Archive for May, 2010

Sometimes It’s All About the Optics

Wednesday, May 26th, 2010

Yesterday, Ontario’s former Attorney-General, Michael Bryant, had charges against him dropped.  For those of you who are not in Ontario, last year Mr. Bryant got involved in an altercation with a bicycle rider while Mr. Bryant and his wife were driving in their convertible with the top down.  The result of the altercation was that Mr. Bryant sped off and unknowingly dragged the cyclist to his death.  What really happened that night?  I have no idea.  And I’m not going to get into a debate on the merits of the charge against Mr. Bryant or the decision to withdraw those charges.  Why?  Because I don’t have all of the facts to know whether either or both of the decision to lay charges or the decision to withdraw them was proper.  The only things I am certain of are: (a) this was an unfortunate loss of life; (b) it will be argued that the only reason Mr. Bryant was charged was because of who he was – that is, if he wasn’t charged then cries of preferential treatment would have been made far and wide; and (c) preferential treatment allegations will be made far and wide with the decision to withdraw the charges.

The key aspect, though, is one of optics.  Mr. Bryant had to be charged (so the theory would go), because of who he was.  Similarly, no matter the merits of the decision to withdraw the charges, the issue of the optics of potential preferential treatment will also be raised.  These are not unimportant issues because one has to remember, after all, that the court system is a human system.  Optics can be sometimes just as important as the facts.  And, to take it one step further, sometimes where there are no facts, then optics can become just as important.  Let me give you a quick example.

I was speaking with a potential client the other day who wanted to bring a claim against another person on the basis of an alleged contract.  The contract was never put in writing.  This is not fatal but it immediately leads to an opportunity for the other person to say that either there was no contract or else that the terms were radically different from what my potential client said were the contract terms.  Even though the lack of writing was not fatal, because there could be a question of whom the Court should believe, we then had to look to the “optics”.  In this sense, optics come from the circumstances and how the parties acted – or in this case failed to act.  My potential client was willing to swear on a stack of Bibles that there was a contract and what those terms were and that there had been a full-blown breach of the contract.  The problem, though, was that the potential client did absolutely nothing about this breach for almost two years.  No complaints, no e-mails, no letters, nothing.  And now the potential client will have to ask the Court to find that not only was there a contract, but that it was seriously breached and that the potential client’s failure to do anything about it was simply an oversight.  Again, not impossible, but it certainly is not an easy task to achieve.

Another quick example.  It is said that if you have 5 witnesses to an accident you are likely to get 5 different versions of what happened because people will focus on different things or they may have had different vantage points from which to view the accident.  Whose version of events should prevail?  Again, an issue of optics in terms of the lawyer making the preferred witness look like the most credible person.

All of this is to say that if you are, or you think you are, in a dispute with a supplier, customer, creditor, etc., you should focus not only on the main issue but also give some consideration to optics.  For example, you can write back and say that the supplier’s goods were nothing but *()&^!! pieces of ^&*(%!, OR you can say that you were displeased with the goods and set out the key reasons.  The result may well be the same and it is not even a matter that the latter version will achieve a resolution whereas the former will not – I will assume that the supplier will disagree no matter how nicely you put it.  But, if you come across looking like a jerk (for lack of a better word), the Court will be less inclined to give you the benefit of the doubt.  And if the facts are either not completely in your favour or they are fairly easily balanced, then you may well need the benefit of the doubt – and it could be the optics of the matter that prove to be determinative.

Something to think about.

CALC

Dealing with the Tax Man

Monday, May 17th, 2010

I’m sure you’ve heard the competing ads on the radio over the past year or so.  The first is from a fairly well-known law firm that says that they have the way to deal with the tax man and that they can use the power of solicitor-client privilege to protect you and that you can’t get this from an accountant.  The second is from an accountant who says “you don’t really think that Revenue Canada is going to put you in jail, so you really don’t need to pay for an expensive lawyer.”  Who’s right?  Both are.

There is a case from many years ago called Tax Time where the Court held that there is no such thing as “accountant-client” privilege.  So, the law firm is correct when they say that if you tell everything to your accountant then Revenue Canada could turn around and haul the accountant in and require him/her to disclose all of your information.  (Whether they would actually go to all this trouble is another question.)  Revenue Canada could not do that if the information is covered by solicitor-client privilege.  However, the flip side is true in that lawyers are expensive – although, I generally find myself envious that I cannot charge the amounts charged by many accountants, so it’s a bit ironic that the accountant is suggesting that the lawyers’ fees are too high.  I can give one example where I was consulted by a potential client who had gone to the other law firm and that firm had asked for a five figure retainer just to review the potential client’s file and determine whether the client had a valid claim.  Not cheap, to say the least.  But in all fairness, it’s not often that you can simply pick up a tax file, leaf through a few pages and be able to give a definitive answer.  It usually involves a lot of time and requires them to go through a lot of documents and if they don’t get the money up front and it turns out that there’s nothing that can be done, you can be guaranteed that the client will turn around and say “oh well, thanks” and then never pay the bill.  So, not cheap, but I sure as heck don’t blame them for asking for the money up front.

Is there an alternative?  It’s possible that there is.  I was introduced to a new web site and service yesterday for Taxpayer Relief Letters.  The program is run by Frank Flynn whom I knew when he was at Revenue Canada before he left years ago.  After several years working in another industry, he has returned to the tax area and has started his new business.  If your business is suffering financially and Revenue Canada is coming after you AND you don’t have an overly-complex matter, it looks like this service might be of interest and assistance to you.  They will take your information and prepare it in a letter or other format that will speak to Revenue Canada in its own language and assist you in making your point for why you shouldn’t pay as much (or any) penalties or interest.  Depending on the nature of your problem and the amount at stake in terms of the penalties and interest you are facing, this could well be a worthwhile alternative.  I would commend you to check out their web site.  If nothing else, it’s nice to have as many options as possible.

Something to think about.

CALC