SAMPLE BALLOT ONLY Referendum on Law Society practice fee for 2005 The Benchers of the Law Society have called for this referendum in order to give all members the opportunity to vote on an important question that has been an issue at the Law Society Annual General Meeting for the past several years and the subject of several recent lawsuits against the Society. That issue is whether the Law Society should require all practising lawyers to pay an amount equivalent to the Canadian Bar Association (CBA) membership fee, whether or not they are members of the CBA. In order to give members an opportunity to make a final decision in the referendum, the Benchers determined that the members should set the fee for 2005 in final form by referendum. That requires a majority of the members voting in the referendum to vote in favour of a resolution setting the fee. For that reason, the Benchers have proposed two alternative resolutions to set the 2005 practice fee. Both are based on the amount of $980.50 that the Benchers have determined is required to operate the Law Society and its programs for 2005. The Benchers recommend that members vote for one of Resolution A or Resolution B. Resolution A would require practising lawyers to pay the amount recommended for Law Society purposes ($980.50) plus $497.70 ($293.70 for members in their first five years of practice), which is equivalent to the CBA membership fee, as part of the mandatory fee, for a total of $1,478.20 or $1,274.20. Resolution B would require practising lawyers to pay a fee at the amount recommended for Law Society purposes ($980.50) and would not include an amount equivalent to the CBA membership fee. If you are in favour of requiring all practising lawyers to pay an amount equivalent to the CBA membership fee, vote for Resolution A. If you are not in favour of requiring all practising lawyers to pay an amount equivalent to the CBA membership fee, vote for Resolution B. Members also have the option of voting not to approve either resolution in this referendum. If neither fee resolution achieves a majority, the decision on the practice fee for 2005 will have to be made at the AGM in September. Vote by indicating your preference at the bottom of the page: RESOLUTION A (mandatory CBA fee) WHEREAS: 1. The Benchers have determined that the amount of $980.50 per practising lawyer is required to maintain and operate the programs of the Law Society for the year 2005; 2. The Canadian Bar Association ("CBA") membership fee is as follows: $497.70 for lawyers who have been in practice five full years or more; $293.70 for lawyers who have been in practice less that five full years; and 3. The Benchers have resolved that, if this resolution is passed, all money collected as "an amount equivalent to the CBA fee" will be remitted to the CBA (subject to the decision of the BC Court of Appeal in Gibbs v. The Law Society and CBA); BE IT RESOLVED THAT, for the practice year commencing January 1, 2005, the practice fee be set, pursuant to section 23(1)(a) of the Legal Profession Act, at $1,478.20 for lawyers who have been in practice five full years or more; $1,274.20 for lawyers who have been in practice less that five full years. RESOLUTION B (voluntary CBA fee) WHEREAS the Benchers have determined that the amount of $980.50 per practising lawyer is required to maintain and operate the programs of the Law Society for the year 2005; BE IT RESOLVED THAT, for the practice year commencing January 1, 2005, the practice fee be set, pursuant to section 23(1)(a) of the Legal Profession Act, at $980.50 ________________________________________ I vote in favour of (vote for one only): RESOLUTION A (mandatory CBA fee)  [] RESOLUTION B (voluntary CBA fee)  [] NOT SETTING A PRACTICE FEE IN THIS REFERENDUM []

The new trust administration fee, approved by the Benchers earlier this year to fund Law Society trust assurance initiatives, will come into effect on October 1, 2004, instead of on July 1, 2004 as originally scheduled. The Benchers are expected to consider new Rules to implement the fee at their meeting in June, and the staff intends to issue an interpretation bulletin on the fee, to be available on the Law Society website in July.

Beginning October 1, 2004, BC lawyers who maintain one or more trust accounts will be required to remit to the Law Society a $10 trust administration fee for each trust transaction (or series of trust transactions relating to one client matter) over $5,000.

The proceeds of this trust administration fee (TAF) will fund various Law Society trust administration programs, including the audit and investigations program, the custodianship program and a new program of trust reports that will replace the Form 47 accountant's report over the next year. The funding of these trust initiatives through the TAF will be on a go-forward basis.

In the future it is possible that a portion of the fee may also be allocated towards the new innocent insured coverage now provided by the Lawyers Insurance Fund. If a portion of the trust administration fee is allocated as a contribution towards the innocent insured coverage, this would be on a go-forward basis only (not to pay any claims made against the Special Compensation Fund). Any such allocation would result in lawyers who carry out trust transactions in effect contributing a greater portion of the overall risks associated with those transactions.

The Law Society's trust administration programs are important in monitoring the proper handling of trust funds within the profession. To date, all practising lawyers have funded these programs. However, since the programs relate to lawyers who hold trust funds and carry out trust transactions, it is appropriate for those lawyers to bear a larger portion of the overall expense. The Benchers recognize, however, that lawyers will need to adopt administrative procedures to calculate and remit the fee.

Lawyers will be asked to report the fees they owe for the quarters ending March 31, June 30, September 30 and December 31, and to remit those fees by the end of the following month. A penalty of 5% plus interest at a prescribed rate will apply to late payments. As the TAF is not scheduled to take effect until October 1, 2004, the first reporting period would end December 31, with the first remittance due January 31, 2005.

The Credentials Committee has announced that law firms with an office in the downtown core of Vancouver (west of Carrall Street and north of False Creek) must keep open all offers of articling positions they make this year until at least 12:00 noon on Monday, August 16, 2004.

This date is set each year pursuant to Rule 2-31 to ensure students have an opportunity to consider more than one firm’s offer in interviewing for articles. The rule applies to offers made to second-year or first-year law students, but not to offers to third-year law students or offers of summer positions (temporary articles).

Rideout elected Bencher for Westminster

In what proved to be a tightly contested by-election on May 4, Gregory M. Rideout was elected a Bencher for Westminster District in the 8^th round of a preferential ballot in a field of nine candidates. He now joins Westminster Benchers Grant C. Taylor and Carol W. Hickman at the Benchers table for the balance of the 2004-2005 term, replacing Peter J. Keighley, QC who was appointed a master of the BC Supreme Court earlier this spring.

Called to the bar in 1979, Mr. Rideout practises criminal law with Rideout Riddell in Coquitlam.

Among his commitments to the profession, Mr. Rideout has served as Secretary-Treasurer, Vice-President and President of the New Westminster Bar Association, as Vice-chair and Chair of the CBA (BC Branch) New Westminster Criminal Justice Section, as a member of the Tariff Review Committee of the Legal Services Society and as a guest lecturer for CLE and PLTC.

Kamloops Bencher Robert W. McDiarmid, QC has been acclaimed as the Law Society’s new Second Vice-President for 2004.

The Benchers earlier elected Mr. McDiarmid to serve in the role on an interim basis, after First Vice-President Peter J. Keighley, QC was appointed a BC Supreme Court master in February and Victoria Bencher Ralston S. Alexander, QC assumed the office of First Vice-President. As the Benchers’ nominee for the position for the balance of 2004, and with no further nominations received under Rule 1-3(6), Mr. McDiarmid is elected to the position of Second Vice-President by acclamation and will assume the position of First Vice-President in 2005 and President in 2006.

A partner with Morelli Chertkow in Kamloops, Mr. McDiarmid practises primarily civil litigation, with emphasis on construction and commercial issues, and in the fields of employment law, administrative law and the law of professional negligence. Since first elected a Bencher in 1998, Mr. McDiarmid has chaired the Special Compensation Fund, Audit and Practice Standards Committees, co-chaired the Pro Bono Initiative Task Force, served on the Executive Committee, Futures, Credentials and Discipline Committees and participated on the Trust Assurance Reform Task Force and Libraries Task Force. His various community commitments have included past service as chair of the BC Housing Management Commission, as trustee of the Board of Directors of Royal Inland Hospital and as a director of Thompson County Community Futures.

On April 2 the Benchers adopted a new financial rule to ensure BC lawyers are at the forefront of the fight against money laundering. The new rule takes effect on May 7, 2004.

Under new Rule 3-51.1 (set out below), lawyers are prohibited from accepting $10,000 or more in cash, other than in those circumstances in which the lawyer receives the funds from a law enforcement agency; pursuant to a court order; in the lawyer's capacity as executor of a will or administrator of an estate; or as professional fees, disbursements, expenses or bail.

Like the Proceeds of Crime (Money Laundering) and Terrorist Financing Act regulations, the new rule defines a cash transaction as the receipt of $10,000 or more in cash in a single transaction or the receipt of two or more cash amounts in a 24-hour period that total $10,000 or more. Clients who wish to deposit $10,000 or more in cash with a lawyer will be required to convert the cash into negotiable instruments through a financial institution before depositing the money with a lawyer.

PC(ML)TFA regulations require all professionals who accept $10,000 or more in cash to report the transaction to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). Lawyers are currently exempt from PC(ML)TFA reporting requirements after the Law Society of BC, along with the Federation of Law Societies of Canada, obtained an injunction from the BC Supreme Court in November, 2001. The law societies argued that the PC(ML)TFA violated the constitution because it required lawyers to report privileged client matters to the government, contrary to the concept of an independent legal profession. The BC Supreme Court ordered that lawyers be exempt from the reporting requirements of this legislation until the constitutional issue could be heard. The BC Court of Appeal upheld the decision, and the superior courts of several other provinces granted similar injunctions.

The federal government later agreed to be bound by the exemption in all Canadian jurisdictions until the court case is concluded. The trial is set for November, 2004. A number of law societies across the country are now considering rules similar to Rule 3-51.1.

While there are few cases of lawyers knowingly laundering money on behalf of criminal or terrorist organizations, the Law Society of BC recognizes that the legal profession must take steps to prevent money laundering or being led unwittingly into advancing criminal schemes. Rule 3-51.1, along with longstanding Law Society rules prohibiting lawyers from engaging in illegal activity, will ensure that BC lawyers effectively combat money laundering without the need for government intrusions into lawyer-client privilege and confidentiality.

New Rule 3-51.1 reads:

Cash transactions

3-51.1 (1) This Rule applies to a lawyer when engaged in any of the following activities on behalf of a client, including giving instructions on behalf of a client in respect of those activities:

(a) receiving or paying funds, other than those received or paid in respect of professional fees, disbursements, expenses or bail;

(b) purchasing or selling securities, real property or business assets or entities;

(c) transferring funds or securities by any means.

(2) This Rule does not apply to a lawyer when

(a) engaged in activities referred to in subrule (1) on behalf of his or her employer, or

(b) receiving or accepting currency

(i) from a peace officer, law enforcement agency or other agent of the Crown,

(ii) pursuant to a court order, or

(iii) in his or her capacity as executor of a will or administrator of an estate.

(3) While engaged in an activity referred to in subrule (1), a lawyer must not receive or accept an amount in currency of $10,000 or more in the course of a single transaction.

(4) For the purposes of this Rule,

(a) foreign currency is to be converted into Canadian dollars based on

(i) the official conversion rate of the Bank of Canada for that currency as published in the Bank of Canada’s Daily Memorandum of Exchange Rates in effect at the relevant time, or

(ii) if no official conversion rate is published as set out in paragraph (a), the conversion rate that the client would use for that currency in the normal course of business at the relevant time, and

(b) two or more transactions made within 24 consecutive hours constitute a single transaction if the lawyer knows or ought to know that the transactions are conducted by, or on behalf of, the same client.

This Rule will be distributed to the profession in an upcoming Member’s Manual amendment package.

The Benchers have decided in principle to permit firms to use screens to overcome imputed conflicts in some circumstances. The Benchers will consider draft changes to the Professional Conduct Handbook to give effect to the decision later in the year.

The decision is to permit firms to act against current clients in related matters where confidential information is in issue, provided the information is screened and the affected clients consent. Firms will also be permitted to act against former clients on related matters without client consent if the firms can establish that they can meet criteria similar to those that govern the representation of clients when lawyers transfer from one firm to another. Those situations are currently addressed in Chapter 6, Rule 7.4 of the Professional Conduct Handbook and, among other requirements, stipulate that a firm must establish that the representation is in the interests of justice and that confidential information is appropriately screened.

The changes will not, however, permit a client to consent to the use of screens to enable a law firm to act on both sides of the same matter or to consent to the same lawyer acting for and against the client in any matter.

The changes with respect to current clients will permit lawyers to meet the requirements of Chapter 6, Rule 6.3(b) of the Handbook through the use of screens. Clients will still be required to consent to the representation under Rule 6.3(a) and will also have to consent to the screening arrangements. The changes with respect to former clients will permit lawyers to fulfil the requirements of Rule 7(b) through the use of screens, if the lawyer can meet the same standard as exists when lawyers transfer from one firm to another, as currently set out in Rule 7.4.

These Rule changes will allow clients a wider choice of counsel by mitigating the general rule on imputed conflicts. That rule, both from a professional responsibility and legal standpoint, is that the conflicts of one lawyer are to be treated as conflicts for every member of that lawyer’s firm. As noted in Lawyers and Ethics by Gavin MacKenzie, "Lawyers who practise together are permitted to share confidential information, and may have ready access to one another’s files. They are bound together also by the ties of finance, friendship and loyalty."

The imputation rule and the possibility that lawyers may, in some circumstances, be able to use screens to overcome it has been considered in a number of cases, most notably by the Supreme Court of Canada in MacDonald Estate v. Martin (1990) 3 SCR 1235 (Martin v. Gray). In that case the Court considered whether a disqualifying conflict existed when a lawyer changed firms and possessed confidential information that, if used by the new firm, could damage the interests of a client of the lawyer’s former firm. It was held that a court should draw the inference that lawyers who work together share confidences, unless satisfied on the basis of clear and convincing evidence that all reasonable measures have been taken to ensure that no disclosure will occur by the "tainted lawyer" to the member or members for the firm who are engaged against the former client — such as through appropriate screening devices in the firm. Law societies across Canada subsequently implemented rules designed to permit a law firm to continue to act for a client despite the fact that a lawyer joining the firm has confidential information about the client on the other side of the case — by taking steps to ensure the lawyer joining the firm does not disclose confidential information about the case. Those rules are set out as Chapter 6, Rules 7.1 to 7.9 and Appendix 5 of the Professional Conduct Handbook.

The question has since arisen: should similar rules be adopted to cover situations other than those in which lawyers are transferring firms? Several courts have recently considered the scope of imputed conflicts. The law society in Ontario now allows law firms to act against former clients, if there is client consent or if the firm can meet certain standards (similar to those set out in Chapter 6, Rule 7.4 of BC’s Professional Conduct Handbook).

Lawyers who would like further information on these changes should contact Jack Olsen, Staff Lawyer – Ethics, at:

Law Society of British Columbia
845 Cambie Street
Vancouver, BC V6B 4Z9
Tel.: 604 443-5711
Fax: 604 646-5902
Email: jolsen@lsbc.org

As of April 1, 2004 the Land Title Office will accept electronic filings from BC lawyers, notaries and land title agents of these key documents in land transfers:

• Form A (Freehold Transfer)
• Form B (Mortgage)
• Form C (Charge)
• Form C (Release)
• Declaration
• Property Transfer Tax Electronic Payment Authorization
• Property Transfer Tax Return

The electronic filing of documents is optional, not mandatory.

The Land Title Office form templates are in portable document format (PDF), featuring data fields that can be completed electronically using Adobe Acrobat 6.0. For a test version of the forms, visit the electronic filing system project website at srmwww.gov.bc.ca/landtitle/EFS_web_site/index.htm. The final version of the forms will be available for downloading from the BC Online website (http://www.bconline.com/) beginning April 1.

Most lawyers will already be familiar with viewing PDF documents on the internet with Adobe Acrobat Reader (free software available for download from the Adobe website). Fewer may have used the full version of the Acrobat software, which allows for the creation and completion of PDF documents, including forms.

BC lawyers and their conveyancing staff will need to use version 6.0 of Adobe Acrobat (standard or professional) to complete the forms. The software is available for purchase from software retailers or can be ordered online from BC Online or Adobe (www.adobe.com/acrofamily/main.html).

To begin e-filing, law firms should ensure their practices meet these requirements of the Land Title Office e-filing system:

• Windows operating system, 98SE or higher or Mac OS
• Microsoft Internet Explorer 5.01 web browser
• An internet connection (minimum 56K dial-up; high-speed cable or ADSL is recommended)
• a BC OnLine account, with access to land title applications
• Adobe Acrobat 6.0
• a Juricert-authenticated Adobe Acrobat Signing Certificate
• a set of computer folders configured for LTO electronic filing system files
• electronic filing system templates (which can be downloaded to the firm’s computer system via BC Online beginning April 1)
• set-up for electronic funds transfer (for payment of the Property Transfer Tax)

A lawyer who wishes to make electronic filings in the Land Title Office must first register with, and obtain an Adobe Acrobat Signing Certificate from Juricert, a company owned by the Law Society, at http://www.juricert.com/. The Law Society is the certification authority for professionals for the purpose of e-filing under the Land Title Act.

This is a two-step process. First, a lawyer must register with Juricert for authentication of his or her identity and Law Society membership status. Second, once registered with Juricert, the lawyer must apply for a digital certificate. The lawyer will use the certificate to digitally sign documents for electronic submission to the Land Title Office.

Here are the steps to follow:

1. Register with Juricert — A lawyer will visit the Juricert website (http://www.juricert.com/) to complete an online registration form. The system will generate the lawyer’s information in portable document format (PDF) for the lawyer to review, print out, sign and submit to Juricert by fax or mail. Once this signed form is received, Juricert will check the lawyer’s information and signature against Law Society records to confirm his or her identity and Law Society membership status. When that authentication is complete, the lawyer will be registered with Juricert and receive a Juricert identification number by email.

2. Apply for an Adobe Acrobat Signing Certificate— Once the lawyer receives a Juricert identification number, he or she can apply on the Juricert website for an Adobe Acrobat Signing Certificate. Juricert will advise the lawyer once the certificate is available to download. The lawyer will be able to use this certificate to digitally sign documents for electronic submission to the Land Title Office via BC Online.

If a law firm’s trust account requires the signature of a non-lawyer financial officer on cheques, the financial officer also must register with Juricert and obtain a certificate. This is necessary to allow the law firm’s account signatories to digitally sign and file a Property Transfer Tax Electronic Payment Authorization form.

If a lawyer chooses to make an electronic filing of documents, any Property Transfer Tax payable in the transaction must be paid by electronic funds transfer. Law Society Rule 3-56 was recently revised to allow lawyers to authorize electronic withdrawals of funds from their trust accounts for this purpose.

If a law firm’s trust account requires the signature of a non-lawyer financial officer on cheques, both the signatory lawyer and the financial officer must register with Juricert and obtain digital certificates. This is necessary to allow them to digitally sign and file a Property Transfer Tax Electronic Payment Authorization form. This form authorizes the Land Title Branch to draw payments for Property Transfer Tax from designated law firm banking accounts at the time the firm submits documents for e-filing.

An underlying principle of the new e-filing system is that it will not mandate fundamental changes to conveyancing practice.

In accordance with practice in BC, it is therefore expected that the purchaser’s lawyer, with the assistance of his or her staff, will continue to prepare the transfer package in residential conveyances under e-filing. Rather than creating the Form A Transfer (and other forms) in word processing software, however, the purchaser’s lawyer and staff will do so using Adobe Acrobat forms, by filling out pre-determined fields.

Each person within a firm who drafts a land title form for electronic filing, and each lawyer who signs the form as officer, will need access to Adobe Acrobat software.

Assuming conveyancing staff have created a transfer form in Adobe Acrobat, the lawyer will review that form, along with all other documents in the package, with the client. The lawyer’s staff will forward the transfer package, with statement of adjustments, to the vendor’s lawyer by courier, by fax or by email (as scanned document attachments). The vendor’s lawyer will witness execution of a paper copy of the transfer by the vendor and return the document to the purchaser’s lawyer by courier, by fax or by email (as a scanned document attachment). In practice, the purchaser’s lawyer will need a hard copy of this signed transfer for his or her files. No hard copies will be used in electronic submissions to the Land Title Office.

As is now the case, the purchaser’s lawyer must review all documents prior to submission to the LTO. Under e-filing, the lawyer will digitally sign (using his or her digital certificate from Juricert) and lock each document prior to submission, typically the Form A transfer, Form B mortgage and Property Transfer Tax return.

The actual submission of the documents can be carried out by the lawyer’s staff or third parties such as registration agents. They will log into BC Online and upload the signed documents for submission. The Land Title Office system is expected to feature built-in checks on the submission, to ensure that the correct form version is used and that documents are not missing and are in the right order.

The Land Title Branch will also check a lawyer’s digital certificate to verify the practising status of that lawyer through current Law Society data provided to the Land Title Branch by Juricert.

The Business Corporations Act, SBC 2002, c. 57 comes into force on March 29, 2004, introducing both substantive and procedural changes in the incorporation, organization and activities of all British Columbia companies and the registration and obligations of all extraprovincial companies (collectively "companies").

Lawyers must familiarize themselves with the requirements of the new Act. Here are some of the key changes.

The forms and process for corporate procedures will change. All companies will be incorporated online through an "Incorporation Application" web form on the Corporate Registry’s new Corporate Online service. Other documents that are slated for online filing as of March 29 are the BC Annual Report, Extraprovincial Annual Report, Continuation Application, Transition Application, Notice of Alteration, Notice of Change of Address, Notice of Change of Directors, Amalgamation Application and Post Restoration Transition Application.

To obtain the most up-to-date information on the process and the latest version of all forms, check the Corporate Registry website at www.fin.gov.bc.ca/registries/colin.

When the Act comes into force, all companies must have a "central securities register" that complies with the Act.

Generally the Registrar will play a reduced role in warehousing corporate documents and will no longer vet documents. For example, the Registrar will accept only a notice of articles (as prescribed), and not a full set of articles, from a newly formed company. This change means that law firms must be vigilant in ensuring that all corporate documentation is genuine, accurate and properly maintained.

A firm that intends to act as the registered and records office for a company must be accessible to the public during "statutory business hours" for the delivery of records. Companies’ records may be inspected during statutory business hours and, although a company may by ordinary resolution restrict the times for access, the restriction must permit inspection during at least two consecutive hours a day.

A director’s resignation now takes effect when it is provided "to the company or any lawyer for the company," unless a later date is specified in the resignation. All lawyers who act for a company must now be prepared to accept a resignation, note the time and date it is received and ensure that it is forwarded appropriately.

The articles of a company may transfer in whole or in part the powers of the directors to manage or supervise the business and the affairs of the company to one or more other persons (including shareholders). The persons to whom the powers have been transferred have all the rights, powers, duties and liabilities of the directors to the extent of the transfer. Lawyers who are dealing with companies with which they are not familiar should be watchful for the transfer of powers and liabilities.

Within two years of the Act coming into force, all companies must make a transition filing, or face dissolution by the Registrar.

There are many other aspects of the new Act that have not been explored here. The British Columbia Company Law Practice Manual, published by the CLE Society of BC, is a very useful resource. For more information, contact CLE at 604 669-3544 or 1-800-663-0437 or check the CLE website at http://www.cle.bc.ca/.

The Law Society of BC has asked the Ministry of Sustainable Resource Management to consider the concept of an independent provincial authority to administer the province’s land title system.

The Law Society first raised the possibility of an independent authority with the Ministry late last Fall as a way of preserving the integrity of BC’s Torrens system and improving service delivery to users around the province as the demand for land title services grows.

The Ministry of Sustainable Resource Management, which is responsible for operation of the land title system, has now struck a committee to look at the implications and benefits of a land title authority. Law Society President William Everett, QC has appointed Second Vice-President Ralston Alexander, QC to that committee. Any decision as to whether an independent provincial authority is the best way to deliver land title services rests entirely with the government, which has stated it plans consultations with key user groups from across the province.

The Law Society is pleased that the government is prepared to explore an alternative means for delivering land title services in BC. The Society will keep the profession updated on this issue.

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