility of forms of Alternative Dispute Resolution in an administrative



              The client who faces allegations of breaches of securities law is in an

extremely precarious position. Experienced counsel for such a client can best serve the

client by carefully controlling the investigation process and, if possible, avoiding any OSC

proceeding. A hearing ought to be taken only where the OSC allegations and demands are

entirely wide of the mark and unacceptable. At all times through the investigation and pre-

hearing stages, a consensual resolution should be pursued and this will be most easily

achieved on the best possible terms with careful and active participation in the process.





• CBCA companies can indemnify for
  investigative proceedings and advance
  defence costs

• OBCA companies not permitted to advance
  defence costs or cover costs of investigative
  proceedings (although in practice many OBCA
  companies do so, subject to obtaining promise
  to repay if director or officer ultimately found
  not to have acted honestly, in good faith, in
  the best interests of the corporation and with
  reasonable belief their conduct was lawful)


• NB — where corporation refuses, fails or is not
  permitted to indemnify for investigation-
  related expenses

• May cover “Defence Costs” for civil, criminal,
  administrative or regulatory investigations

D&O LIABILITY POLICIES                    (Cont’d)

• Insured Person must be identified in writing by
  the investigating authority as a person against
  whom a proceeding (civil, criminal,
  administrative, regulatory or arbitration) may
  be commenced or in the case of securities
  investigations, after service of a subpoena on
  an Insured Person

• A compliance audit is not an investigation for
  this purpose


• Insured Person appoints counsel
• Legal fees and disbursements
• Investigative costs
• Expert assistance
• Insurer’s consent required for choice of
  counsel, hourly rates and expenses to be
  incurred - must act reasonably, in good faith
• Insurance policy should provide for
  advancement of defence costs on a current
• Securities Claims outside Canada - are they


            MARY JANE STITT

              Tel: 416.863.2940
              Fax: 416.863.2653
      E-mail: maryjane.stitt@blakes.com

                                                                                                Mary Jane Stitt

                  This paper considers the extent to which directors and officers who are
required to participate in a regulatory investigation may look either to the corporation whom
they serve or to its directors’ and officers’ liability policy for coverage for their legal costs. It
will also discuss as a practical matter how the defence undertaking plays out where an
insurer is involved.

Indemnification Under Corporate Statutes

                  Both the Canada Business Corporations Act and the Ontario Business
Corporations Act provide that a director or officer is entitled to indemnity from the
corporation for all “costs, charges and expenses reasonably incurred” while participating in
certain types of proceedings to which he or she is made a party or otherwise involved
because of their association with or offices held in the corporation. Indemnity for
investigative proceedings receives uneven treatment in the corporation statutes across

                  The Canada Business Corporations Act permits a corporation to indemnify its
directors or officers for the costs, charges and expenses that they incur in connection with
investigative proceedings in which they are “involved” because of that association with the
corporation.1 The Ontario Business Corporations Act does not permit corporations
incorporated under that Act to indemnify their directors or officers for investigative

    Subsection 124(1) of the Canada Business Corporations Act provides:

          “A corporation may indemnify a director or officer of the corporation, a former director or officer of the
corporation or another individual who acts or acted at the corporation’s request as a director or officer, or an
individual acting in a similar capacity, of another entity, against all costs, charges and expenses, including an
amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any
civil, criminal, administrative, investigative or other proceeding in which the individual is involved because of
that association with the corporation or other entity.”


proceedings2 and has a stricter standard for indemnity generally in that mere association
with the corporation will not suffice; rather, under the Ontario Business Corporations Act,
the director or officer must be made a party to the proceeding by reason of being or having
been a director or officer of the corporation.3

                  There are certain conditions that must be met for indemnity under the Canada
Business Corporations Act:

          1.      No court or other authority judged the director or officer to have committed
                  any fault or admitted to do anything the individual ought to have done.

          2.      The director or officer acted honestly and in good faith with a view to the best
                  interests of the corporation.

          3.      In the case of a criminal or administrative proceeding that can result in a
                  monetary penalty, the director or officer had reasonable grounds for believing
                  that his or her conduct was lawful. 4

Subsection 136(1) of the Ontario Business Corporations Act adopts conditions for
indemnity similar to 2 and 3 above – see footnote 2 below.

    Subsection 136(1) of the Ontario Business Corporations Act provides:

         “The corporation may indemnify a director or officer of the corporation, a former director or officer of
the corporation or a person who acts or acted at the corporation’s request as a director or officer of a body
corporate of which the corporation is or was a shareholder or creditor, and his or her heirs and legal
representatives, against all costs, charges and expenses, including an amount paid to settle an action or
satisfy a judgment, reasonably incurred by him or her in respect of any civil, criminal or administrative action
or proceeding to which he or she is made a party by reason of being or having been a director or officer of
such corporation or body corporate, if,

          (a)     he or she acted honestly and in good faith with a view to the best interests of the corporation;
          (b)     in the case of a criminal or administrative action or proceeding that is enforced by a monetary
                  penalty, he or she had reasonable grounds for believing that his or her conduct was lawful.
  In Balesteri v. Robert (1985), 30 B.L.R. 283 (Que.S.C.), aff’d [1992] A.Q. 495 (Que.C.A.) the Court
concluded that a director or officer may be considered a “party to the proceeding” in which he or she has only
an indirect or eventual interest, where he or she is required to testify and might subsequently have charges
laid against them.
  Subsections 124(3) and (5), Canada Business Corporations Act.


               Another major difference between indemnity for directors and officers under
the Canada Business Corporations Act and the Ontario Business Corporations Act is that
under the Canada Business Corporations Act, the corporation has the express right to
advance monies to a director, officer or other individual for the costs, charges and
expenses of defending a civil, criminal, administrative, investigative or other proceeding in
which the individual is involved because of their association with the corporation. 5 The
Ontario Business Corporations Act does not contain a similar right to advance defence
costs during the course of the litigation and before final adjudication of the charges or
allegations against the director or officer.

               In practice, boards of directors of Ontario corporations sometimes elect to run
the risk of advancing defence costs, even though not expressly permitted under the
legislation. In addition, Ontario and federal corporations will enter into direct indemnity
agreements with their directors and officers which provide for the mandatory advancement
of defence costs and include investigative proceedings among the types of proceedings to
which indemnification is to apply. The downside to any director who votes for or consents
to a resolution authorizing a payment of indemnity contrary to section 136 of the Ontario
Business Corporations Act is that he will be jointly and severally liable to restore to the
corporation any amounts so distributed or paid and not otherwise recovered by the
corporation.6 Typically, where an Ontario corporation elects to advance defence costs, in
order to protect the directors approving the advance, the corporation will require an
undertaking from the indemnified director or officer to repay those costs if they ultimately do
not satisfy the statutory standards of acting honestly, in good faith with a view to the best
interests of the corporation and, in the case of a criminal or administrative proceeding that
results in a monetary penalty, having reasonable grounds for believing that his or her
conduct was lawful.

 Subsection 124(2), Canada Business Corporations Act.
 Subsection 130(2)(e), Ontario Business Corporations Act. Subsection 118(2)(d), Canada Business
Corporations Act is similar.


              The above discussion indicates that while the Canada Business Corporations
Act has broad rights of indemnity, the provincial corporation statutes are not as generous.
Thus, a director or officer who finds himself the target of, or a person with material
information to provide in, a statutory investigation may not have the right to demand that
the corporation defend him or her or reimburse them for their associated defence costs.
This is a situation which can be addressed to some extent through procuring a policy of
directors’ and officers’ liability insurance, although a person who receives a summons or
subpoena where they are not realistically a “target” may have no recourse to either
insurance or a corporate indemnity.

Directors’ and Officers’ Liability Insurance

              Over the past several years, directors’ and officers’ liability policies have been
modified to expressly provide coverage for the defence costs associated with participating,
involuntarily, in a statutory investigation (“Defence Costs”). Coverage for such expenses
very much depends, however, on whether the individual is a “target” or merely a witness
with important information needed by the investigator to prosecute the target corporation or
some other potentially culpable director, officer or employee. Note that an investigation, to
be a covered Claim, must typically be of the Insured Person.

              In certain policy forms, the expression “Claim” is defined as including a civil,
criminal, administrative or regulatory investigation of an Insured Person:

       1.     Once such Insured Person is identified in writing by an investigating authority
              as a person against whom a civil, criminal, administrative, regulatory or
              arbitration proceeding may be commenced; or

       2.     In the case of an investigation by a provincial securities commission or other
              similar foreign securities authority, after the service of a subpoena upon such
              Insured Person.


              In the securities regulatory environment, a securities commission may not
immediately begin their investigation pursuant to the enforcement section of the relevant
Securities Act. For example, the Staff of the Ontario Securities Commission may elect to
conduct a compliance review or continuous disclosure review under Sections 20 or 20.1,
Part VII of the Securities Act, and not pursuant to Part XXII – Enforcement of the Securities
Act, in reviewing and asking questions about transactions which may ultimately give rise to
charges against the corporation and potentially its directors and officers. A compliance
review or audit by a regulatory authority pursuant to powers other than enforcement powers
may not trigger any defence or indemnity obligation under a directors’ and officers’ liability
policy even though it is obvious to everyone where the compliance review or audit might
eventually lead. Consequently, even in a compliance or continuous disclosure review, a
situation could exist where it may be desirable in order to protect a vulnerable director or
officer that they have their own counsel to assist them with respect to answers that they
may be called upon to give regarding their conduct or disclosure. Unless a directors’ and
officers’ liability insurer agrees, from a loss prevention standpoint, to cover such costs, it
may not be possible to compel the liability insurer to cover the costs of counsel retained to
assist individuals during a compliance review or other statutory audit process.

What Happens Once the Insurer Agrees the Investigation is Covered?

              Many, but not all, directors’ and officers’ liability policies provide that the
Insured is responsible for defending, subject to the funding of Defence Costs by the insurer
in association with the Insured. Defence Costs are included in the limits of insurance.
Under these “funding” types of policies, the Insured Person is responsible for appointing
their legal counsel, but will require the Insurer’s consent to the choice of counsel. The
insurer’s concurrence with respect to the proposed hourly rates for counsel is also usually
required and any significant disbursements or expenses, including the costs of retaining
expert witnesses or other types of expert assistance, must generally be approved in
advance by the insurer. Because of the nature of an insurance relationship, which is one of
utmost good faith, insurers must act reasonably, fairly and in good faith when granting or
withholding their consent concerning the choice of counsel, resources to be devoted to the


defence and the defence strategy. If insurers intend to survive long term in the directors’
and officers’ liability insurance marketplace, particularly in providing coverage to premium
clients, they need to be sensitive to the specific reputational and professional concerns that
are sometimes unique to directors and officers of public companies or regulated
institutions. The major players in the directors’ and officers’ liability insurance marketplace
typically are cognizant of these reputational concerns and of the need to retain top flight
counsel to achieve the best possible outcome in the long run for everyone concerned.

              A directors’ and officers’ liability insurance policy should provide for
advancement of Defence Costs on a current basis. Where the policy is silent with respect
to the timing for payment of Defence Costs, which sometimes occurs, it is critical at the
very outset of an investigation to strike an agreement with the insurer concerning the
frequency with which legal accounts will be paid and to make arrangements for direct
payment from the insurer to the legal counsel of their bills once any applicable deductible is
exhausted. If the corporation is not permitted to indemnify the director or officer, or is
unable to do so due to reasons of financial impairment, the directors’ and officers’ liability
policies will usually provide that there will be no deductible (or “Retention”) that will apply to
the payment of Defence Costs. Thus, in those circumstances, the director or officer should
be able to receive immediate payment of their Defence Costs which will be advanced by
the insurer as required.

              The above discussion of the potential coverages for Defence Costs related to
regulatory investigations essentially assumes that the investigation is incurring in Canada.
Particular attention should be paid to whether the directors’ and officers’ liability policy
excludes coverage for investigations or securities claims occurring outside of Canada. One
should not assume that a Canadian insurer issuing a policy to a Canadian public company
will automatically cover U.S. securities claims and related investigations, in the absence of
specifically purchasing that coverage.

              The above is a very brief discussion of some of the issues that may arise
where a director or officer is involved in a regulatory investigation and must find a source of


funding for their legal representation. The major insurers participating in the directors’ and
officers’ liability insurance marketplace are attuned to the changing regulatory environment
and to the needs of the individual directors and officers who ultimately require the
protection of their insurance products, although there are still potential gaps in coverage for
individuals dragged into an investigation of some other person’s conduct.

              It is strongly recommended that if you are a director or officer of a public
company or of a regulated institution that you develop an understanding of the protections
that are currently available to you directly from the corporation as well as the extent to
which the corporation has endeavoured to protect your interests through the purchase of a
responsive and comprehensive policy of directors’ and officers’ liability insurance.


Detailed Overview          Litigation
Lawyers Alphabetically

Lawyers by Call to Bar     Blakes has one of the largest and most successful litigation practices in the country. We have
                           represented national and international clients in difficult and complex commercial disputes of every
Lawyers by Office
                           kind, in virtually every forum across Canada. Our litigation lawyers regularly appear in the Supreme
Law Clerks                 Court of Canada on cases at the forefront of developments in Canadian law. We are counsel on
Recent Honours             leading cases in corporate, commercial, securities, competition, construction, class action,
                           constitutional, product liability, insolvency, real estate, banking and aboriginal rights litigation, to
                           name just some of our leading practice areas.

 Individual Lawyer
 Publications              The litigation department has a well-founded reputation for excellent advocacy, practicality, sound
                           judgment, professionalism and integrity. Blakes approach to dispute resolution focuses on
 Litigation Bulletins      understanding our clients' businesses and objectives, and providing pragmatic advice and cost-
                           effective representation. We explore all methods of dispute resolution to achieve our clients'
                           objectives, and litigate aggressively on their behalf when appropriate.
Professional Appearances
Return to Practice Areas
                           Blakes litigation practice is complemented by the expertise and strength of lawyers in all
                           departments of the Firm across the country. Our litigators regularly consult other lawyers in the
                           Firm for specialized and cost-effective input on cross-disciplinary issues that arise in complex
                           litigation. In addition, Blakes resources include excellent paralegal support and up-to-date
                           technology to assist with document organization and production, and any other aspects of dealing
                           with the litigation process. With the Firm's breadth of expertise and experience, and its national and
                           international presence, it is well suited to effectively manage complex litigation for all of our clients.

                           The following are brief descriptions of the experience and expertise of Blakes litigators in a number
                           of specific litigation areas, in alphabetical order:

                               l   Aboriginal Rights/First Nations
                               l   Administrative
                               l   Alternative Dispute Resolution (ADR)
                               l   Banking and Bills of Exchange
                               l   Broker and Securities Enforcement Litigation
                               l   Class Actions
                               l   Communications
                               l   Competition
                               l   Constitutional and Charter of Rights
                               l   Construction
                               l   Corporate, Commercial and Securities
                               l   Criminal and Quasi-criminal
                               l   Energy
                               l   Environmental
                               l   Estates and Trusts
                               l   Information Technology
                               l   Insurance
                               l   Intellectual Property
                               l   Labour and Employment
                               l   Media and Defamation
                               l   Municipal and Planning
                               l   Pension
                               l   Privacy and Freedom of Information
                               l   Procurement
                               l   Product Liability
                               l   Professional Negligence
                               l   Public Sector
                               l   Real Estate
                               l   Restructuring and Insolvency
                               l   Tax Litigation
Detailed Overview          Litigation
Lawyers Alphabetically

Lawyers by Call to Bar     Aboriginal Rights/First Nations
Lawyers by Office
                           Blakes has a leading national practice representing First Nations. For example, Blakes litigators
Law Clerks                 acted as counsel in the Supreme Court of Canada on such leading cases as Isaac v. Davey, Guerin,
Recent Honours             Sparrow, Roberts, Gladstone and Delgamuukw. Today, we are acting in Ontario, Alberta and British
                           Columbia on some of the largest cases in the country involving aboriginal rights, land claims,
                           natural resource issues and compensation. For example in Alberta, Blakes is representing the
                           Ermineskin First Nations in a large trust case currently at trial in the Federal Court of Canada
 Individual Lawyer         concerning the federal government’s management over many years of royalty revenues from oil
                           regions belonging to the First Nations. In Ontario, Blakes is representing the Six Nations of the
 Litigation Bulletins      Grand River in the case against the federal and Ontario governments for an accounting of the
                           management by government since 1784 of the disposition and proceeds of over 900,000 acres of
                           land belonging to the Six Nations.
Professional Appearances
Return to Practice Areas   Administrative

                           Blakes has extensive experience and expertise in representing clients before virtually all types of
                           federal and provincial administrative tribunals including securities commissions, energy,
                           environmental, labour, utility and municipal boards, human rights commissions, the Canadian
                           Radio-television and Telecommunications Commission, the Competition Tribunal, the Canadian
                           International Trade Tribunal, Financial Services Tribunal and the environmental appeal tribunals, to
                           name a few. Blakes expertise in administrative law includes bringing and responding to applications
                           for judicial review of government actions. We have also had important retainers at public inquiries
                           such as the APEC Inquiry in Vancouver (where we were counsel to the Commission), the Walkerton
                           Inquiry into the safety of Ontario’s drinking water, and the Krever Commission on delivery of blood
                           services. Our lawyers also represent clients on professional discipline matters at human rights
                           boards of inquiry, coroners’ inquests and before a wide range of other tribunals.

                           Alternative Dispute Resolution (ADR)

                           All of our litigation lawyers have experience with Alternative Dispute Resolution (ADR) in its various
                           forms including mediation and arbitration, and are committed to advising clients of ADR options to
                           achieve their objectives where appropriate. Our lawyers provide advice to the Firm’s clients as to
                           the forms of ADR that are available and the most suitable form to effectively resolve their disputes,
                           both when contracts are written and when disputes arise. Blakes lawyers have considerable
                           experience in domestic and international arbitrations under provincial arbitrations acts, the
                           American Arbitration Association rules, the International Chamber of Commerce rules, and various
                           other arbitration rules. We have experience with more creative forms of ADR including mini-trials
                           and final offer selection, for example, and always strive to find the best procedure and forum to
                           achieve our clients’ objectives in a cost-effective manner. In addition, a number of Blakes senior
                           litigators have established reputations as arbitrators in both domestic and international arbitrations.

                           Banking & Bills of Exchange

                           Blakes has represented leading Canadian financial institutions since the Firm’s inception. The Firm
                           has extensive experience with virtually every sort of dispute a financial institution could encounter.
                           This includes: claims relating to cheques and other bills of exchange; letters of credit; alleged
                           bankers’ negligence and breach of fiduciary duty; high value debt and mortgage enforcement; the
                           validity of debt and guarantee obligations; enforceability of account verification agreements; fraud
                           recovery; fidelity insurance; and group creditor insurance. In addition to their own experience in
                           these and other areas, our litigators work closely with lawyers in our Financial Services Group to
                           efficiently utilize their expertise, where appropriate.

                           Broker & Securities Enforcement Litigation

                           Blakes litigators are recognized as leaders in all facets of civil litigation and tribunal litigation
                           associated with the capital markets and securities trading. Blakes regularly represents market
                           participants of every description. These include reporting issuers, underwriters, securities’ dealers
                           and investment advisors. In this connection, Blakes litigators appear before the courts, securities
                           commissions, stock exchanges and other capital market regulators to deal with matters as diverse
                           as hostile take-over bids, insider trading, stockbroker malpractice and enforcement of securities
regulations and exchange by-laws.

Class Actions

With its breadth of experience in class actions, Blakes has become one of the leading law firms in
the country in defending class action suits. Over the past few years, Québec, Ontario and British
Columbia have witnessed an explosion of class action lawsuits in virtually every area in which our
clients do business. Blakes has responded by creating a National Class Action Practice Group.
Blakes lawyers have defended class actions involving product liability claims (medical devices
including pacemakers, breast implants and heart valves, pharmaceuticals, gas furnace vents and
dental products), claims related to corporate, commercial and employment law issues (shareholder
rights, sports ticket holders, utility bills, syndicated mortgages, overtime wages, wrongful dismissal,
foreign currency credit card transactions), environmental claims and Competition Act matters. Our
clients in this area include leading manufacturers of: pharmaceuticals; medical devices and dental
products; chartered banks and other leading financial institutions; major utility companies; and
professional sports organizations. The Firm has also been at the forefront of pension class actions,
acting for corporations against defendant classes. For example, we represented Cooper Industries
in the first defendant class action in Ontario.


Blakes is often required to draw upon its legal expertise in representing telecommunications and
broadcasting clients in litigation matters. For example, Blakes litigators defended Bell Canada in a
claim by Sprint alleging unlawful interference with economic relations and alleged breaches of the
Telecommunications Act. Blakes acted as counsel in a dispute involving Look Communications Inc.
and Rogers relating to cable and satellite TV and their regulation. The Firm represented the Trustee
of the Bruce Municipal Telephone System in extensive litigation to resolve uncertainty as to its
ownership, including administrative hearings and court proceedings connected with an eventual
transfer of the system in placing it under municipal ownership. Blakes lawyers recently argued an
appeal to the Federal Court of Appeal of a Canadian Radio-television and Telecommunications
Commission (CRTC) decision relating to the sale of an interest in a specialty television channel to a
cable company. In addition, Blakes regularly assists various telecommunications common carriers in
representations to the CRTC, both in industry-wide regulatory framework proceedings and in
carrier-specific proceedings.


Blakes has one of the leading competition litigation practices in Canada. The lawyers have engaged
in a substantial volume of competition litigation under the Competition Act since first enacted in
1986. Blakes lawyers have acted as counsel in three of the four contested merger cases which have
gone to the Competition Tribunal (Southam, Hillsdown and Superior Propane) and before the
National Transportation Agency (CP Ships); in the leading abuse of dominant position cases (Air
Canada/Canjet, Tele-Direct, Nutrasweet); and in some of the most hotly contested "consent order"
cases against concerted and vigorous opposition by major intervenors (Chapters/Indigo, Interac,
Imperial Oil). Blakes also has considerable experience in defending class actions in provincial
superior courts which have been launched regarding private right of action provisions of the
Competition Act. As well, Blakes lawyers have defended clients charged under the criminal law
provisions of the Competition Act with regard to conspiracy and false and misleading advertising.

Constitutional & Charter of Rights

Blakes has a leading constitutional law practice dealing with both Charter and division of powers
issues. The Firm has advised and acted for clients on leading constitutional cases including
discrimination and equality rights, tax, search and seizure, aboriginal rights, education funding,
investigative powers, health and environmental matters. Blakes lawyers have appeared on leading
cases in the Supreme Court of Canada on constitutional issues involving labour relations (Ontario
Hydro), securities regulators’ enforcement powers (Global Securities), education funding (Ontario
Home Builders Association), taxation (Air Canada v. Ontario), self-incrimination (Thomson/Stelco),
discrimination (Zurich), aboriginal rights (Delgamuukw, Sparrow) and freedom of expression
(Mentuck, Zundel, Ross, Ramsden, Taylor, Smith v. Jones, Hill v. Church of Scientology).


Blakes construction law litigators are experienced in all matters relating to the construction process.
This includes: disputes which arise out of the tendering process; contract negotiations and
performance; project financing and syndication; design changes and defective products;
professional liability claims; claims for extras; trust claims; claims under construction bonds and
related insurance policies; occupational health and safety claims; and construction liens. Blakes
lawyers have extensive experience in all forms of dispute resolution, including references, trials,
appeals, mediations and arbitrations. They have also appeared in all levels of our courts, including
the Supreme Court of Canada. Blakes litigators draw upon the extensive experience and expertise
of commercial lawyers in the Firm who specialize in construction contract law, as well as specialty
lawyers in our environmental, insolvency, real estate and municipal law groups. Our retainers in
construction law litigation include claims relating to Hibernia and the Confederation Bridge, several
major Canadian hydroelectric and co-generation projects, the judicial review of government awards
of naval maintenance contracts and the arbitration of claims relating to the construction of waste
recovery plants. Blakes has also represented clients in such cases as Edgeworth Construction v.
N.D. Lea and Associates (S.C.C.), Dancorp Developments Ltd. v. Metropolitan Trust Co. (S.C.C.)
and Standard Trust Co. v. Helo Enterprises Ltd. (S.C.C.).

Corporate, Commercial & Securities

Corporate, commercial and securities litigation are the mainstay of the Firm’s litigation department.
Blakes has one of the largest commercial litigation departments in Canada, whose senior counsel
are recognized as leaders in the field. Blakes litigators have acted as counsel in: hostile take-overs
(Canwest v. WIC, Amico v. Air Canada); other securities matters; shareholder disputes (McCains,
Headline Sports v. Shaw Communications); oppression cases; fair valuations; complex contractual
disputes (Welch's, Labatt) and many other commercial litigation matters covering all areas
including fiduciary duties, good faith, breach of confidence, misrepresentation and economic torts.
Blakes has the experience and capability to deal effectively with large, document intensive cases
which raise a multitude of issues and require a team approach. Blakes has also had considerable
experience in acting for clients in situations where urgent, injunctive relief was necessary to protect
a client’s assets or business. Whatever the issue, where efforts to resolve disputes have failed,
Blakes litigators are prepared to aggressively litigate to ensure that our clients’ interests are fully

Criminal & Quasi-criminal

Blakes lawyers have experience defending and advising corporations and individuals on criminal
and quasi-criminal matters. The Firm defends quasi-criminal charges such as offences under the
Competition Act, the Income Tax Act, the Customs Act, the Bankruptcy Act, and the Export and
Import Permits Act, to name a few. Many other quasi-criminal offences are handled by lawyers in
specialty groups such as environmental offences, securities offences and occupational health and
safety violations. In the employment area, we frequently give advice to employers on how to
handle problems of fraud and theft in the workplace, and become involved in criminal proceedings
when compensation orders may be obtained. A few of the lawyers who work in this area also
defend individuals and corporations on charges under the Criminal Code, such as theft, fraud and
breach of trust. Our lawyers are frequently called upon to advise and assist clients in responding to:
investigations by government; demands for information or documents; the execution of search
warrants; and the summoning of individuals to court to provide evidence in ongoing cases. Our
lawyers have considerable expertise handling issues that arise under the Canadian Charter of
Rights and Freedoms, as often occurs in these types of cases.


For many decades, Blakes has been representing clients in various energy-related industries both in
courts and before regulators across the country. The Firm acts for exploration and production
companies, midstreamers, marketers, refiners, utilities, industry users and financiers, energy
income trusts and other market participants. Blakes lawyers have a broad range of experience
dealing with energy regulators at both a national and a provincial level. Our lawyers represent
clients on a regular basis before the National Energy Board, the Ontario Energy Board and the
Alberta Energy and Utilities Board, dealing with matters such as rate hearings, pipeline and facility
cases, and municipal franchise applications. Blakes has also had a leading and pre-eminent role in
the recent drive towards gas and electricity deregulation both in Alberta and Ontario, and acts as
counsel for the Alberta Transmission Administrator and various Power Purchase Arrangement
owners. Blakes lawyers appeared as counsel at the first hearing before the Ontario Energy Board to
set the electricity transmission rates post-deregulation. Blakes lawyers are very familiar with the
numerous statutes, regulations and rules that govern the different energy sectors. The Firm’s depth
and breadth of practice in this area is unparalleled and affords the opportunity to provide the most
cost-effective and practical solutions to our clients.


Blakes has a national group of environmental and litigation lawyers who handle all forms of
environmental and health and safety litigation. This includes: the defence of corporations, as well
as their directors, officers and employees charged with environmental and health and safety
offences (R. v. Imperial Oil); the pursuit and defence of civil claims involving environmental
damage (CN Railway and Northern Wood Preservers v. Ontario Ministry of Environment); and
counsel in environmental hearings. Blakes lawyers represented the Regional Municipality of Ottawa-
Carleton against Consumers Gas Company in a complex case regarding coal tar contamination that
led to new environmental guidelines being issued by the Ontario Ministry of the Environment.
Members of Blakes Environmental Group have represented clients involved in: the creation of the
Niagara Escarpment Plan; the Walkerton Inquiry into the safety of Ontario’s drinking water; the
environmental assessment of the Ontario Ministry of Natural Resources’ forest management
policies; the adjudication of industrial illnesses; the appeal of government pollution control and
remediation orders; the management of waste disposal sites; and major environmental appeals in
British Columbia, Alberta and Ontario on contaminated sites and water and air quality. Blakes
environmental lawyers have advised and represented government agencies and municipal
corporations. As well, Blakes has represented major forestry, mining, oil and gas, electricity, steel,
chemical, waste management, municipal, transportation, food processing and real estate

Estates & Trusts

Blakes has an active estate litigation practice. Together with members of our Estates and Trusts
Group, Blakes lawyers have been involved with challenges to the validity of wills on behalf of both
claimants and estate trustees. Blakes regularly advises clients in disputes about the interpretation
of wills and trusts, as well as issues arising from the administration of estates, motions for the
advice and direction of the court, and the passing of accounts. In addition, Blakes lawyers are often
consulted on estate-related issues such as incompetency and guardianship matters, and claims
involving the use and misuse of powers of attorney.

Information Technology

Blakes litigators have extensive experience in disputes involving computer software and hardware,
and other information technology, both in the courts and in arbitrations and other forms of
Alternative Dispute Resolution (ADR). In addition to their experience, our litigators have available
the full resources of the Firm including commercial and intellectual property lawyers, patent agents
and paralegals who have professional qualifications in fields such as engineering, computer science
and mathematics. Blakes vigorously protects its clients' rights in these areas and is often involved
in injunction applications and applications for orders to protect confidential information. Blakes is
general counsel to the Canadian Internet Registration Authority and regularly provides litigation
services on disputes relating to domain name registrations wherever the name may have been


Blakes has an extensive insurance litigation practice. The Firm acts for both insureds and insurers,
providing coverage opinions and representation in claims involving all types of insurance coverages.
These include: life and disability, automobile, property, business interruption, marine,
environmental impairment, financial institution bonds, crime and fidelity, letters of credit, surety,
commercial general liability, Builders Risk, directors and officers, and professional errors and
omissions. Our litigators have particular expertise in defending engineers, accountants, lawyers and
product manufacturers. They also have experience with complex property and business interruption
claims (IMC v. Commonwealth). In addition, the Firm defends insurers in punitive damages and bad
faith claims. Blakes represents insurers and their associations in hearings before administrative
tribunals and before government commissions on matters affecting their day-to-day business
activities, as well as before all levels of Canadian courts in cases involving insurance law issues of
national importance. For example, Blakes lawyers represented the Insurance Bureau of Canada at
the Ontario Automobile Insurance Board rate and no fault hearings in the late 1980s, and as
intervenor in Hernandez v. Palmer, Myer v. Bright and Pilot v. Whitten. Our lawyers also provide
general litigation, regulatory compliance and contract or policy interpretation advice to insurers and
representation in commercial disputes involving life and segregated fund products, agency,
insurance broker and other insurance relationships.

Intellectual Property

The lawyers in Blakes Intellectual Property Group are active in all aspects of intellectual property
litigation. The Firm represents clients before administrative boards, the provincial superior courts,
the Federal Court of Canada and on appeals to the various appellate courts. The businesses that
Blakes serves have immense investments in and dependence upon intellectual property and
technology. Blakes has a large Intellectual Property Group whose members offer counsel not only to
our ongoing corporate clients, but also to other clients and law firms who retain them for their
specific expertise in this area of practice. They have experience and training in a wide variety of
technical fields and many are registered patent and trade-mark agents. The Group's activities
include all aspects of the enforcement of patent, trade-mark, copyright and other intellectual
property rights. Blakes litigators are experienced in defending and obtaining all classes of
injunctions relating to intellectual property disputes. In the pharmaceutical area, Blakes litigators
have assisted clients with matters before the Therapeutic Products Directorate and the
Pharmaceutical Advertising Advisory Board, have appeared before the Patented Medicine Prices
Review Board and represented clients in proceedings arising out of the Patented Medicines (Notice
of Compliance) Regulations.

Labour & Employment

Lawyers in Blakes Labour and Employment Law Group are broadly experienced in all facets of
litigation and dispute resolution relating to employment and associated matters. This includes: the
conduct of trials and appeals in wrongful dismissal actions; the representation of disputants in
pension and other benefits litigation; the prosecution of injunction applications in connection with
labour disputes and the application of restrictive covenants in employment agreements; the
representation of clients in labour arbitrations and labour relations board proceedings. Blakes also
represents clients regularly in adjudications or prosecutions under employment standards, human
rights, pay and employment equity, workers' compensation, occupational health and safety, and
related legislation. In addition to conciliation and mediation activities, and the negotiation of
collective agreements for our clients, Blakes labour and employment lawyers are also involved in
dispute resolution through fact-finding, arbitration and mediation in virtually all aspects of their


Blakes has a pre-eminent media law practice. We act for Canada’s largest daily newspaper, as well
as for book publishers, broadcasters and many smaller media organizations. No firm in Canada has
more expertise on libel, freedom of the press and access to information issues than Blakes. Lawyers
in our Toronto office provide pre-publication advice to clients 24 hours a day, seven days a week.
Blakes has represented the Canadian Newspaper Association when it has intervened in cases in the
Supreme Court and elsewhere. Blakes has successfully defended the media in numerous libel trials
– both jury and non-jury – and we have obtained important judgments from appellate courts on
copyright, freedom of information and libel. Some of our recent leading cases include R. v.
Mentuck, R. v. Vancouver Sun, Smith v. Jones, Hill v. Church of Scientology (Supreme Court of
Canada case), Pizza Pizza (libel defences), Elliot v. CBC (the "Valour and the Horror" case involving
a successful defense of a class action libel), Allen v. Toronto Star (copyright, fair dealing),
Bernardo/Homolka (publication ban), Just Desserts (publication ban), Ross v. Beutel(intervention in
New Brunswick Court of Appeal on fair comment defense), and Silva v. Toronto Star (libel trial).

Municipal & Planning

Blakes lawyers have extensive experience before the Ontario Municipal Board, the courts and
various special purpose tribunals regarding all aspects of land development, land use regulation,
expropriation and the licensing and regulation of business. Our lawyers regularly offer advice and
practical assistance to clients in order to ensure they have a full understanding of their legal rights
and aid in achieving necessary approvals. Blakes has represented clients at the Assessment Review
Board and Ontario Municipal Board, and in the courts with respect to matters of liability for
assessment and taxation, property valuation and classification, and on municipal tax sale issues.
Blakes lawyers have represented municipal clients before the Courts in litigation concerning
involuntary municipal restructuring. The Firm represents both expropriating authorities and
claimants in the expropriation process, and can ensure that, where a public authority takes private
land, creative and constructive solutions are found to ensure comprehensive compensation.

Pension & Employee Benefits

Blakes litigators have been involved in many of the leading Canadian cases on pension law. These
include: Reichhold Limited v. Wong; Reichhold Limited v. Boyer; Monsanto Canada Inc. v. Ontario;
Amoco Canada Petroleum Company v. Alberta; Allegheny International Canada Ltd. v. Adams;
Firestone Canada Inc. v. Pension Commission of Ontario; Joy Technologies Canada Inc. v. Montreal
Trust; McMaster University v. Robb; Maurer v. McMaster University; Bathgate v. National Hockey
League; Askin v. Ontario Hospital Association; McDonald v. Ontario Hydro; Schmidt v. Air Products
Canada Ltd. (the first Supreme Court of Canada decision concerning pension surplus); Sara Lee
Corp. of Canada v. McNaughton; plus numerous cases argued before pension and benefits
standards regulators. Our lawyers have been at the forefront of pension class actions, representing
corporations against defendant classes.


Blakes litigators have argued many of the leading cases on access to information. We regularly act
for businesses, government institutions, and requestors, assisting in both seeking, and opposing,
the release of information held by government under provincial and federal laws. Blakes has
substantial expertise in this area, and several of our lawyers write and teach on these topics.


Blakes has extensive litigation experience and expertise relating to the tendering and procurement
process. Our lawyers provide advice to bidders, owners, consultants, and private and public
contractors (including the Ontario government and several municipalities) on all aspects of
tendering. We have acted as counsel in such matters before both the courts and the Canadian
International Trade Tribunal. For example, Blakes successfully represented Wang Canada in the first
ruling by a Canadian court that forced the federal government to abide by the contract procurement
provisions of the North American Free Trade Agreement.

Product Liability
Blakes product liability team includes trial lawyers with extensive experience in the defence of
product liability claims and lawyers who regularly provide advice to corporate clients regarding
prevention of products liability claims and related insurance issues. Blakes trial lawyers have been
retained in cases involving such diversified products as: pharmaceutical products, aircraft,
automobiles, beverages, blood products, boilers, chemical products, construction equipment, food
products, medical equipment, manufacturing and chemical production equipment and a broad range
of consumer products, among others. Clients in this area range from Fortune 500 companies to
small and medium-sized producers, manufacturers and distributors. Blakes trial lawyers have
represented, and continue to represent, leading manufacturers provincially and nationally in
product liability claims and class actions related to pharmaceuticals, medical devices, dental
products and consumer goods.

Professional Negligence

Blakes litigators are regularly called upon to represent plaintiffs and defendants in professional
negligence claims involving engineers, accountants, actuaries, lawyers and health care
professionals, and have particular expertise defending engineers, accountants and lawyers. Several
leading cases have been handled by Blakes litigators. Blakes expertise in this area is exemplified by
regular retainers for primary and excess insurers. Further, our Firm represents professionals in
discipline hearings before many professional and regulatory bodies.

Public Sector

Blakes litigators regularly act on behalf of clients from, or in, the public sector. This includes acting
on lawsuits, appearing at commissions (representing government and private sector clients), and
dealing with high-profile public issues. Our lawyers are experienced in dealing with government,
negotiating, opening doors, obtaining information and making submissions to government
committees, boards and commissions. For example, Blakes represented the Aboriginal Chiefs of
Ontario in the Walkerton Inquiry into the safety of Ontario’s drinking water. Our Vancouver office
acted as counsel to the APEC Inquiry. Blakes also represented the Association of the Justices of the
Peace of Ontario in its recent submission and appearances before the Justices of the Peace
Remuneration Commission, which followed our successful representation of Justices of the Peace in
the courts. We recently, and successfully, defended the Toronto Transit Commission in a major
Charter challenge to its provision of transportation services to people with disabilities, and act for
many other public sector entities. Blakes has represented various municipalities in environmental
contamination cases and in litigation over municipal restructuring.

Real Estate

Blakes litigation lawyers have extensive experience and expertise in handling commercial real
estate disputes of all kinds. The range of disputes includes: title problems; mortgage enforcement
and priority disputes; claims for damages and specific performance relating to agreements of
purchase and sale; credit insurance claims relating to mortgages and lines of credit; easement and
adverse possession claims; claims relating to joint ventures and limited partnerships involved in
real estate ventures; commercial tenancies; condominiums; certificates of pending litigation;
cautions; severance issues; zoning and by-law compliance issues; disputes regarding rights of first
refusal; professional negligence claims relating to brokers and agents; and commission disputes.
Blakes litigators work extensively with members of the Firm’s Commercial Real Estate Group, which
is one of the largest in Canada. Blakes real estate litigators also have ready access to expertise on
municipal law, planning and environmental matters.

Restructuring & Insolvency

Our Restructuring and Insolvency Group is a cross-disciplinary team that includes both commercial
and litigation lawyers. Blakes has extensive experience in structuring, negotiating, documenting
and implementing transactions in the insolvency context, in and out of court, and in enforcing
claims of all kinds. Lawyers in this group work closely with lawyers in other practice areas of the
Firm who specialize in tax, securities, environmental, intellectual property and in other issues that
frequently arise in restructurings and insolvencies. Blakes litigators look for effective solutions to
the business problems in each case and have experience in virtually all sectors of the economy.
These include: mining, entertainment, oil and gas, environmental and industrial services,
automotive, manufacturing, forestry, high-tech, health care, communications, transportation,
retailing, financial services and real estate. Blakes lawyers also have specialized litigation
experience in matters such as fraud and the resolution of class actions in bankruptcy.

Tax Litigation

Blakes tax litigation and controversy resolution counsel have considerable experience representing
clients at all levels within the Canada Revenue Agency and other government agencies. Where
resolution is not possible at the administrative level, Blakes acts as litigation counsel before the
courts. Blakes has acted on behalf of clients on a wide range of issues including not only
substantive tax matters, but also procedural matters such as search and seizure, claims for
privilege and requirements to provide foreign-based information. One of our lawyers has recent
experience with respect to Canada Revenue Agency practices and procedures while acting as senior
counsel at the Department of Justice Canada. Blakes also regularly acts as counsel for clients on
trade law matters, including customs, excise and anti-dumping, and in tax disputes arising under
provincial statutes such as provincial income and capital taxes, sales taxes and payroll taxes.
Nigel Campbell
Partner, Toronto Office

                                            Nigel Campbell is a senior Partner in the Litigation Group
                                            in Blakes Toronto. His principal area of practice is
                                            securities and corporate/commercial litigation. He also has
                                            extensive experience in the area of administrative law.
                                            Nigel has developed a specialised broker/securities
                                            defence practice in the civil courts and before the Ontario
                                            Securities Commission.
Direct Dial: 416.863.2429
E-mail: nigel.campbell@blakes.com           Nigel was Law Clerk to Mr. Justice R.A. Ritchie of the
Fax: 416.863.2653                           Supreme Court of Canada in 1980 - 1981. In 1985, Nigel
                                            was an assistant legal counsel to the Estey Commission of
Admitted to the Ontario Bar - 1983          Inquiry into the collapse of the CCB and Northland Banks.
Admitted to the New Brunswick Bar - 1981
LL.M., University of Cambridge - 1982
                                            In 1988-1989, on leave from Blakes, he held the position
LL.B., University of New Brunswick - 1980   of senior investigation counsel for the Ontario Securities

                                            Nigel has been a lecturer in law at the University of Ottawa
                                            and York University, and continues to instruct in the field of
                                            trial advocacy and practice skills. He has frequently
                                            spoken and written in respect to matters of substantive
                                            and procedural law, including shareholder remedies,
                                            practice before the Ontario Securities Commission and
                                            also in connection with the law that governs the brokerage
                                            and securities industry. In 1995, Nigel presented a lecture
                                            on injunction law at the prestigious Law Society of Upper
                                            Canada Special Lectures. In January 1997, Nigel was the
                                            guest of the China Judges Association in Beijing, where he
                                            lectured on Canadian securities enforcement regulation
                                            and litigation. The Canadian Legal Lexpert Directory has
                                            ranked Nigel highly in both the category of securities
                                            litigation and the category of corporate commercial


Jeff Galway
Partner, Toronto Office

                                        Jeff Galway is a litigation Partner at Blakes Toronto. Since
                                        his call to the Bar in 1988, Jeff has appeared before all
                                        levels of courts in Canada, up to and including the
                                        Supreme Court of Canada, in various provincial superior
                                        courts (Ontario, British Columbia and Alberta), the Federal
                                        Court of Canada and the Tax Court of Canada. In
                                        addition, Jeff has appeared as counsel before a number of
Direct Dial: 416.863.3859               administrative tribunals including the Competition Tribunal,
E-mail: jeff.galway@blakes.com
                                        the Financial Services Tribunal, and the National
Fax: 416.863.2653
                                        Transportation Agency.
Admitted to the Ontario Bar - 1988
LL.B., Osgoode Hall Law School - 1986
                                        Jeff has considerable experience with the Ontario Class
B. Comm., Memorial University of
  Newfoundland - 1983                   Proceedings Act, both as counsel and having written and
                                        spoken extensively on this topic to professional groups
                                        both inside and outside the firm.

                                        In addition, Jeff has extensive experience as counsel
                                        before the Financial Services Tribunal (and its
                                        predecessor the Pension Commission of Ontario) and the
                                        Ontario Superior Court on pension matters dealing with
                                        issues such as surplus entitlement, breach of fiduciary
                                        duty, and the right to take contribution holidays. Jeff is
                                        currently counsel to the Association of Canadian Pension
                                        Management in the Monsanto case and will be appearing
                                        in the Supreme Court of Canada in the Spring of next year
                                        to argue against the proposition that the Pension Benefits
                                        Act (Ontario) requires a distribution of actuarial surplus in
                                        a pension plan as at the date of a partial plan wind-up.


William G. Horton
Partner, Toronto Office

                                        William Horton is a senior Partner in the Litigation Group of
                                        the Toronto office where he practises corporate/commercial
                                        litigation and arbitration.

                                        Bill has appeared before all levels of courts up to and
                                        including the Supreme Court of Canada and has served as
                                        both an arbitrator and counsel in commercial arbitrations.
                                        Bill has successfully represented clients in significant cases
                                        involving business and corporate disputes, fraud, lender
                                        liability, international banking disputes, litigation arising from
Direct Dial: 416.863.2290
E-Mail: william.horton@blakes.com       major insolvencies and reorganizations, fiduciary duty and
Fax: 416.863.2653                       good faith obligations, directors and officers liability,
                                        professional liability, insurance disputes, competition
Chartered Institute of Arbitrators
                                        offences, defamation, shareholder disputes, class actions
  Fellowship Course - 1996
Admitted to the Ontario Bar - 1976      and injunctive remedies. He has spoken and published
LL.B., Osgoode Hall Law School - 1974   extensively on commercial litigation topics.

                                        Bill is a fellow of the Chartered Institute of Arbitrators, a
                                        panel member of ADR Chambers and of the ADR Institute of
                                        Ontario. He has been extensively involved in the
                                        International Bar Association (IBA) and is past chair of the
                                        International Litigation Committee of the Section on
                                        Business Law.

                                        Bill currently serves as a member of the board of directors of
                                        the Canadian branch of the International Law Association.

                                        Bill recognized in The International Who's Who of Business
                                        Lawyers, Euromoney's The Best of the Best, as one of the
                                        leading lawyers in Canada, and The Canadian Legal
                                        Lexpert Directory and is published by Law Business


Ben Jetten
Partner, Toronto Office

                                      Ben Jetten is a Partner practicing Litigation in Blakes
                                      Toronto. Since his admission to the Ontario Bar in 1982,
                                      Ben has acted as counsel on a wide range of cases
                                      including specialty areas within the field of administrative
                                      law. Ben has appeared before all levels of courts in Ontario
                                      and in the Federal Court of Canada. In addition, Ben has
                                      acted on cases before a number of administrative tribunals
                                      and private tribunals including the Environmental Appeal
Direct Dial: 416.863.2938             Board, the Joint Board under the Consolidated Hearings
E-Mail: ben.jetten@blakes.com         Act, the Ontario Municipal Board, the Niagara Escarpment
Fax: 416.863.2653
                                      Commission, the Canadian Radio-Television and
Admitted to the Ontario Bar - 1982    Telecommunications Commission (the CRTC), the former
LL.B., University of Toronto - 1980   Ontario Telephone Services Commission, arbitrators and
B.A., University of Toronto           the discipline panel of professional associations
                                      responsible for regulation of their members.

                                      Ben has assisted clients with litigation and administrative
                                      hearing work dealing with disputes or issues involving First
                                      Nations law, environmental law, telecommunications law,
                                      municipal law, corporate, commercial and real property
                                      law, constitutional and public law, tax law, insurance law,
                                      trust law and employment law.

                                      Litigation for First Nations. For many years, Ben has
                                      represented First Nations in significant, complex litigation
                                      including pursuing remedies against the Canadian and
                                      Ontario governments connected with fiduciary obligations
                                      owed by the Crown to properly deal with and manage First
                                      Nations lands and monies, dealing with First Nations
                                      governance and contracting issues, tax law issues relating
                                      to First Nations and a range of other matters relating to
                                      First Nations legal interests.

Ben Jetten
Partner, Toronto Office

                          Ben is recognized in The Canadian Legal Lexpert Directory
                          as recommended legal counsel in Ontario in the area of
                          First Nations law.

                          Environmental Litigation. Ben has a wide-ranging and
                          complex environmental litigation practice dealing with
                          issues related to contaminated land, waste management
                          and disposal, and air and water pollution. Ben's experience
                          has included the representation of municipalities and
                          companies in pursuing and defending civil claims for
                          environmental damages in class actions, investigations
                          and prosecutions under environmental laws, advising and
                          negotiating on waste management and disposal issues,
                          the remediation of contaminated property and compliance
                          issues under environmental legislation, and environmental
                          assessment processes and approvals relating to waste
                          management and disposal.

                          Municipal and Real Property Litigation. Ben has
                          represented, and continues to represent, municipalities
                          and private interests in connection with municipal law and
                          real property litigation including matters of municipal
                          restructuring, the assumption of local powers by an upper
                          tier municipality, municipal jurisdiction issues, the
                          disbanding of a municipal police force, municipal conflict of
                          interest and freedom of information matters, proceedings
                          dealing with licensing, zoning and official plan issues,
                          litigation in connection with the restructuring of public
                          utilities, and litigation arising out of the purchase and sale
                          of industrial, commercial and apartment properties.

                          Telecommunications Litigation. Ben has acted for a
                          number of telecommunications common carriers on a
                          variety of matters before the CRTC, the former Ontario
                          Telephone Services Commission, the Federal Court and in
                          the Ontario Courts. These cases have included

Ben Jetten
Partner, Toronto Office

                          proceedings before the CRTC concerning the
                          establishment of a national high cost service fund, the
                          establishment of a regulatory regime applicable to
                          Ontario's independent telecommunications carriers and the
                          establishment of regulated rates of return, and the
                          contribution regime, carrier access tariff agreements and
                          settlement fund arrangements for long distance revenue
                          settlements, the large company telecom regulatory
                          framework review proceeding, proceedings in the Federal
                          Court and before the CRTC related to third party publisher
                          access to telephone systems' database for the purpose of
                          publishing competing telephone directories.

                          Ben was counsel to the trustee of a large independent
                          Ontario local exchange telephone system in connection
                          with extensive litigation in the Courts of Ontario arising
                          from the uncertainty of the ownership of the system and
                          the eventual restructuring of the system into a municipally
                          owned public utility.

                          Ben represented a number of Ontario independent
                          telecommunications common carriers in obtaining the
                          necessary regulatory approvals to bring those carriers
                          under co-operative corporation ownership structures.

                          Corporate/Commercial/Tax and Other Litigation. Ben
                          has represented clients with litigation, arbitrations and
                          administrative hearings in a wide range of other areas
                          requiring dispute resolution, including contract disputes,
                          real property disputes, shareholder oppression disputes,
                          cases involving claims of fraudulent and negligent
                          misrepresentations, commodity tax litigation, litigation
                          involving provincial tax legislation, employment law, and
                          the prosecution of discipline proceedings before an
                          administrative body.

Glenn F. Leslie
Partner, Toronto Office

                                      Glenn Leslie is a Partner in the litigation and competition/
                                      antitrust departments at Blakes, where he practises
                                      competition, regulatory and commercial litigation. Glenn
                                      received his law degree from the University of Toronto
                                      Law School (LL.B). He was called to the Bar of Ontario in
                                      1974, and to the Alberta Bar in 1984.

                                      Glenn has appeared as lead counsel in civil and criminal
Direct Dial: 416.863.2672             matters before all levels of court in Ontario, the Federal
E-mail: glenn.leslie@blakes.com
                                      Court and the Supreme Court of Canada. He also
Fax: 416.863.2653
                                      appears regularly before regulatory tribunals including the
Admitted to the Alberta Bar – 1984    Ontario Energy Board, the Competition Tribunal and the
Admitted to the Ontario Bar – 1974
                                      Ontario Securities Commission.
LL.B., University of Toronto – 1972

Competition Law                       Glenn has extensive competition/antitrust law experience.
                                      He was successful counsel in leading merger (Southam
                                      and Hillsdown) and monopoly (Tele-Direct) prosecutions
                                      under the Canadian Competition Act. He has acted in
                                      numerous criminal investigations and prosecutions
                                      involving allegations of conspiracy, bid-rigging, resale
                                      price maintenance, misleading advertising and other
                                      deceptive trade practices. Glenn regularly advises
                                      Canadian and international clients on the conduct of
                                      merger and other investigations under the provisions of
                                      the Competition Act. He has also acted as counsel in
                                      class actions involving antitrust issues and international

Regulatory Law                        Glenn has acted as lead counsel to a large Canadian
                                      public utility in rate and other regulatory hearings before
                                      the Ontario Energy Board for over 10 years. This work
                                      has involved appearances in numerous rates, facilities and

Glenn F. Leslie

                          other related proceedings. He has also been extensively
                          involved in the legal and economic issues arising from the
                          restructuring of gas and electricity markets in Canada.
                          Glenn has extensive experience as counsel on behalf of
                          regulated clients in judicial review and other civil

Commercial Litigation     Glenn has appeared as counsel in numerous commercial
                          cases involving contract, securities, pension, insurance,
                          product liability and other matters. Recently he
                          successfully represented the interests of the Québec
                          government before the Supreme Court of Canada in
                          proceedings arising out of the take-over of Asbestos Corp.
                          Glenn has also acted as counsel in commercial
                          arbitrations including international arbitrations and related
                          appeals and in trade related proceedings before the
                          Canadian International Trade Tribunal.

Professional Activities   Glenn is a member of the Advocates’ Society in Ontario,
                          and the Competition and Antitrust Section of the Canadian
                          and American Bar Associations. He is a past chair of the
                          Canadian Section’s Competition Law Conference.

Honours                   Glenn is recognized by various international surveys as a
                          leading competition lawyer in Canada, including The
                          Canadian Legal Lexpert Directory, Chambers Global: The
                          World’s Leading Lawyers, Euromoney’s Guide to the
                          World’s Leading Competition and Antitrust Lawyers and
                          Global Counsel 3000.


Paul B. Schabas
Partner, Toronto Office

                                             Paul Schabas is a senior litigation Partner in the Toronto
                                             office. His practice emphasizes constitutional, media and
                                             public law, including criminal and administrative law. Paul
                                             has been counsel on major constitutional public law cases
                                             dealing with Charter and human rights issues, division of
                                             powers and judicial independence. He has appeared many

Direct Dial: 416.863.4274                    times before the Supreme Court of Canada, including as
E-Mail: paul.schabas@blakes.com              counsel to the Canadian Foundation for Children, Youth
Fax: 416.863.2653                            and the Law on its challenge to the corporal punishment

Called to the Bar of Ontario – 1986          defence. He has argued over 30 appeals in the Ontario
LL.B., University of Toronto – 1984          Court of Appeal. Paul has defended many libel trials and
B.A. (Hons.), University of Toronto – 1981
                                             frequently appears before courts and tribunals on behalf of
                                             the media on freedom of the press and access to
                                             information issues. He is recognized by The Canadian
                                             Legal Lexpert Directory as a "leading practitioner" in both
                                             media and defamation law, and in public law.

                                             Paul also has extensive experience in corporate and
                                             commercial litigation - trials and arbitrations. He began his
                                             career as a criminal defence lawyer, and continues to act
                                             for corporations and individuals on criminal and regulatory
                                             matters, such as fraud, competition offences, tax evasion
                                             and customs cases. He frequently deals with search
                                             warrants and responding to government investigations,
                                             and has prosecuted and defended professional and
                                             academic discipline cases.

                                             Paul is also active outside the courtroom. From 1987 to
                                             1992, he taught part-time at the University of Toronto.
                                             Since 1993, Paul has taught trial practice at Osgoode Hall
                                             Law School, York University, and to lawyers at the annual
                                             Intensive Trial Advocacy Workshop and at other continuing

Paul B. Schabas

                  education seminars. Paul has published numerous articles
                  dealing with media, constitutional, criminal and human
                  rights issues. He is a frequent speaker at conferences. In
                  June 2000, he delivered one of the Law Society's "Special
                  Lectures" on constitutional law (freedom of expression),
                  and in April 2003 delivered another "Special Lecture" on
                  evidence in Charter cases, both of which were
                  subsequently published.

                  Paul is a past chair of the Canadian Bar Association -
                  Ontario's Constitutional and Civil Liberties Section. He has
                  appeared before parliamentary committees and is often
                  interviewed by the media. He is a director of the Canadian
                  Civil Liberties Association, vice-president of Pro Bono Law
                  Ontario and on the executive of Ad Idem (Advocates in
                  Defence of Expression in the Media), an organization of
                  Canadian media lawyers. He is a former director of the
                  National Youth Orchestra of Canada and the Family
                  Service Association of Toronto. Paul is also a member of
                  the International Advisory Panel on Free Expression of
                  Interights in London, England, through which he has
                  submitted expert briefs on Canadian law to the European
                  Court of Human Rights.

                  Within Blakes, Paul is a member of the Firm's Executive
                  and Partnership Committees. He has been the Co-chair of
                  the Litigation Group in the Toronto office, and is also Chair
                  of the Firm's new Pro Bono Committee. He was Chair of
                  Blakes Student Committee (recruitment and supervision of
                  the Firm's articling and summer students) from 1995 to
                  1999, and has served on the Partner Compensation
                  Committee (1998-2000).

Mary Jane Stitt
Partner, Toronto Office

                                            Mary Jane Stitt is a Partner practising general commercial
                                            litigation in the Toronto office, with an emphasis on
                                            insurance law, product liability and professional
                                            negligence. Her litigation practice also includes indemnity
                                            claims under share or asset purchase agreements,
                                            franchise, shareholder and partnership disputes, and
                                            breach of fiduciary duty/confidence claims against directors
                                            and officers.
Direct Dial: 416.863.2940
E-mail: maryjane.stitt@blakes.com
                                            Mary Jane has a broad-ranging insurance practice which
Fax: 416.863.2653
                                            includes: coverage opinions; acting as plaintiff's counsel in

Admitted to the Ontario Bar - 1982
                                            litigation involving life and disability, automobile, property,
LL.B., Osgoode Hall Law School - 1980       all risk, marine, environmental impairment, financial
B.A. (Hon.), University of Toronto - 1977
                                            institution bonds, crime insurance policies, commercial
                                            general liability, Builders Risk and other construction-
                                            related policies, directors and officers, professional errors
                                            and omissions and executive risk policies; acting as
                                            defence counsel for insurers in respect of punitive
                                            damages and bad faith claims; and general litigation,
                                            regulatory and contract advice to insurers including policy
                                            interpretation issues and representation in disputes
                                            involving segregated funds, agency, insurance broker and
                                            other commercial relationships.

                                            Mary Jane's product liability experience is primarily
                                            defence-related for manufacturers and distributors of a
                                            broad range of regulated and non-regulated products,
                                            including computer hardware and software,
                                            telecommunications equipment, electrical devices,
                                            automotive after market, veterinary and animal biological,
                                            poultry and livestock, construction materials, household

Mary Jane Stitt

                  goods and appliances, food additives, industrial
                  machinery, adhesives and elevating devices.

                  Mary Jane's professional negligence experience includes
                  defence work involving claims against lawyers and
                  representation of plaintiffs in actions against accountants,
                  auditors, real estate appraisers, real estate agents,
                  insurance brokers, surveyors, software vendors and
                  consultants, architects, engineers and veterinary
                  practitioners. She was counsel to CIBC, Royal Bank and
                  National Bank in a $1.2-billion professional negligence
                  claim against an English firm of solicitors, Clifford Chance,
                  arising out of the Canary Wharf project and O&Y
                  insolvency. Mary Jane has extensive experience in
                  conflicts of law issues arising out of multi-jurisdictional
                  professional negligence, product liability and insurance

                  Mary Jane has extensive experience in the organization
                  and conduct of forensic and fraud investigations in
                  conjunction with leading forensic accountants; preparation
                  of fidelity bond claims and other insurance claims;
                  preparation of investigative reports and advising senior
                  officers, directors, liquidators and trustees regarding
                  actions for recovery of assets and insurance proceeds;
                  conduct of subsequent litigation and liaising with law
                  enforcement officials and regulators in respect of criminal
                  and quasi-criminal prosecutions arising out of forensic

                  Her alternative dispute resolution experience includes
                  acting as counsel in various types of commercial
                  arbitrations and mediations of multi-party professional
                  negligence and complex commercial disputes.

Mary Jane Stitt

                  Mary Jane has been cited as a leading Canadian product
                  liability lawyer in Law Business Research's The
                  International Who's Who of Product Liability Lawyers 1997,
                  The International Who's Who of Product Liability Defence
                  Lawyers, 2nd edition, 2001, 3rd edition, 2002, 4th edition,
                  2003 and in The International Who's Who series Web site.
                  She has been listed in The Canadian Legal Lexpert
                  Directory (1998) in the "repeatedly recommended"
                  category for leading Toronto practitioners in the products
                  liability section and the professional negligence section.

                  Mary Jane was chair of the National Insurance Law
                  Section of the Canadian Bar Association from August
                  2000-2001, and editor of Underwritings, published by the
                  National Insurance Law Section of the Canadian Bar
                  Association, from 1999-2001. She was a director and
                  honourary solicitor for the Family Service Association of
                  Metropolitan Toronto from 1990-1995, and is currently a
                  member of the Canadian Bar Association, the American
                  Bar Association, the American Trial Lawyers Association,
                  The Advocates' Society (Ontario), the International Law
                  Association and the International Association of Defence

                  From 1987-1990, she was an instructor at The Law Society
                  of Upper Canada for the bar admission course in trial
                  advocacy. Mary Jane was also an instructor for the
                  intensive trial advocacy workshop at Osgoode Hall Law
                  School during the summers of 1990-1993, 1995 and 1996,
                  and an instructor and guest performer at The Advocates'
                  Society Institute in Toronto from 1993-1997.


TAB 10

Who We Are

Blake, Cassels & Graydon LLP is one of Canada’s leading business law firms, with over 500 lawyers in
offices in Montréal, Ottawa, Toronto, Calgary, Vancouver, New York, Chicago, London and Beijing. Our
integrated office network gives clients access to the full spectrum of capabilities found throughout the Firm.
Whether an issue is local or multi-jurisdictional, practice area specific or cross-disciplinary, Blakes can
provide solutions at every level.

Blakes has been part of new economies since 1856. We are proud of our 140-year history and the role we
have played in helping clients prosper during that period of tremendous economic and social change. We
understand that our continued success depends on our ability to meet the needs of clients both today and

What We Do

Blakes provides guidance and expertise in virtually every area of business law to a diverse national and
international base of clients. Many of our lawyers are leaders in their respective fields, evidenced by the
fact that Blakes lawyers are “recommended” in Lexpert’s Guide to the Leading 500 Lawyers in almost
every category of law. Our clients include some of the best-known and soon-to-be-known names in
business, ranging from major corporations and financial institutions to start-ups in manufacturing and
knowledge-based industries. To better serve this broad client base, we continue to develop industry
specific teams that combine leading edge experience with industry acumen.

Blakes Montréal

Located in the downtown core, Blakes Montréal was established in the fall of 2001, and is staffed by
practitioners who are recognized leaders in their fields of expertise.

In addition to advising a local base of clients in Québec, our Montréal lawyers also assist Blakes clients
across Canada in managing their business interests in Québec. The scope of Blakes practice in Montréal
is predominantly corporate/commercial law with emphasis on banking, financial services, securities,
mergers & acquisitions, restructuring and insolvency, information technology, pensions and benefits, labour
and employment, real estate, project finance, litigation, intellectual property and taxation.


Blakes Ottawa

Blakes Ottawa is one of the finest law practices in the nation’s capital. Our Ottawa office offers full service
business law for local, national and international clients. Practice areas and industry experience in the
Ottawa office include corporate/commercial, securities, intellectual property and technology, government
procurement, commercial real estate, civil litigation, telecommunications, oil and gas, tax, banking,
insolvency and administrative law. Two of the great strengths of the Ottawa office are the reputation of its
lawyers in the local community and their expertise in all areas of law affecting business clients.

Blakes Toronto

Located in the heart of the city’s financial district, Blakes Toronto provides legal expertise in virtually every
area of business law. We have the scope and flexibility to meet the demands of the most sophisticated
Canadian and international clients. Because of our experience, we have the resources to provide
dedicated client service teams to each and every client. In addition to our practice capabilities, Blakes
Toronto maintains a comprehensive database of precedents and one of the largest private libraries in
Canada. This ensures our clients receive the most up-to-date, sophisticated legal advice, anywhere.

Blakes Calgary

Blakes Calgary has acted on some of the largest and most complex transactions in Western Canada
requiring expert legal advice, sensitivity to clients’ business objectives and a co-operative team approach.
With a complement of over 70 lawyers and 90 support staff, Blakes Calgary has the depth, experience and
resources to provide timely strategic legal services for all types of business transactions and disputes. The
diversified economy of Alberta has enabled the Calgary office to develop a broad business law practice
including corporate/commercial, securities, structured finance, private and public debt, banking, general
commercial, real estate, civil litigation, commercial dispute resolution, labour and employee benefits,
administrative, oil and gas, environmental and tax.

Blakes Vancouver

Blakes Vancouver is one of the leading business law firms in British Columbia. With over 50 lawyers, the
Vancouver office advises B.C. corporations and major Canadian international corporations with west coast
interests on a broad range of business issues including corporate and commercial matters, securities,


financial services, real estate, tax, mining, forestry and natural resources, government, environmental, First
Nations and labour and employment. The office also boasts a strong litigation practice, with particular
emphasis on corporate and commercial matters, construction law, First Nations litigation, insolvency and
administrative matters.

Blakes U.S.  New York and Chicago

Blakes New York and Blakes Chicago were established in the spring of 2004 to assist U.S.-based clients
wishing to conduct business in Canada, whether by building, investing in, or acquiring and operating
Canadian businesses. We also assist our Canadian clients conducting business in the U.S., including
facilitating access to the U.S. capital markets. Our New York office maintains a corporate finance, mergers
and acquisitions, securities regulation and financial services practice providing Canadian legal advice to
U.S. and international corporations, financial institutions, venture capital and private equity investors,
investment dealers and professional advisers.

Blakes London

Blakes London advises Canadian clients with interests in the U.K., Europe and emerging markets. The
London office is well known for its representation of corporations in the high technology, oil and gas and
mining sectors. In addition, lawyers in the London office assist businesses considering Canadian
acquisitions, joint ventures and financings, as well as advising on all aspects of Canadian competition, tax,
securities, trade and business law.

Blakes Beijing

Blakes is one of only two Canadian national law firms with an office in Beijing. Blakes officially opened its
Beijing office in October 1998. Our China Practice Group, made up of three lawyers resident in our Beijing
office and a team of lawyers in Canada, is able to advise clients on a variety of aspects of doing business
in China including establishing representative offices, structuring and documenting joint ventures and
wholly-owned foreign enterprises, conducting due diligence, arranging intellectual property protection and
assisting in dispute resolution.


Professional Affiliations

Our international capabilities are enhanced by our charter membership in the largest non-exclusive
international association of law firms (Lex Mundi) with member firms in over 160 jurisdictions.

Blakes is also an advisory member of Techlaw Group, Inc., an international network of 18 major law firms
in the U.S., Canada and Western Europe, whose primary mission is to advance clients’ interests in all
areas of technology-related business.

In early 2003, Blakes established a marketing alliance in China, known as the “China Alliance”, with three
U.S. law firms that also have significant Chinese practices – Armstrong Teasdale (Missouri), Butzel Long
(Michigan) and Michael Best & Friedrich (Wisconsin). With clients doing business with customers world-
wide, we are able to arrange superior legal counsel virtually anywhere as needed.



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