Business Law 1 Module 1 The Canadian Legal System

Lectures and handouts by: Barbara Cox 1

Business Law 1 Business Law in Canada Richard Yates 8th edition Readings as noted in the Module Notes

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Business Law 1

Ethics Readings Handbook (ERH) 3rd edition

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Business Law 1 • Glossary @ page 608 in text • Online Law Glossary • Use for definitions of legal terms

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Business Law 1 Introduction to Business Law 1 • Found at beginning of Module Notes • Review this Introduction • See note regarding provincial jurisdiction

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Business Law 1 Use of Audio Recordings & Slides • The audio & slides are meant to be used together • Neither is suitable as a stand alone resource

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Business Law 1 Contradictions: -

If I inadvertently contradict the Module Notes, the Module Notes are deemed to be correct

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Business Law 1 The Exam • I have not seen the exam, nor will I see it prior to you writing it!

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Business Law 1 The Exam – Past exams are not updated

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Business Law 1 Technical Updates & Information Bulletins • Students responsibility to review • May be delivered during the course

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Business Law 1 Administrative Issues • Business Law 1 lectures focus on course content • For CGA administrative policies and procedures students must contact their local CGA office

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Business Law 1 Module 1: The Canadian Legal System

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Module 1: The Canadian Legal System 1.1: Nature of Law 1.2: Categories of Law 1.3: Origins of Law 1.4: Sources of Law 1.5: The law in Canada 1.6: Human Rights Law 1.7: The Canadian Charter of Rights & Freedoms 1.8: The System of Courts 1.9: Using the Courts 1.10: Legal Costs 1.11 Alternatives to Court Action 1.12: Advantages & Disadvantages to ADR 13

Business Law 1 Module 1.1: Nature of Law – Pages 13-17 – Pages 20-21

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Nature of Law Law:

- a body of rules that can be enforced by the courts or by other government agencies

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Nature of Law

What makes a law? 1.

Has to be made by the proper authorities

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Has to be enforceable by the proper authorities

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There must be sanctions for disobeying the law eg. Fines, penalties or imprisonment 16

Nature of Law Moral Rules: - not legally enforceable - not enforced by the courts or other government agencies - can be the same as legal rules, for example, it is morally & legally wrong to steal or murder - may be more stringent than enforceable laws 17

Nature of Law Example: Law: Shops & Businesses may open on Sunday Moral Rules: Sunday shopping may be allowed, but Sunday openings are against religious or moral standards

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Nature of Law Ethical Behaviour • Unethical behaviour can result in discipline by governing professional body • Even where no crime has been committed

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Business Law 1 Module 1.2: Categories of Law • Page 21

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Categories of Law

There are: -Substantive laws -Procedural laws

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Categories of Law

Substantive law: -accumulated laws which govern our society - laws which regulate & define our rights

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Categories of Law

• Procedural law: - how the substantive law is enforced - The method through which the substantive law is enforced

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Categories of Law

• Laws are either Public or Private

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Categories of Law • Public laws: • Laws which apply to everyone across the country • Govern the relationship between governments, or governments & individuals • Legal proceedings are started by the Crown, or are against the Crown • Include criminal law, tax law & constitutional law 25

Categories of Law

• Private laws: • Govern the relationships between individual people = actions by people against people • The government is not involved • Include contracts, torts & trusts

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Categories of Law • There are different rules & procedures for private and public laws eg. Burden of proof for a criminal law = beyond a reasonable doubt Burden of proof for a tort = on the balance of probabilities

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Business Law 1 Module 1.3 Origins of Law • Pages 22-25

Module 1.4: Sources of Law • Pages 25-27

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Origins & Sources of Law • Civil law system is based on codified laws • Judges may only base their decisions on what is stated in the code

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Origins & Sources of Law

• Common law system follows the use of precedents

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Origins & Sources of Law The Use of Precedents, or “Stare Decisis” – Judges make decisions based on how previous similar cases were decided – a previous case becomes the authority for how future cases are decided – “stare decisis” – let the previous decision stand

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Origins & Sources of Law Precedent Cases & Stare Decisis: – Must be a decision of a higher court & the same province, or of the Supreme Court of Canada – Judges must follow binding precedents unless they can distinguish the case on its facts – Allows for stability & predictability

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Origins & Sources of Law – Judges must follow binding precedents unless they can distinguish the case on its facts – Allows for stability, predictability, consistency – Judges will distinguish a current case from the precedent case in order to not follow a “bad” precedent

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Origins & Sources of Law

The Law of Equity • Developed due to the rigidity of the common law • Courts of Chancery or Equity decided cases on their merits • Equity prevails over common law 34

Origins & Sources of Law • Courts of Equity merged with the common law courts around 1875 • Equitable principles are still applicable in many current legal cases, for example in trusts and unconscionable transactions • Equity prevails over common law

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Origins & Sources of Law Statute Laws • are parliamentary enactments, made by the legislature • statute law overrides any existing law on the same point

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Origins & Sources of Law Can - codify the common law - create new laws - change existing laws

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Business Law 1 Chapter 1.5: The Law in Canada • Pages 27-36

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Confederation, the Constitution & the Division of Powers

A constitution is the rules, both written & unwritten, that define the fundamental structures of the state.

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The Constitution

Canada has 2 important constitutional acts: 1. Constitution Act (1867) 2. Constitution Act (1982), which includes the Charter of Rights and Freedoms

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Constitution Act, 1867

• Set up the fundamental structures of the state, the executive & judicial branches of government • Set up the division of powers between the federal & provincial governments • S. 91 & 92 of the Constitution Act • S. 91 – “peace, order and good government” 41

The Constitution

Canada is a federal state • Different levels of governments have jurisdiction over different matters • Any powers not specifically delegated are federal • Courts decide jurisdictional disputes

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Constitution Act, 1982

• Contains the Charter of Rights & Freedoms • Effected parliamentary sovereignty

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Business Law 1 Module 1.6: Human Rights Law • Pages 36, 50-55

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Human Rights Legislation

Human rights Codes: federal or provincial

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Human Rights Codes

Federal: -Canadian Bill of Rights, 1960 -Applied only to the federal government

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Human Rights Codes • Provincial: -valuable as they apply to private relationships -not entrenched, apply only within the jurisdiction of the government that adopts the code -easily amended

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Business Law 1 Chapter 1.7: The Canadian Charter of Rights & Freedoms • Pages 37-50

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Charter of Rights & Freedoms

• In Constitution Act, 1982 • Cannot be repealed by an ordinary act of Parliament

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Canadian Charter of Rights & Freedoms • Applies only to the government – Controls all government agencies – Does not apply to private relationships

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Charter of Rights & Freedoms

• Rights are not unlimited: – s.1: reasonable limits – s. 32(1): only applies to government – s. 33: override clause – law valid for up to 5 years

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Charter Provisions • S.2: fundamental freedoms • S. 3 - 5: democratic rights • S. 6: mobility rights • S. 7 - 14: legal rights • S. 15: equality rights

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Business Law 1 Module 1.8: The System of Courts • Pages 59-66

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The Court or Trial Process

• Canada has an open-court policy • In-camera proceedings for security or sensitive matters • Courts hear both private matters & public matters

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Differences in Civil & Criminal Trials

• The Parties are different: – Criminal: Crown vs Accused – Civil: Plaintiff vs Defendant

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Differences in Civil & Criminal Trials

• Procedure: • Different procedures – Civil cases involve the exchange of written documents

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Differences in Civil & Criminal Trials

• Proof: – Criminal: proof beyond a reasonable doubt – Civil: proof on the balance of probabilities

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Differences in Civil & Criminal Trials

• Outcome: – Criminal: jail, fine or other court-ordered process – Civil: damages, injunction, specific performance

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Using the Courts

• Canada has a pyramid court structure: – Lower level courts – Superior courts & provincial appeal courts – Supreme Court of Canada

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Federal Court System • Hears federal matters over which the federal government has exclusive jurisdiction • 3 levels: – Tax Court of Canada – Trial Division of the Federal Court – Appeal Division of the Federal Court – Final appeal to the Supreme Court of Canada

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Business Law 1 Module 1.9: Using the Courts • Pages 66-72

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From pre-trial to judgment

Must have: 1.

Standing to sue

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Must be within limitation period

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Must sue in correct jurisdiction

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Jurisdiction May be defined in several ways: – By the type of cases heard eg. Criminal vs family

– By the geographical area eg. B.C. vs Ontario

– By the value of the claim eg. Small Claims for claims up to $25,000 in British Columbia 63

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Civil Litigation Process

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Plaintiff files writ of summons

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Defendant files an appearance

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Pleadings begin: Statement of Claim Statement of Defence Counterclaim Discovery

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Civil Litigation Process 5.

Pre-trial conference

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Trial

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Judgment

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Findings • Damages - general - special - punitive • Specific performance • Injunction • Declaration as to rights • Order as to costs

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Business Law 1 Module 1:10: Legal Fees • Page 72

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Costs

• Paid by unsuccessful party, in addition to any damages awarded

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Party & Party Costs

– Only a portion of the actual costs incurred – Set out in a published tariff – Party & party costs are the usual costs awarded

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Solicitor-client costs

• Awarded in special circumstances – For example, a frivolous or vexatious claim • Include actual costs, lawyers fees

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Legal Costs Risks to Successful Party • Not all fees of the lawsuit are covered • Difficulty in collecting an award • Court decision may be appealed, with a long delay

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Legal Fees Retainer – Paid by client in advance – Works as a deposit on fees & disbursements – Held in lawyer’s trust fund

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Legal Fees Lump Sum Payment •

Fixed fee for a particular task

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eg. Agreed upon price for a will

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Legal Fees Hourly Fee • Itemized list of time spent provided • Fee based on number of hours spent • Rate charged usually based on lawyer’s seniority

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Legal Fees Contingency Fee Basis • Lawyer charges a percentage of proceeds of successful lawsuit • Frequently used for motor vehicle claims and product liability cases

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Legal Fees Disbursements • Paid by lawyer on behalf of client’s case • Are costs such as court fees, expert’s opinions • Client reimburses lawyer

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Business Law 1 Module 1:11: Alternatives to Court Action Page 84

Module 1:12: Advantages & Disadvantages of ADR Pages 84-90

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Alternate Dispute Resolution Negotiation • Either casual or formal meeting between the parties, perhaps through representatives, to try to solve the dispute • Non-binding

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Alternate Dispute Resolution Mediation – Mediator chosen by the parties – Helps facilitate a non-binding settlement

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Alternate Dispute Resolution Arbitration – Arbitrator chosen by parties – Passive role – Makes a binding decision

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Why Use ADR? Advantages: • • • • • • •

Flexibility Less adversarial Less expensive Speed & finality Confidentiality Choice of decision maker Certainty & enforceability 81

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Why Use ADR? Disadvantages: • Stare decisis not followed • Procedural law not required

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