Angry in the Great White North

I wrote about the erosion of a basic right to privacy included in the Bill 151. Apparently I'm not the only one who has noticed.

From the letter sent to Finance Minister Greg Sorbara from OBA President James Morton:

However, the pressing matter at hand as this bill is now before the House for second reading debate, is the matter of solicitor-client privilege. Given that this is a fundamental principle for our profession, it is disappointing that there was no contact with relevant stakeholder groups in the legal profession for input in the development of this legislation.

While our issues have been addressed to a large degree in the existing provisions of the proposed legislation, we continue to have significant concerns pertaining to Section 11(4) requiring a participating audit firm to provide information or documents to the Board even where that information or documents are privileged.

The principle of solicitor- client privilege has been held by the courts to be sacrosanct and while Section 11(5) recognizes this principle we believe that the onus must rest on CPAB to demonstrate “absolute necessity”. Section 11(2) requires a court order for third parties to obtain confidential documents and we strongly recommend that the same standard must be applied to the disclosure of privileged documents to CPAB.

Here is the relevant portion of Bill 151:

11. (1) The Board may require a participating audit firm to provide it with all the documents and information that the audit firm obtained or prepared in order to per-form the audit firm’s audit of a reporting issuer

...

(2) All documents and other information prepared for or received by the Board in the exercise of its mandate and all deliberations of the Board and its employees and agents, in connection with an inspection, investigation or review panel proceeding carried out under the Board’s oversight program, are confidential and may not be disclosed without,

(a) the written consent of all persons whose interests might reasonably be affected by the disclosure; or

(b) a court order authorizing the disclosure.

...

(4) A participating audit firm that is required under subsection (1) to provide information or to produce documents shall comply with the requirement even if the information or documents are privileged or confidential.

What the OBA is "strongly recommending" is that the rules in 11(2) apply to the CPAB itself, that is, the CPAB can only get privileged information after seeking a court order. This legislation as proposed requires a court order of everyone except the CPAB.

How important is this to the OBA? I'd say it was very important. This is the first salvo, and it is suitably diplomatic, emphasizing what elements of the legislation the OBA supports. The letter avoids ultimatums, and hot-button terms such as "Charter rights", though it makes the not-so-subtle dig at the government for not consulting with the legal profession before tabling a bill with this sort of impact.

It also makes it clear that the OBA is looking to have the courts acts as guardians of the rights of clients to privacy in dealing with their solicitors. The OBA is not happy with the idea of the CPAB, a creation of the OSC and subject to the OSC's power to issue new rules and regulations, having the power to automatically pierce the veil of privacy that surrounds clients and their advisors.

It'll be interesting to see how this progresses. Is Dalton McGuinty's government going to fight the OBA on this one, or will the government yank the offending portion of the bill out in order to get the rest of the bill passed? It's a huge bill in which this CPAB bit is only one very small portion. On the other hand, if the OSC really wants the CPAB to have this sort of power, the government is going to be hard-pressed from that side too. I guess we'll have to wait and see.