The Law of Trusts and foreign investors – throwing the baby out with the bath water

February 11, 2018

According to Wikipedia “the trust is considered to be the most innovative contribution of the English legal system. Today, trusts play a significant role in most common-law systems, and their success has led some civil law jurisdictions to incorporate trusts into their civil codes.”

So, it may come as a surprise to some that our British Columbia government is considering running amok through the venerable law of trusts, a centerpiece of the English common-law system since sometime in the 12th century, in order to close a perceived tax loophole enjoyed by a few foreign investors. Exactly what the Legislature intends to do isn’t clear, but their rectnt rhetoric suggests that they view the use of trusts in real estate transaction as somehow evil and sleazy.

At issue is the fact that our land title office records only the legal, or registered ownership of a property and does not identify “true” or “beneficial” ownership, which   may rest with someone else entirely, if trusts, ( or even corporations) are  involved. In a trust, one person, the “trustee”holds title to a property for the benefit of another person – the “beneficiary”. Such arrangements are private and unrecorded, so can easily disguise the actual ownership of property by a non-resident.

It is somewhat ironic that the concept of  a trust was initially developed precisely to safeguard the rights and property of a group of non-residents – the crusaders, who needed a mechanism to have their estates held and managed for them while they were off in the Holy land chopping off heads, and, equally as importantly,  later reliably handed back upon their return.

When BC imposed its 15% foreign buyers tax, I’m guessing it took most lawyers on average less than  three minutes to figure out that the judicious use of a trust arrangement could completely avoid the imposition of the tax, and a year or so behind, the government has now belatedly come to the same conclusion, referring to bare trust arrangements  as a heinous “loophole.”

I find “loophole” to be a rather pejorative description of one of the foundations of our legal system, There is nothing shady or nefarious about Trusts. They are used daily, often employed for the protection of the young, or the disadvantaged, as well as for wealth preservation, and tax planning. They are a tool, like any other, capable of use by both good guys and bad

I worry that, in attempting to stem the tide of diry money washing into the Province the governmnet may foolishly start tinkering with the law of trusts, rahter than tackling the probelm directly such as by banning the recipt by casinos of hackey gags stuffed ful lof  smal ldenomination  bank notes.

Uber for Lawyers

January 15, 2018

I have a large file bucket in my den where I throw all my scribbled notes  concerning business ideas, blog posts and the like. I sift through them periodically  in search of inspiration, and I’m always surprised at how many relate to the topic of change in the legal profession. Disruptive change is coming , and the possibilities fascinate me.

Last week I came across a rather cryptic “note-to self” that said only “Uber for lawyers”- it was an aide -memoir scrawled on the back of some printed material from a lawyers retreat I had attended with lawyers from my previous firm last year.

Fleshed out, the idea  runs something like this: we as lawyers  (especially those of us who practice in suburbia) spend an inordinate amount of time commuting to, and cooling our heels at, mandatory, but low or no value court appearances – showing up to fix trail dates, for pre-trial conferences, arraignments, and other assorted  procedural matters. Often these appearances take only a  very few minutes of court time, but consume half a day or more of the lawyers time, which the hapless client must pay for.

There ought to be a better way! so what if you could somehow connect with another lawyer who was going to be languishing in line in the same court, and pay him or her to make the appearance for you? We have long used ad-hoc “agency” arrangements for these nuisance  court appearances, but it can be frustrating and time consuming trying to track down an appropriate agent. We need an Uber to act as matchmaker and payment processor.

Well, I suspect that the folks at Vortex Law must have sulked  into my den  in the dark of night and rifled through my “great ideas” file, because they have stolen my idea, and have now launched a website where  law firms needing a warm breathing body in a particular court on a particular day, can shop the gig to a roster of pre-vetted lawyers. Looks like the service is only available in the US for now, and they are focusing on States like California, which are renowned for their time-sucking court appearances . but its only a matter of time before the service is available here.

Two questions remain, will the Vortex service actually help to reduce the cost of litigation, and , will this Uber for lawyer launch in Vancouver before Uber itself gets off the ground?

I, (law) Robot !

January 13, 2018

As  lawyers we have long been accustomed to the rigours of competition in the marketplace- there is a surfeit of lawyers on the street, and we are all jostling for the same clientele – ( that  elusive sub-set of the general adult population that has legal trouble and  enough coin in their pocket to pay to get out of said trouble), Read More

Love on the Blockchain

January 12, 2018

When I posted a light-hearted piece last month  proposing a form of written permission be signed before attempting to snuggle with a new love interest -( just to avoid  misunderstandings )-  I thought I was engaged in humour of the absurd, but now I discover that such consent forms are actually a ‘thing ‘- and a Dutch legal tech firm is marketing a version ( and here I was giving it away for free-!) not only that, but they are putting it on the blockchain!

The firm is Legalthings One, and their product, which has been announced in the legal forums online,  but hasn’t made it onto their website yet, is called “Legal Fling”. Its a smart phone app, that allows users to agree to a variety of consensual bedroom behaviours. With a simple swipe ( much less intrusive than wiping out  a pen and paper, in the heat of the moment) the users time stamped consent is recorded and uploaded to the Blockchain.

For the uninitiated, blockchain technology is a type of distributed ledger keeping, where data ( like a legal consent) is securely and simultaneously  recorded on a large number of widely dispersed computers, all of which have to “agree” in order to verify the authenticity of a piece of data, making the stored data incredibly secure. Data secured by a  blockchain is considered tamper-proof, and can be  utterly relied upon.

This new technology is getting a lot of attention in the legal community, where it has obvious applications in such things as verifying the  authenticity of a contract, which may have gone through many many revisions  by multiple parties. Some pioneers are even advocating  doing away with land title offices , in favour of a blockchain land registry, but I have to hand it to our Dutch colleagues, a boudoir blockchain is really thinking  outside the box !

Seems my old law school prof. was right – the law of contracts can be fun !

And Goodwill to all Mankind

December 24, 2017

As a very young lawyer I had the opportunity to act as junior prosecutor  in a jury trial involving a crime which had occurred in the aftermath of a drunken party on a local first Nations Reserve. I was given the task of leading the evidence of a number of peripheral witnesses, all of whom had attended the bash and had observed the actions of the accused during the evening. All of these witnesses were First Nations.

The presiding judge was Mr. Justice Thomas Burger, who had spent much time in First Nations communities. at the first recess counsel were called into the judge’s chambers and I was gently upbraided by the judge, who drew my attention to the fact that I had been addressing the native witnesses by their first name, whereas white witnesses were being addressed by their title and surname. Although the lapse was completely unconscious I was hugely embarrassed to be called out on my patronizing behavior, and chastened, resolved to guard against such bias in the future. I would, in future, treat all participants in the trial process with the respect they deserve, regardless of race. It is a resolution which I hope I have kept over the years.

I was reminded of Mr. justice Burger’s admonitions recently when I chanced upon an article by Lauren Murrow in the August 2017 edition of Wired magazine  reporting on the research of Dr. Jennifer Eberhard, a social psychologist at Stanford University, who uses data obtained from police body cam footage to recognize patterns of racial disparity when traffic cops interact with members of the public.

Police Body cam transcripts  can now be scanned  and analyzed using newly developed software, for both subtle and not-so-subtle differences in the way police interact with blacks or whites. Dr. Eberhardt’s conclusion is that police are more likely to use abrupt and less respectful language when dealing with African Americans  than with whites. White drivers were more likely to be addressed as “Sir”, for example, and more formal vocabulary employed. When dealing with black drivers often more colloquial language was used,coupled with a more words of command.

The team at Stanford University has built a computer model which can predict the race of a driver interacting with the traffic cop with 68% accuracy based only on the nuances found in the police officers speech.

Machine learning and transcript analysis software have offered another demonstration of what most of us sense intuitively already; that subtle racism exists in our society and can often be manifested, even unconsciously, by those  of us who believe ourselves to be free of prejudice.

Something to think about during this season of ‘goodwill towards all mankind’ and with the season of resolutions just over the horizon.

What will your resolution be?