How To Tell Whether Your Bad Date is Tax Deductible

The Lawyerist - Fri, 05/06/2016 - 06:12

While dating is not a typical business activity, one prospective client asked if he could claim a business deduction for online dating activities including his monthly subscription fee, meals, and entertainment expenses. While every woman he met online ultimately rejected him for a long-term personal relationship, they continued to maintain a friendly business relationship. A few even referred customers to him.

Using this situation as a backdrop, we will cover the basic business entertainment deduction rules if you are an attorney seeking to entertain clients, potential leads, and other sources of business. The rules, detailed in IRS Publication 463, are complex, vague, and, to a degree, rely on the honor system. The interpretation of these rules is complicated further by the elements of personal recreation and pleasure often involved in business entertainment.

Because of this, some will misunderstand or even abuse the rules. But don’t be afraid to take deductions that you are legally entitled to.

By understanding these rules, you can confidently write-off fifty percent of your business entertainment expenses and structure your entertainment activities to make them tax-deductible.1

Entertainment

According to the IRS, entertainment includes any activity generally considered to provide amusement or recreation. Examples include (but are not limited to) entertaining your guests at these places:

  • Nightclubs
  • Social, athletic, and sporting clubs
  • Theaters
  • Sporting events
  • Yachts
  • Hunting, fishing, vacation, and similar trips
  • Meals

For an entertainment expense to be deductible from your self-employed income, it must pass two tests:

  1. The “ordinary and necessary business expense” test.
  2. Either the “directly related test” or the “associated test.”
Dues Are Not Tax-Deductible

Unfortunately, your dues (including initiation fees) for membership in any club organized for business, pleasure, recreation, or other social purposes are not deductible as a business expense. This also includes country club memberships (which Treasury Regulations particularly disapprove of deducting) and your online dating subscription fee.

Ordinary and Necessary Expenses

As mentioned previously, your expense is ordinary if it is customary in the industry. An expense is necessary if it is appropriate and helpful in developing and maintaining a business. An expense will be deemed a nondeductible personal expense if business activities are incidental.

Finally, the expense must be reasonable. This means that the expense must not be overly lavish. It would be unreasonable to spend $44,882 for two ringside tickets to the Pacquiao-Mayweather fight to entertain a client who will pay a maximum of $10,000 in legal fees with no expectation of future business or referrals.

Entertainment deductions — particularly meals — should not be deducted on a regular basis with the same people because it will not be recognized as a reasonable business expense.

In Moss v. Commissioner, attorneys in the same law firm met for lunch daily at a local restaurant to discuss their ongoing cases. On their tax returns, they deducted the costs of the meals as a business expense. The court disallowed the deduction, finding that eating lunch daily is a routine personal expense, even when you discuss business during the meal.

As a solo or small firm attorney, clients generally come from referrals in your network. Therefore, it is customary, appropriate, and helpful to meet with potential clients, colleagues, or referral sources over a meal or an entertainment event to develop trust and rapport.

As for our online dater, while he failed to capture the heart of his dates, he was able to capture their business. Since he can prove that he met referral sources and obtained clients through his dates, he can prove that his expenses — aside from his dues — were ordinary and necessary.

Directly Related Test

There are two ways to prove that an entertainment expense is directly related to the active conduct of your business. One way is to show that the entertainment took place in a clear business setting. This is viewed objectively, so nightclubs, theaters, sporting events, country clubs, or social gatherings, such as cocktail parties, are not considered to be clear business settings.

If the entertainment does not take place in a clear business setting, the directly related test can be met if you can show that you engaged in good faith business activities, and the main purpose of the entertainment was the active conduct of business. That said it is not enough to just show a general expectation of income or a specific business benefit.

As an attorney, it will be harder to prove that your entertainment expense meets the directly related test because said expenses are incurred with a general expectation of income or a specific business benefit. In other words: networking and establishing goodwill.

You may meet potential clients and referral sources for the first time at social gatherings, charity functions, birthday parties, and other places that are not clear business settings.

Therefore, our online dater will fail the directly related test. No one goes on a date at a “clear business setting.” Also, even if an active conduct of business occurred, the main purpose of a date is to get to know a potential romantic partner.

If an entertainment expense fails the directly related test, then you have one more test available to you.

Associated Test

An entertainment expense can be deductible as a business expense for two reasons:

  1. It is associated with the active conduct of trade or business
  2. The entertainment event takes place before or after a substantial business discussion. This requirement is met if the entertainment is held on the same day as the business discussion.

The associated test is more flexible than the directly related test. IRS Publication 463 defines how the associated test is applied:

Generally, an expense is associated with the active conduct of your trade or business if you can show that you had a clear business purpose for having the expense. The purpose may be to get new business or to encourage the continuation of an existing business relationship.

Whether a business discussion is substantial [for the purposes of the associated test] depends on the facts of each case. A business discussion will not be considered substantial unless you can show that you actively engaged in the discussion, meeting, negotiation, or other business transaction to get income or some other specific business benefit.

The meeting does not have to be for any specified length of time, but you must show that the business discussion was substantial in relation to the meal or entertainment. It is not necessary that you devote more time to business than to entertainment. You do not have to discuss business during the meal or entertainment.

You will have a better chance at deducting your business related entertainment expenses under the associated test. The associated test permits meeting and discussion to establish goodwill and does not have a time requirement to discuss business. But these expenses may be disallowed as a nondeductible personal expense if they are connected to regular meetings with the same people.

Under the associated test, you may also be able to deduct dating expenses. For instance, if there is no romantic chemistry, you should switch the topic of discussion to business and keep it that way. If there is a possibility of a future business relationship, then any entertainment expenses incurred after the discussion can be tax deductible. That gives our online dater the ability to deduct expenses using the associated test as well.

Finally, if you meet that special someone, can you deduct the entertainment expenses from your dates even though your activities could pass the above tests? I wouldn’t recommend it. The IRS is very suspicious of transactions between related parties. So although you lose the tax deduction, remember you have gained a priceless and nontaxable relationship.

Originally published 04-08-15. Republished 05-06-16.

Featured image: “Revenue Service IRS Finance Taxation Government Concept ” from Shutterstock.

  1. Generally, meal and entertainment expenses under seventy-five dollars do not require a written receipt. Regardless, you should record the amount spent, the time and place of the event, its business purpose, and the business relationship of the individuals involved. 

How To Tell Whether Your Bad Date is Tax Deductible was originally published on Lawyerist.com.

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Current Awareness Services in Law Libraries

slaw - Fri, 05/06/2016 - 06:00

One useful service that libraries can provide is current awareness. This service lets lawyers know about new or proposed developments in legislation, case law of interest, and articles relevant to their practice. It can also function as a business development tool by keeping lawyers up-to-date with what is happening in a specific industry or by letting them know if a client (or competitor) has been mentioned in the news.

Journals and newsletters

Traditionally libraries have routed a periodical or a photocopy of its table of contents around the firm. Routing a physical copy has problems: it is fine for the person who is first on the circulation list, but not so much for the person who is last. The publication may get lost en route or permanently trapped in someone’s inbox. It is much more efficient to email an electronic version of the table of contents, since everyone gets the material immediately, and it allows the inclusion of hyperlinks to online content.

However, the challenge with routing newsletters via email is copyright. Sending around the print copy of the publication with a routing slip is fine; scanning it in and sending it by email may not be, depending on the terms of the subscription. Some publishers provide PDF copies of their publications which can be routed internally or placed on the intranet, subject to the terms of the licence.

Legislation

There are a number of useful tools that librarians can use to track changes to legislation. These include Lexbox, RSS feeds, LexisNexis’s Canadian Legislative Pulse, and QuickScribe (for B.C. legislation). You can use these tools to set up alerts to notify you when new bills are unveiled that make changes to specific acts or include certain keywords. Other useful publications that can be monitored include the Canada Gazette and the B.C. Regulations Bulletins.

Case law

Monitoring case law generally falls into one of two categories: monitoring either a specific case or a specific practice area for new cases.

For a specific case you can use resources such as CanLII and paid databases. Depending on the case’s jurisdiction, monitoring its progress can be tricky due the lack of easily accessible docket information. If there is sufficient public interest in a case, it makes sense to set up an alert in a newspaper database. For monitoring the status of class action lawsuits, the website of the law firm acting on behalf of the plaintiffs will usually yield useful information.

If you are keeping an eye out for new cases in a specific practice area, you can use blogs, CanLII Connects, digest services (such as CLEBC’s Case Digest Connection), law reports, and the “recent development” sheets from loose-leaf publications. However, the time it takes the commercial publishers to edit and disseminate law reports and other publications can make their services less timely than some of the other options.

News alerts

News alerts can be used to keep lawyers up-to-date in such areas as client news, developments in a specific industry, or general legal news. There are a number of resources that can be used to set up news alerts, both paid (e.g. Manzama, LexisNexis’s Newsdesk) and free (e.g. Google News). Depending on the subject area, the search being set up may end up being very complex. Generally, the more targeted the information, the more time it takes to set up the search and the more testing and fine-tuning required.

Once you have a search that you are happy with, you need to decide how you will deliver the results. Depending on the search, the results may need to be edited before they are forwarded on to the end user, as they may include duplication of the same information and/or irrelevant results. Many of the commercial services allow you to package your results. However, depending on the service you are using, you may be restricted in how you can redistribute the information.

Delivering Current Awareness

One challenge with providing current awareness services is delivering the information in a meaningful way. Generally “pushing” information to lawyers makes it more likely that they will actually see the information. However because lawyers get so much email it is important to keep the number of current awareness alerts to a minimum, while still making sure the information is timely. The more emails the library sends out, the more likely they are to be unread.

Many lawyers read current awareness material on their mobile devices, so it is important to present the material in a way that is mobile-friendly. For example, rather than attaching a table of contents as a PDF, the table of contents can be pasted into the text of the email.

Another option to consider is placing current awareness alerts on your organization’s intranet instead of pushing them out to users. Depending on the sophistication of your intranet, you may be able to tailor these alerts so that they appear only to the relevant individuals or working groups.

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My Twitter Digest for 05/04/2016

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Publications Nominated for the 2016 Hugh Lawford Award for Excellence in Legal Publishing

slaw - Thu, 05/05/2016 - 12:24

Every year, the Canadian Association of Law Libraries (CALL) hands out the Hugh Lawford Award for Excellence in Legal Publishing.

It honours a publisher that has demonstrated excellence by publishing a work, series, website or e-product that makes a significant contribution to legal research and scholarship.

The nominees this year are:

  • BC CLE Online (Continuing Legal Education Society of British Columbia): CLE Online is the home of CLEBC’s online subscription services
  • Quickscribe 2.0 (Quickscribe Services Ltd.): Quickscribe provides up-to-date consolidated legislation, point-in-time legislation, and the current status of bills, regulations and Orders in Council from British Columbia
  • WestlawNext Canada
  • Cameron, Stuart J. Civil Appeals in Saskatchewan: The Court of Appeal Act and Rules Annotated. 1st ed. (Regina: Law Society of Saskatchewan Library, 2015): With expert knowledge gained over almost 34 years on the Court of Appeal, former Justice Stuart J. Cameron carefully guides users through the sometimes-complicated legislation and rules of the province’s highest court. This welcome resource provides practical commentary on case law and legislation in one comprehensive, easy-to-use guide. Features include: Forms, Practice Directives, Tariff of Costs, Fees Regulations, Tble of Cases, Table of Statutes , Full Index.

The award honours Hugh Lawford (1933-2009), Professor of Law at Queens’ University and the founder of Quicklaw.

The award will be presented to the recipient at a reception during the 2016 CALL Annual Meeting in Vancouver later this month.

Slaw.ca received the award in 2009.

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Amendment to the Charter of the French Language: Signage in French and Trademarks

slaw - Thu, 05/05/2016 - 12:24

The Charter of the French Language currently allows for the exclusive use of trademarks in languages other than French unless a French version of the trademark has been registered. Seeing an increase in the presence of trademarks in a language other than French displayed on outdoor signage all over the province, the Québec Minister of Culture and Communications and Minister Responsible for the Protection and Promotion of the French Language, Hélène David, tabled proposed amendments to regulations under the Charter of the French Language (Loi 101). The amendments are to ensure a greater visibility of French in the display of outdoor signages of retail, hospitality and restaurant industries among others.

A trademark may consist of a word or combination of words, sounds or designs used to distinguish the products or services of a person or organization from those that others offer on the market. (Source: trademarks Guide published by the Canadian Intellectual Property Office (CIPO))

The aim of the amendments is to uphold Québec’s French culture and identity throughout the province by insisting that all companies add a generic French term, descriptive, slogan or information about the business’s products and services to their non-French outdoor signage. As a result, companies like Best Buy, Walmart, Costco, Canadian Tire and Home Depot among others will no longer be able to display their trademarks only in English (see more on this issue in a previous post here).

Two proposed regulations were published in the Gazette officielle du Québec on May 4, 2016, which includes several methods for businesses to comply with the proposed changes while preserving the integrity of their brand and trademarks and a timeline to comply. The public and interested stakeholders are invited to participate in the consultation on the regulatory amendments until June 18, 2016. The Minister indicated during a press conference on May 3, 2016, that the proposed amendments are the result of consultations, including consultations with businesses operating in Quebec.

Once in force, the Quebec Office of the French Language (OLF) will provide companies established in Quebec with documents reminding them of their obligations, including rules for the application of the Regulation.

“With this proposal, every person, whether being driven on a highway or walking on a sidewalk in an industrial area or a commercial parking, will recognize that they are in Quebec because they will see the display of messages in French signage. The face of French Quebec will be everywhere! “stated Minister David (translated from French.)

The two regulations being amended titled, Regulation respecting the language of commerce and business, and Regulation defining the scope of the expression “markedly predominant” for the purposes of Charter of the French language applies to all companies doing business in Quebec and includes the following requirements.

Details on the Regulatory amendments
  1. When a trademark is displayed only in a language other than French outside of a building, a sufficient presence of the French version of the displayed trademark must be found in the same area in accordance with the Regulations, which includes:
    • A French generic term or description of the products and/or services concerned;
    • A slogan in the French;
    • Alternatively, any other term or indication that provides information in French on the products and/or services given to the consumers or persons frequenting the premises or the business (excluding hours of operation and addresses). How this should properly be done is explained visually on the Quebec government website here.
  2. The above requirements are for signage on the exterior of a building including the roof, on a facade located inside a building or a shopping center, inside a room or a building that is intended to be seen from outside (e.g., display found in a window). It also includes a terminal or any other independent structures, unless the trademark is already shown in either of the situations mentioned above, or if more than two marks are affixed to the structure. Moreover, exceptions include non-French trademarks appearing on temporary or seasonal stands or kiosks, totem-type structures on which two or more trademarks appear, and totem-type and other independent structures where the non-French trademark also appears on a sign outside a building but near it.
  3. The display in French must have the following characteristics, can be read in the same field as that of the trademark and be present at all times without necessarily be predominant in relation to the brand and be lit at any time if the English brand is. However, the company will not be required to use the same means of illumination, it may, for example, opt for a more economical solution.
  4. Any businesses with names or family names will not have to change their signs (e.g., Tim Hortons or McDonald’s).
  5. If a company displays an outdoor sign or message in French and English, the French message or sign must be predominant. The rules laid down by the regulation do not require a clear predominance or even an equal visual effect with respect to the trademark.
Timeline for compliance and enforcement

Once the Regulations receive final publication in part 2, of the Gazette officielle du Québec, it will come into force 15 days following its publication.

Existing businesses have three years to comply with the new regulations once they are adopted. Otherwise, they face fines ranging from $1,500 to $20,000. The government’s impact statement stated that over 1,800 companies could be affected and the changes will cost businesses them a total of $6.5 million.

New businesses will have to comply with the regulation immediately.

Categories: Teknoids Blogs

Lawyers Can Be Useful to Startups, Even Non-Legal Ones

The Lawyerist - Thu, 05/05/2016 - 10:00

A few months ago, we lamented the fact that the cool disruptive legal tech startup field was woefully short on actual lawyers that might provide useful information about how legal tech should work. The comments were, shall we say, spirited, with some folks asserting that good tech is good tech and you do not necessarily need the assistance of some Luddite lawyers. Lawyers might have the last laugh, however. According to the Harvard Business Review, we could be good for all sorts of startups.

Lawyers can add value in the obvious ways, helping to avoid early mistakes like issuing stock too late in the game, when the company has grown in value and the employees can no longer take advantage of favorable tax treatment. But more importantly, a lawyer on the early team can contribute to a thriving company culture by asking the right questions at the right times, providing perspective on crucial transactions, and getting smart fast on issues where the rest of the team lacks expertise.

The article notes that the first set of skills-being a smart tax lawyer, for example-are great, but can be handled by outside counsel. For an attorney to add enough value as a full-time employee, they need to have a mindset that is both highly detail-oriented and risk-tolerant.

For one thing, she must be willing to give up her plush office and lucrative salary for a computer station at a long table and compensation in the form of prayers, otherwise known as stock options. Her professional risk tolerance must follow suit. An essential attribute of a business attorney is providing “risk-adjusted” advice, and the level of tolerable risk for a startup generally far exceeds that for a Fortune 500 company. Lawyers at startups need to recognize that a workable answer today is often preferable to the perfect answer tomorrow; hand-wringers need not apply.

Lawyers Can Be Useful to Startups, Even Non-Legal Ones was originally published on Lawyerist.com.

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How My Eating Disorder Took Over My Law Practice and My Life

The Lawyerist - Thu, 05/05/2016 - 06:12

I have an eating disorder. This has defined me more than being a lawyer, a business owner, a girlfriend, an aunt, and a friend. While I’ve battled my eating disorder for most of my life, it has only recently taken hold and forced me to pay attention. My inability to focus on anything other than food and body image threatened to take down my life and my firm, so I made the hard decision to scale back my practice and enter treatment.

Recognizing an Eating Disorder

For at least 25 years, my relationship with food has always been tumultuous. I have never seen food as food. Never. Pizza was bad, so I was bad when I ate it. Cookies made you fat, and I already felt fat, so I couldn’t eat cookies. I ate to avoid my feelings and to soothe myself. I ate because I hated myself, and because I hated other people. I often ate to fit in. In equally destructive ways, I restricted food to prove to myself I didn’t have needs, but I did have willpower. This led to a ton of shame and isolation; I restricted with others and binged when I was alone. I have been on every diet you can name, and I have spent thousands of dollars on cleanses, pills, books, and health coaches. There were moments, even months, of peace. But I would always return to constant judgment of my food choices.

It didn’t occur to me that this was a problem until I woke up one day and realized that thinking about food 95 percent of every day might not be normal. So I sought help and received a diagnosis of binge-eating disorder. I saw a dietitian a handful of times, started talking about it with a therapist—assumed that was enough—and swiftly put it in the back of my mind. I continued to restrict food, adhere to my own peculiar food rules, and firmly believed that I just needed to muster more willpower to make peace with food and my body.

And then, as it does, life happened. I lived through a harrowing month of personal and professional losses. I gained 30 pounds. My mind reacted by effortlessly reassembling all the pieces of my eating disorder.

And then, my eating disorder attacked my professionalism. There were the days I couldn’t get out of bed because I felt scared of the unknown. I canceled client and networking meetings because I didn’t feel good in any of my clothes. My self-esteem was so low I couldn’t imagine being a lawyer. I started to question whether law was right for me, and if I would ever feel successful.

Alarmingly, I also started resenting my clients. I had always considered myself a compassionate and empathetic lawyer. And I had worked on stressful cases with stressful clients for years. But all of a sudden, I couldn’t handle it. My eating disorder manifested itself deeply in every facet of my life, and I couldn’t even see it.

Finding Help

There were innumerable moments in my life when I could have sought professional treatment for my eating disorder. But the moment that made me finally enter treatment was so familiar and so ordinary: I woke up, had a slice of leftover pizza for breakfast, and wanted to die.

The pizza was enough—that cheese was enough, that carb was enough, that judgment was enough—to send me into a terrifying downward spiral. I hated myself and my lack of willpower. I hated the people who loved me, and my clients, and the law, and my mom for leaving when I was young, and anyone who could resist pizza and just eat eggs for breakfast.

Lost in shame and guilt and self-hatred, I didn’t recover from this downward spiral for a week. I didn’t shower. I didn’t engage. And I definitely didn’t do any client work—they were all so needy, and I couldn’t handle anyone else’s needs.

I couldn’t even handle my own.

So I called a treatment center and made an appointment for the following day. Feeling so bad was exhausting, and I was finally motivated to take my eating disorder seriously and get help. I cried in the intake as I told them that yes, I may seem fine, but I knew I would seem fine until I was dead. Finally, someone took me seriously. The intake therapist recommended intensive treatment and said I “needed eyes on me.”

It was validation, and it was the very first time that I felt someone really understood and cared about this part of me.

Once I determined that I was going to enter treatment, I knew I wouldn’t be able to handle certain cases. Demanding clients, constant interruptions, and court dates would take up too much time and energy. But my high-stress cases also paid the most, and I had concerns about making less money while finding a way to pay for treatment. So I cut back on my litigation work but kept open the transactional side of my business. That, coupled with savings, proved just enough to get by in the early stages of treatment.

After working out the financials, I followed the rules while withdrawing from my cases. Still uneasy, I also called my state’s lawyer support service. They honored my decision to enter treatment, validated my desire to withdraw from certain cases, and talked me through how to have conversations with my clients. When I expressed doubt about withdrawing, they reminded me that I might not be the most zealous advocate right now, and making space for myself might not only be in my best interests, but also my clients’.

By the end of the day, I had fully withdrawn from three cases. I talked with each client, found attorneys who would take over the cases, prepared and sent all case files, filed documentation with the courts, completed final billings, and returned unearned trust funds. I did all this in four hours; it was the most efficient I had been in months.

The relief I felt was immediate and palpable. I hadn’t been showing myself a lot of grace up until this point, but it didn’t take more than a day to realize that dropping these cases was the biggest act of self-care I could have shown myself. This step was necessary in order to make space for myself in treatment.

Treatment

Upon entering the intensive treatment program, I found I was glad I made room for myself. It took all my emotional energy to sift through my disordered thinking.

Treatment brought up issues that overlap with lawyering: black-and-white thinking, perfectionism, and self-esteem. And slowly, I have learned new things: food is just food (which was like understanding a new language), there aren’t good and bad foods, and feeling intense shame while eating a brownie was not healthy. I realized I am worth more than the number on the scale, and other coping skills are more effective and just need to be honed. I learned to be vulnerable and to shed light on my disordered thoughts to take away their power.

But the most beautiful thing about treatment has been meeting the other people in it with me: we take classes together, we do group therapy together, we cry, get mad, and laugh together. We listen, and we share our struggles, and we realize we’re not alone with our eating disorders anymore. We talk about things we’ve never given voice to, we strip those things of their power, and we try to move on. We have people now. And we get it. For the first time, we are no longer alone.

I can see now why there was no room for anything else in my life. I can see now why I ran out of empathy. I can see now how important it is to practice self-care before attempting hard things—especially hard things that involve other people’s needs.

Looking Towards the Future

I am not writing this article from a place of recovery. I’m just four months into treatment, and I’m still fighting my eating disorder most days. But I’m taking it seriously now. I see a therapist and a dietitian every week. I still spend a lot of time thinking about food and body image, but my thoughts are more tempered now. I’m getting better. I’m reengaged in my personal life. And I’m starting to derive joy from my practice again. I’m doing transactional work with less anxiety. I’m enjoying conversations with clients and I am energized by helping them. I’m recognizing that there’s space for their legal needs and my personal needs to coexist. I don’t know whether I will ever add high-stress cases back into my practice, but I’m not feeling any judgment about that decision.

And most importantly in all this, I’m learning to let go of perfectionism. It’s probably what drove me to become a lawyer, it’s probably what makes me a good one, and it’s definitely played a part in my downfall. Needs are a difficult thing. Contending with your own is hard enough; working a job that mandates you take on the needs of others is another beast entirely. Throughout my experience, I’ve learned what I’ve always known but was never able to do: take care of me before I can take care of them. Once I was able to see that, once I was able to do that, it was clear to me how much more space I had to tackle other people’s problems. Because I am a healthier person, I am a better person. I am a better lawyer.

How My Eating Disorder Took Over My Law Practice and My Life was originally published on Lawyerist.com.

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Yet Again the Question Is “Where Were the Lawyers?”

slaw - Thu, 05/05/2016 - 06:00

Jasminka Kalajdzic recently highlighted a New York Times column entitled Panama Papers Show How Lawyers Can Turn a Blind Eye. The column reported that Ramón Fonseca, one of the founders of the Panamanian firm Mossack Fonseca, “told The New York Times that the lawyers did nothing wrong in helping their clients set up shell companies”. Mr. Fonseca was quoted as saying:

We are like a car factory who sells its car to a dealer (a lawyer for example), and he sells it to a lady that hits someone. The factory is not responsible for what is done with the car

The New York Times columnist was highly critical of the American rules of professional conduct in similar contexts. He wrote:

Rather than seeking to keep clients from violating the law, it appears that some lawyers are willing to go right up to the line of legality in their representation. By keeping themselves ignorant about what may be going on, these lawyers have been able to maintain the facade that they are not involved in potentially illegal activities, even though they are often the prime enablers of misconduct. Has the legal profession lost its moral compass? The answer is that the ethical rules governing lawyers do not put much of a barrier in the way of helping clients engage in transactions that would appear questionable but do not violate any specific laws, so it is not clear whether lawyers pushing to the edge of the law are acting improperly.

The columnist noted the ABA Model Rules of Professional Conduct and said that the Model Rule 1.2(d) is seriously flawed in permitting lawyers to keep themselves ignorant in order to be compliant with the rule:

Model Rule of Professional Conduct 1.2(d), issued by the American Bar Association, says that a lawyer should “not counsel a client to engage, or assist a client in conduct that the lawyer knows is criminal or fraudulent.” Note how the rule is premised on the lawyer’s knowledge, and many lawyers are expert at keeping themselves ignorant about exactly what is taking place to maintain plausible deniability. Moreover, that same rule says that “a lawyer may discuss the legal consequences of any proposed course of conduct,” so exploring the limits of the law can be permissible.

Canadian professional conduct rules are quite different than those considered in New York Times column. Rule 3.2-7 of the Federation of Law Societies Model Code is somewhat broader than ABA Model Rule 1.2(d).

When acting for a client, a lawyer must never knowingly assist in or encourage any dishonesty, fraud, crime or illegal conduct, or instruct the client on how to violate the law and avoid punishment.

The Federation Model Rule refers to dishonesty and illegal conduct as well as fraud and crime. Whether dishonest and illegal conduct includes conduct that is not criminal or fraudulent is uncertain. Illegal conduct could include statutory breach ranging from quasi-criminal to breach of codification of private rights and obligations. Indeed, illegal conduct might arguably include civil misconduct. For a discussion in a somewhat similar context, see Dublin v. Montessori Jewish Day School of Toronto (2007), 85 OR (3d) 511 but also Blank v. Canada (Justice), 2015 FC 956.

More importantly, the concept of knowing assistance in the Canadian professional conduct rules has not been limited to actual knowledge. Canadian discipline cases have concluded that knowing assistance includes constructive knowledge as well as actual knowledge. As the Law Society Appeal Panel (as it then was) said in Purewal v. The Law Society of Upper Canada, 2009 ONLSAP 10:

[31] “Willful blindness” and “recklessness” are two states of mind that are tantamount to knowledge. Put another way, they serve as proxies for proving actual knowledge. But their meaning must be correctly understood: Sansregret v. The Queen (1985), 18 C.C.C. (3d) 223 (S.C.C.); Law Society of Upper Canada v. Steven Michael Mucha, 2008 ONLSAP 5. [32] “Willful blindness” means that a licensee actually suspects the dishonest activity, but deliberately refrains from making further inquiries for fear of confirming those suspicions. “Recklessness” means that a licensee is aware of the risk that the activities in which he/she is participating or assisting are dishonest, but continues on despite the risk.

The New York Times column cogently shows why rules of professional conduct permitting turning a blind eye to criminal or fraudulent client conduct would be inappropriate. Purewal and many other discipline cases come to the same conclusion.

The Rules of Professional Conduct in Ontario go further. Rule 3.2-7.1 prohibits negligent facilitation of dishonesty, fraud, crime or illegal conduct. Rule 3.2-7.2, requires lawyers to “make reasonable efforts to ascertain the purpose and objectives of the retainer and to obtain information about the client necessary to fulfill this obligation”. Of course, knowing assistance is a more serious ethical breach than negligent facilitation. But both are contrary to the Rules of Professional Conduct.

So all is well! Canadian Codes and Rules of Professional Conduct do not permit “lawyers to keep themselves ignorant in order to be compliant with the rule”.

But not so fast. How did the Panama Papers case arise? Was it by client complaint? Of course not. Tax haven clients want secrecy. The facts of the Panama Papers were disclosed by unlawful hacking. Assuming unlawful client conduct, why would any client complain about lawyer assistance unless the secret was already out?

Much has been written about the Law Societies’ complaints-driven and reactive approach to regulating professional conduct. As the Panama Papers case (and the GM, Volkswagen, Enron, Watergate and other cases) makes clear, this reactive complaint-driven regulatory approach simply does not work where lawyers facilitate unlawful client conduct. Where client misconduct is somehow found out, the question is often “Where were the lawyers?” Our reactive complaint-driven regulatory approach increases the risk that, time and time again, we will have to ask the same question.

There is a second point that may be made. In Canada, we have robust protection of lawyer-client communications. Canadian solicitor-client privilege is as robust as it can be and more robust than comparable privileges in many (if not all) other countries. As the Supreme Court of Canada has made clear, solicitor-client privilege in Canada is as close to absolute as possible. This heightens the importance of effective Law Society regulation as only Law Societies can hold effectively lawyers to account as they are entitled to examine (and are required to protect) privileged communications.

This leads to a third point. In Canada, there are two exceptions and one exclusion to solicitor-client privilege. The “innocence at stake” and “public safety” exceptions are irrelevant in cases involving client misconduct in the commercial sphere. The “crime-fraud” exclusion may relevant as Alice Woolley discusses in her column Volkswagen Legal Advice and the Criminal Communication Exclusion to Confidentiality and Privilege.

In Descôteaux et al. v. Mierzwinski, [1982] 1 SCR 860, the Supreme Court described the crime-fraud exclusion in terms which would seem to avoid the risk of shielding crimes and frauds facilitated by lawyers:

Communications made in order to facilitate the commission of a crime or fraud will not be confidential either, regardless of whether or not the lawyer is acting in good faith.

However, the exclusion is of limited application in fact as it is necessary that there be prima facie proof of fraud before the crime-fraud exclusion applies. See Laquerre c. Société canadienne d’hypothèques et de logement, 2013 QCCA 95.

If lawyer misconduct only surfaces if and when the clients complain to the Law Society, or when there is otherwise prima facie proof of facilitated crime or fraud, then there is a high degree of protection of client misconduct facilitated by lawyers and a much reduced risk of lawyers being called to account for wrongful facilitation.

While somewhat heretic, this examination suggests that the scope of Canadian solicitor-client privilege may be too broad given its vigour. Solicitor-client privilege is justified by the need for clients to be able to reveal their deepest and darkest secrets in order to obtain effective legal assistance. This is undoubtedly the case where, for example, a lawyer defends an accused person. But it is not so clear that the same robust protection is required, or even appropriate, in the context of a residential real estate transaction, an internal corporate investigation or perhaps even tax planning. Other than where life, liberty and the security of the person are involved, it is not obvious why the nearly absolute version of solicitor-client privilege is genuinely required as opposed to a lesser protection as applies, for example, to protect the adversarial process (litigation privilege) or settlement discussions (settlement privilege).

While Canadian law and legal ethics is not vulnerable to the same attack as made in the New York Times column, it is difficult to have confidence that there is full compliance with our professional conduct rules. There is real incentive to cloak unlawful activity with the nearly absolute protection of solicitor-client privilege. A reactive primarily complaint-driven regulatory process will rarely examine that which the client, protected by a nearly absolute privilege, does not want examined.

I wonder when the next “where were the lawyers” column will be published. Given recent history, it won’t be long. But more importantly, I wonder how many articles will never get to be written.

Categories: Teknoids Blogs

Russian Hackers Are Trading Your Email Credentials like Magic Cards

The Lawyerist - Wed, 05/04/2016 - 17:19

Another day, another security breach. Alex Holden, chief information security officer at Hold Security, discovered that 272 million emails are currently being traded in Russia’s criminal underworld. Nearly every major email provider was breached, including Google, Yahoo, and Microsoft.

If you route your email through any of the providers mentioned, here are five steps you can take to mitigate a potential breach:

  1. Change your password. Now is the time to change your password. Read our password guide to make sure you are creating a password that will deter hackers.
  2. Use your domain as your email address. If you are still using Gmail.com, Yahoo.com, or Hotmail.com, change it and get a real email address using your law firm’s domain. Aside from being more professional, hackers are less likely to catch you in their mass nets when scraping for email credentials.
  3. Enable two-factor authentication. Almost every major email provider offers two-factor authentication, and you should be taking advantage of that. Even if your password is leaked, you are still guarded against nefarious hackers. You should also enable two-factor authentication for other cloud services you use professionally and personally.
  4. Encrypt your email. While the process is a little bit convoluted, you can encrypt your web-based email communications.
  5. Consider setting up a secure portal. Even if you do all the above, email is notorious for being breached. Setup a secure communications portal for your clients to communicate and share documents. You definitely don’t want your client data leaked.

If you’ve done all the above, you can feel relatively confident your email is safe and sound from underground Russian criminals jockeying your credentials. If you haven’t protected your email by following any of the above steps, now is a good time to catch up.

Russian Hackers Are Trading Your Email Credentials like Magic Cards was originally published on Lawyerist.com.

Categories: Teknoids Blogs

My Twitter Digest for 05/03/2016

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Categories: Teknoids Blogs

Starting with 1999.io : Scripting News

<CONTENT /> v.5 - Wed, 05/04/2016 - 13:59

Starting with 1999.io : Scripting News  http://scripting.com/2016/05/04/1238.html

Categories: Teknoids Blogs

Galactic Disputes: Judges Channel the Wisdom of Star Wars

The Lawyerist - Wed, 05/04/2016 - 09:00

Making legal jargon understandable to the general masses is a big job. Some more creative judges think outside of the box to get their point across through pop culture references. With all of the hype surrounding Star Wars: The Force Awakens,  it should come as no surprise that Star Wars references are seeping into judicial opinions.

Arbitration Odyssey

Not so long ago in a courtroom not quite galaxies far away, Singaporean Judge Vinodh Coomaraswamy anonymised his 76-pages of  reasons for dismissing an application to reject a tribunal’s decision by inserting various names and locations from the popular franchise. Uncreatively titled AMZ v. AXX, the title of the arbitration award reveals little of the tale woven within.

Although the geographical specifics don’t entirely match up to the galactic level Star Wars universe, the judge set the dispute in the aptly named Alderaan, Cloud City, and Bespin—an immense gas giant located in a desolate sector of the Star Wars universe.

In lieu of using the names of parties to the dispute, the judge dubbed the finance manager as Beru and the oil trader as Owen, Luke Skywalker’s aunt and uncle in the original Star Wars trilogy.

The judge even went as far as naming the vessel used by the plaintiff to ship crude oil to the defendant the “Tantive IV,” which die-hard Star Wars fans will immediately recognize as the ship Leia is captured in at the beginning of Episode IV.

This made the seventy-six-page culmination of an otherwise dry contract dispute much more interesting. A few of the judges highlights are below.

… it chartered and nominated a vessel, which I shall call the “Tantive IV”, to transport the Dar Blend from South Sudan to up to three safe ports including Alderaan and Cloud City…

…Owen proceeded to load the Dar Blend onto the Tantive IV at Port Sudan on 17 and 18 December 2010. However, Owen did not instruct the Tantive IV to sail directly from Port Sudan to Cloud City. Instead, he instructed the vessel to sail from Port Sudan to Alderaan and to remain in Alderaan awaiting further routing orders…

This is by no means the only time a judge has used Star Wars references to illustrate points in a court of law, nor by any means the most colorful.

A Little Green Man

In a case involving a racketeering and money laundering conviction stemming from “spas” that were allegedly fronts for prostitution, appellate Judge Frank Easterbrook of the 7th Circuit chided the prosecution over an inflated calculation of proceeds from the operation. Finding that operational costs shouldn’t be considered net proceeds, Judge Easterbrook cautioned that “Size matters not, Yoda tells us.”

Justice Cunningham of the Kentucky Supreme Court similarly channeled the wisdom of Jedi Master Yoda in his dissenting opinion on due process considerations and nonpayment of child support, opining:

Even Yoda, the diminutive Star Wars guru, recognized that sometimes in life we have to fish or cut bait. ‘Do or not do. There is no try.’ It is an admonition which fits the deadbeat parent when all of our solicitous pleadings and beseeching have led nowhere.

Jedi Mind Tricks

In one case, where a doctor was charged with enabling prescription drug abuse by allegedly writing hundreds of medically baseless prescriptions, the judge incorporated his knowledge of Star Wars into an order on objections to an expert’s testimony. The court took the defense to task over diversionary tactics, such as demanding a list of a prosecution witness’s published articles for the last decade and the witness’s compensation, as the “legal equivalent of Obi-Wan Kenobi’s ‘These aren’t the droids you’re looking for.’”

This attempted diversion—the legal equivalent of Obi-Wan Kenobi’s “These aren’t the droids you’re looking for,” see STAR WARS EPISODE IV: A NEW HOPE (Lucasfilm 1977)—is unavailing.

California Court of Appeals Justice Moore characterized one case in which the parties had conspired “in a despicable scheme” to hide assets during divorce and child support proceedings in terms of the dark side:

This case is somewhat akin to deciding a dispute between Darth Vader and the Borg, or if you prefer a classical metaphor, Scylla and Charybdis. There is no justice to be done here. The parties conspired in a despicable scheme to hide assets during marital dissolution and child support proceedings. The defendants retained those assets; the plaintiff sued to get them back. Both now rely on arguments relating to unclean hands, the sanctity of the judicial process, and public policy, all of which are laughable, considering the circumstances.

One  judge punctuated his commentary on an expert’s testimony in a tortious interference and non-compete case about the “ripple effect of negativity” that contributed to the damage claims with a Star Wars reference-heavy footnote:

I do not credit Mr. Fleming’s testimony, which is not adequately supported or explained and is, at best, highly exaggerated. Even in Star Wars, it took the destruction of a planet to create “a great disturbance in the Force, as if millions of voices suddenly cried out in terror, and were suddenly silenced.” And it took no less a Jedi Knight than Obi–Wan Kenobi to sense it.

Disturbance in the Force

In another employment law dispute over unpaid overtime and meal benefits that had beaten a complex path through the judicial system, the judge described the nature of the procedural history as “similar to a Star Wars bar scene, the procedural history of this action is bizarre.”

With the exception of this select group of Force-savvy  jurists, perhaps it is best for you to leave Star Wars references to the judge. This is illustrated by the following exchange between a trial judge and lawyer in a case where the choice of police line-up participants was at issue.

Counsel: Other than the fact that they shared African American descent, these people were about the same as the denizens of the Mos Isleys [sic] Space Port in Star Wars.

Court: I am sorry. I don’t go to those movies so I have no idea what you are talking about.

Counsel: All right. This is like the British judge who, when there was a reference to the Rolling Stones, said, “the Rolling What,” Your Honor. All we were missing here were the Harlem Globetrotters and the Seven Dwarfs [sic].

Court: In other words, it was in the middle, not to either extreme. Counsel: I don’t think so.

Whether Star Wars references make the law more or less confusing remains to be seen.

pio3 / Shutterstock.com

Galactic Disputes: Judges Channel the Wisdom of Star Wars was originally published on Lawyerist.com.

Categories: Teknoids Blogs

Enemy of the State – Still Topical

slaw - Wed, 05/04/2016 - 07:21

I recently watched the 1998 movie Enemy of the State . It is a spy thriller about a lawyer being smeared by politicians because they believe he has information that can implicate them in criminal matters – the murder of a politician who was opposing a privacy bill that is really a bill empowering mass surveillance. They use sophisticated, unsavoury, unethical, and illegal methods to watch him, discredit him, and retrieve the evidence. No one is watching the watchers, who are out of control.

While like any disaster movie the plot is a bit over the top, it was fascinating to watch the movie again from a 2016 lens. I challenge anyone to watch it and still say “I have nothing to hide” to dismiss privacy and surveillance concerns.

In a related sentiment, a recent study confirms that the knowledge that we may be watched puts a chilling effect on what we do. This Techdirt article is a good summary of that study.

Categories: Teknoids Blogs

Preparing for E-Discovery, Step One: the Client Interview

The Lawyerist - Wed, 05/04/2016 - 06:12

Guest post by Jeff Kerr, CEO and Founder of CaseFleet.

It’s safe to say electronic evidence—text messages, digital photos, cloud storage, and the internet of things—will be involved in every new case you have. As a result, it’s important you prepare to produce and request electronic evidence from the start of your case.

Why You Need to Prep

Early preparation for e-discovery doesn’t only reduce risk, it gives you the best odds of winning your case. Moreover, early preparation for e-discovery is the best antidote to clients who conceal facts or evidence from their own lawyers. Nothing matches the peace of mind you’ll experience from knowing all the facts, good or bad, before you start the formal discovery process.

In this post, I’ll cover the first of three important preparatory steps: the client interview.

Getting Started “To avoid spoliation, you’ll need a clear picture of what evidence your client has and where it lives.”

When you begin working with a client on a new litigation matter, you’ll know something about the facts of the case, but next to nothing about the electronic evidence in your client’s custody. Even inadvertent destruction or modification of evidence can lead to heavy penalties or an outright dismissal of your case. To avoid spoliation, you’ll need a clear picture of what evidence your client has and where it lives.

To do this, you’ll ask a lot of questions, and most clients don’t love answering them. Some clients get nervous because there’s something in their digital lives that they don’t want you to know about. It could be about the case (e.g., evidence that contradicts parts of the client’s story or supports the other side’s claims), or it could be something more personal (scandalous text messages or embarrassing browser history). Either way, it’s better to deal with these problems upfront while you can do something about them (or, alternatively, walk away from the case). In my practice, I helped clients understand the need for my questions by saying the following:

  • “I want you to get the best outcome; that’s my job. To make sure that happens, we’re going to force the other side to turn over emails, files, text messages, digital photos, social media posts, and anything else they have so that we can prove you’re right. They will ask the same things from you, and we have to be prepared. If we don’t have a strong defensive position on discovery, we won’t be able to be aggressive about getting the evidence we need.”
  • “It’s also very important to go over sources of electronic sources so that we can determine a cost-effective preservation strategy. This is the best way to control costs and avoid problems at a later date. If we’re going to win your case, we can’t lose it first because of a spoliation issue.”

Once you’ve gotten over any objections, you can proceed to ask questions about different categories of electronic evidence. Even if you’re an expert on IT issues, it helps to have a checklist or a script, which you can download below:

Download Now

Tailor the questions you just downloaded to your specific case. For example, if a business client was sued by a former employee, then you’ll gather more information about personnel records, compensation data, internal email, HR databases, and the plaintiff’s former workstation. On the other hand, if your client was involved in a slip-and­-fall incident, you’ll focus more on SMS records, geolocation data, fitness tracker data (to verify injuries), and social media (to verify pain and suffering). Also, note that even though the focus is on e-discovery, treating paper documents as part of the same puzzle is a good practice.

Don’t let the questions listed limit your imagination or your follow-up questions in any way. Software and hardware is constantly evolving. Also be sure to take good notes. You’ll come back to them again and again as the case progresses. While your client may find the level of detail puzzling, a thorough interview pays dividends and is a necessary pre-condition for a strong preservation strategy.

Jeff Kerr is CEO of CaseFleet, a platform for helping litigators manage their practices and win more cases. Before starting CaseFleet, Jeff was a managing partner at Mays & Kerr LLC, where he focused on employment litigation and eDiscovery and was selected as a Rising Star in 2015. Jeff frequently writes and speaks on the topics of legal technology and eDiscovery.

Featured image: “Self discovery” from Shutterstock.

Preparing for E-Discovery, Step One: the Client Interview was originally published on Lawyerist.com.

Categories: Teknoids Blogs

Wednesday: What’s Hot on CanLII

slaw - Wed, 05/04/2016 - 06:00

Each Wednesday we tell you which three English-language cases and which French-language case have been the most viewed* on CanLII and we give you a small sense of what the cases are about.

For this last week:

1. Pritchard v. Van Nes, 2016 BCSC 686

[65] I find Mr. Pritchard has proven that Ms. Van Nes’ initial Facebook posts and her subsequent replies to her “friends”’ comments were defamatory, in that they tended to lower the plaintiff’s reputation in the eyes of a reasonable person. The ordinary and natural meaning of Van Nes’ comments unequivocally described Mr. Pritchard as a “nutter”, a “creep”, and an abnormal person.

(Check for commentary on CanLII Connects)

2. Meads v. Meads, 2012 ABQB 571

[1] This Court has developed a new awareness and understanding of a category of vexatious litigant. As we shall see, while there is often a lack of homogeneity, and some individuals or groups have no name or special identity, they (by their own admission or by descriptions given by others) often fall into the following descriptions: Detaxers; Freemen or Freemen-on-the-Land; Sovereign Men or Sovereign Citizens; Church of the Ecumenical Redemption International (CERI); Moorish Law; and other labels – there is no closed list. In the absence of a better moniker, I have collectively labelled them as Organized Pseudolegal Commercial Argument litigants [“OPCA litigants”], to functionally define them collectively for what they literally are. These persons employ a collection of techniques and arguments promoted and sold by ‘gurus’ (as hereafter defined) to disrupt court operations and to attempt to frustrate the legal rights of governments, corporations, and individuals.

(Check for commentary on CanLII Connects)

3. Sobeys West Inc v Alberta College of Pharmacists, 2016 ABQB 232

[34] Further, the Inducement Prohibitions do not add flexibility to the role of the pharmacists so that the health system operates with maximum effectiveness. Although the third principle guiding the legislation, that the health profession regulatory system should be transparent to the public, is not directly at issue, it bears noting that the Inducement Prohibitions are selective in that they do not prohibit, for example, free home delivery of drugs, free parking to the consumers of drugs, the charging of reduced or complete waiver of dispensing drugs’ fees or co-op patronage returns. That selective approach does not appear to be transparent. The fourth objective regarding the regulatory process, along with the fifth objective that the system should support the efficient and effective delivery of health services, is in no way reflected in the Inducement Prohibitions.

(Check for commentary on CanLII Connects)

The most-consulted French-language decision was Rice c. Agence du revenu du Québec, 2016 QCCA 666

[21] Après avoir caractérisé le droit revendiqué par les appelants et analysé la preuve, le juge conclut que les échanges faits à l’intérieur des nations iroquoises – essentiellement des objets à valeur spirituelle troqués à des fins rituelles, sociales ou diplomatiques – n’avaient aucun caractère commercial, de sorte qu’il est impossible de conclure à l’existence d’un droit ancestral de cette nature. Selon lui, le droit éminemment commercial réclamé par les appelants ne constituait pas une activité faisant partie intégrante de la culture distinctive des Mohawks avant le contact avec les Européens. Conséquemment, les prétentions des appelants constituent une extension indéfendable d’activités secondaires d’échanges entre nations autochtones.

(Check for commentary on CanLII Connects)

* As of January 2014 we measure the total amount of time spent on the pages rather than simply the number of hits; as well, a case once mentioned won’t appear again for three months.

Categories: Teknoids Blogs

A Proposal for Automated Online Dispute Resolution, Part 1

slaw - Wed, 05/04/2016 - 06:00

This essay proposes a set of draft standards for automated online dispute resolution (AODR). The drafts I propose here are for transactional disputes, and specifically for AODR that generates arbitral awards in the millions of claims for debt and breach of contract. This proposal does not consider AODR for torts or disputes with non-AODR-compliant evidence or claims.

The AODR promise is simple and a little mind-boggling:

  • Take millions of claims out of the court system.
  • Reduce cost of dispute resolution (pre-enforcement) to zero.
  • Increase speed of dispute resolution (pre-enforcement) to infinity (limited only by bandwidth and machine capacity).
  • Give a previously unheard-of stimulus to economic activity due to a drop in transaction costs.

AODR is technologically and legally possible today. In jurisdictions such as Ontario, Canada, AODR does not require any new laws, government funding or approval, and adversarial court proceedings. I am one of the people working on AODR now, and my goal is to help build an AODR community that can turn these or other drafts into industry standards.

There is a simple reason why AODR is possible today. Litigation consists of three parts: proving facts, determining the applicable law, applying the law to the facts. Any disagreement on any of these steps will give rise to an issue that the court will have to hear and resolve. A great body of civil procedure kicks in before and during such hearings—all because humans tell different stories, and justice requires hearing all reasonable stories.

When facts are simple enough (as they are in many transactions) digital signatures and uniform transaction records deposited into digital escrow eliminate disagreements over facts (and kill stories, alas). The technology to support this exists.

When the law is straightforward (as it is in many transactions, especially if evidence is not in dispute), the law and its application can often be reduced to formulas (loans, interest rates, invoices, payments and so on). If you are familiar with liquidated damages and if you ever had to obtain default judgments, you will probably recognize this.

But without AODR, a bank or a vendor needs to hire a legal professional, who will probably type a claim into a Word document, print it and send it to a courthouse. The plaintiff’s agent will then need to physically present a copy of the filed claim to the defendant (who may be evading service). Often, debtors do not file a defence, and creditors get default judgments. Creditors certainly hope this will happen because the alternative is waiting a few months for a trial or a summary judgment motion which the creditor will win at great expense. Of course, default judgments are tenuous and not final. Defendants can set them aside if there is no good reason to override the normal bias in favour of a hearing on the merits.

Unlike default judgments, AODR awards are final. AODR claims are served electronically and unambiguously. AODR awards are calculable rather than arguable because parties must structure their pre-dispute transactions in an AODR-compliant way to be eligible for AODR. AODR is a creditor/vendor dream, truly. But every responsible economic player will like AODR because it will reduce prices and improve access to credit. Also, there are no attorney’s fees or costs in AODR awards (because AODR cost is zero or negligible), which should make debtors happy.

A draft standard for an automated online dispute resolution system (AODRS)

  1. AODRS will not require a hearing of the dispute in the courts.
  2. AODRS will require a binding arbitration regime in the jurisdiction (such as an arbitration statute or arbitration provisions in the rules of civil procedure).
  3. AODRS will publish its source code.
  4. AODRS will accept the following input:
    1. Parties and their status (claimant/respondent)
    2. Jurisdiction
    3. Award cap (agreed or imposed by law)
    4. Claim amount
    5. AODR-compliant claim type
    6. AODR-compliant evidence
  5. AODRS will generate the following output:
    1. An arbitral award
      1. Dismissing the claim, or
      2. Awarding an amount (greater than zero and less or equal to the claim and less or equal to the award cap) to the claimant.
    2. An error message

An outline of a reference (model) implementation of the standard:

  1. Only subscribers may be parties to AODR.
  2. Subscribers will enter into an arbitration agreement.
    1. The agreement will bind subscribers to
      1. an AODR procedure including dispute types and
      2. AODR-compliant transaction evidence standards.
  3. The implementation will provide a machine-friendly API.
  4. The implementation may provide a human-friendly UI.
  5. The implementation may charge subscribers a fee.
  6. The implementation may use blockchain for parties’ identification and evidence authentication.
  7. The implementation may convert its output to court-friendly format for award enforcement
    1. A court API (long-term—here is to hoping)
    2. A paper-based format (PDF) for service and filing (right now)

A simulation of an AODR proceeding

Example 1: sale of goods

Successful transaction:

  1. Buyer requests a quote (optional).
  2. Seller provides a quote (optional unless step 1 was completed).
  3. Buyer sends seller a purchase order.
  4. Seller accepts or rejects the purchase order (failure to complete or rejection renders the transaction non-AODR-compliant).
  5. Seller delivers goods to the seller.
  6. The buyer accepts or rejects the goods (failure to complete or rejection renders the transaction non-AODR-compliant).
  7. The seller sends an invoice to the buyer.
  8. The buyer sends a payment to the seller.

Dispute:

  1. Any party fails to complete any of steps 1–7 above (except when the transaction is rendered non-AODR-compliant or when steps are optional)—AODR will dismiss the claim for payment.
  2. The buyer fails to complete step 8 (AODR will generate an arbitral award for the amount in the purchase order in favour of the seller; the seller will obtain a court order or writ without notice if enforcement is necessary).

Example 2: loans

Successful transaction

  1. Borrower sends a loan application to the lender.
  2. The lender approves or rejects the application (failure to complete or rejection renders the transaction non-AODR-compliant).
  3. The lender disburses the loan to the borrower.
  4. The borrower repays the loan on the terms of the loan application (two material terms: amount and time).

Dispute:

  1. Any party fails to complete any of steps 1–3 above (except when the transaction is rendered non-AODR-compliant)—AODR will dismiss the claim for payment.
  2. The borrower fails to complete step 4—AODR will generate an arbitral award for the amount computed in accordance with the loan terms in favour of the lender; the lender will obtain a court order without notice if enforcement is necessary.

A draft standard for AODR-compliant evidence

  1. A transaction consists of a set number of steps and parties.
  2. Each party is authenticated before the transaction.
  3. Each party digitally signs and publishes a record of its completion of each step to a public or private ledger (blockchain).
  4. Evidence conforms with the transaction type schema (number and nature of steps).

In sum, the idea is that if transactions are standardized and their records automatically land in electronic escrow, software can resolve disputes over such transactions automatically. Software will output enforceable electronic arbitral awards saving creditors money and time. A great number of transactions are amenable to this process. All eligible contracts, from loan agreements to supply arrangements, should make AODR compliance mandatory. There is enough technology and law to support AODR now.

___________________________________

This is a series of posts that will borrow heavily from your feedback. Please leave a comment if you are interested in this subject.

Categories: Teknoids Blogs

More Than a Google Search: 4 Ways to Assess Your Reputation

slaw - Wed, 05/04/2016 - 05:38

When I ask lawyers how they plan on building their reputations, the answers that I usually hear range from “do whatever I’m told” to “don’t screw up” to “execute my stellar marketing plan”. Of course, there’s more to it than that.

A reputation rests on:

  1. The esteem in which you are held
  2. The respect people have for you
  3. Your perceived level of trustworthiness
  4. The admiration that stakeholders have for your character

Having a “good” reputation means knowing what matters to those whose opinions affect your career. It doesn’t just result in referrals and job offers. It’s also about getting bills paid faster, negotiating power and providing a safety net if a crisis strikes. But how can you assess where you stand?

Do you know what your colleagues look for in someone with a “good” reputation? Making assumptions in this regard usually leads people to a cynical view. Instead, have a conversation with a senior partner, your mentor or your sponsor and ask how you are perceived compared to their expectations.

Do you believe constructive feedback? Let’s face it, constructive feedback can sting. It might not be delivered in the nicest way, either, but it’s useful. From my experience, the lawyers whose reputations suffer most are those who scoff when they are provided with a glimpse of how others interpret their behaviour. Whether the feedback comes from an angry client or a frustrated colleague, show enough character to ask how you can do better.

Do you have a superpower and does anyone know about it? Figure out what would earn the admiration of your clients and colleagues. This usually requires creating or doing something tangible, innovative and perhaps surprising. When you share a skill in a way that lifts others up, your esteem also rises along with perceptions of your leadership skills.

Do you communicate openly and consistently? You don’t have to be a politician to let others know what you stand for, but you do have to be political. Choose a few themes that align your unique values, interests and skills with what others expect and admire. Blog, if you can. And follow the ratio of four supportive communication activities for every piece of news or advice that you share. Not lending a helpful like to your colleagues’ LinkedIn posts or tweets makes you seem tone-deaf and untrustworthy (which is not what you want to be know for, I presume).

This list isn’t exhaustive, but it’s a start. Reputations take time to build, and because there are so many external factors that change, your reputation needs to be re-examined every few years to ensure that your activities still match expectations.

Categories: Teknoids Blogs

Ever wonder how a big site like Stack Overflow handles code deployment?

<CONTENT /> v.5 - Tue, 05/03/2016 - 17:05

We’ve talked about Stack Overflow’s architecture and the hardware behind it. The next most requested topic was Deployment. How do we get code a developer (or some random stranger) writes into production? Let’s break it down. Keep in mind that we’re talking about deploying Stack Overflow for the example, but most of our projects follow almost an identical pattern to deploy a website or a service.

Source: Nick Craver – Stack Overflow: How We Do Deployment – 2016 Edition

Fascinating look into how Stack Overflow code gets from a developers workstation to production servers. There are many good ideas about development workflow in here.

Categories: Teknoids Blogs

My Twitter Digest for 05/02/2016

<CONTENT /> v.5 - Tue, 05/03/2016 - 14:30
Categories: Teknoids Blogs