Transfer of CCACs to LHINs is complete

Bill 41, the Patients First Act, provided for the CCACs to be merged into the LHINs by Ministerial order.  That process is now complete.  The CCACs began transitioning on May 3rd with the North Simcoe Muskoka LHIN, and ended on June 21st with the Central East LHIN.

Below is the summary chart showing the transfer dates for the LHINs:

LHIN Transfer Date
NSM May 3, 2017
HNHB May 10, 2017
WW May 17, 2017
SE May 17, 2017
SW May 24, 2017
CHAM May 24, 2017
MH May 31, 2017
CW May 31, 2017
NE May 31, 2017
TC June 7, 2017
CENT June 7, 2017
ESC June 21, 2017
NW June 21, 2017
CE June 21, 2017

 

CASL – important developments and enforcement updates

Big news last week about CASL (Canada’s anti-spam legislation) – the right of private action, which was scheduled to come into effect on July 1st, was indefinitely delayed by an Order-in-Council issued by the Federal Government on June 7.

This is a relief for every organization, whether for-profit, non-profit, orcharitable. The right of private action was generally being met with dread – it allowed for private litigants to sue for any breach of specific sections of CASL and to claim for significant damages. Those damages included statutory damages of up to $1 million per day for violations.

Enforcement activity since 2014

However, this development doesn’t mean that CASL is toothless. Far from it. Fines under CASL are a maximum of $10 million per violation for businesses/organizations. That’s huge.

I attended an update on CASL put on by the CRTC for the Ontario Bar Association in mid-May. There has been a lot of activity around CASL enforcement since CASL came into effect 3 years ago (July 1, 2014). Here are a few tidbits that I learned about:

  • In lieu of prosecutions, the CRTC tends to pursue “undertakings” when an investigated complaint reveals an apparent violation of CASL
  • These undertakings require the offender to implement a robust compliance program
  • Undertakings are accompanied by a reparation payment (in lieu of a fine/penalty)
  • These reparation payments are substantial:
    • Porter $150K
    • Rogers $200K
    • Kellogg’s $60K
    • Blackstone $50K
    • William Rapanos (individual) $15K
    • Compu-Finder $1.1M (being contested)
  • The ability of the offender to pay is taken into account as one of the factors in determining an appropriate payment. For example, Blackstone is a small business, resulting in a significantly reduced penalty. Still, $50K is a huge amount for any small business to pay.

Deemed implied consent – 3-year grace period ends July 1

Remember, CASL requires that your organization have consent (express or in some cases implied) when sending commercial electronic messages (CEMs). (To be “commercial”, the email/text must be trying to get people to buy a product or service.)

There was a 3-year grace period in which organizations were allowed to email current and former donors, members, volunteers and those with business relationships. That grace period ends on July 1, 2017. After that, the list of individuals to whom your organization can send CEMs is limited to a 2-year ever-refreshing window – you can only email with implied consent if you have had contact with the individual (as a donor, member, volunteer or for business purposes) for 2 years from the date of that contact.

How to be CASL compliant

What also became evident is that your organization needs to have a CASL policy, undertake and update CASL training of all staff, and monitor CASL compliance. If your organization becomes the subject of a complaint/investigation about CASL, you need to demonstrate good record-keeping – i.e., keeping screenshots of subscribes to newsletter lists and emails containing express consent to receive CEMs.

The CRTC update also offered these additional bits of information:

  • Non-profits are “not bubbling to the top” of the enforcement radar, which is good news for the health sector
  • Sending a survey is not a CEM.

The CRTC’s slides were available to attendees. If anyone is interested in receiving a copy, please let me know.

DDO’s CASL Toolkit for the non-profit and charitable sectors

DDO Health law published a “CASL – Anti-Spam Toolkit” in June 2014 targeted at assisting non-profit and charitable organizations to become CASL compliant. Copies are available for purchase – please contact me if interested.

Congratulations to Mary Jane Dykeman

Our founding partner Mary Jane Dykeman has been named by the Ontario Bar Association Health Law Section as the second recipient of the Susan Hilary Davidson Memorial Award for Excellence in Health Law.  The award honours lawyers with outstanding achievements in health law.

Mary Jane is a most worthy recipient, having written and lectured prolifically throughout her career on topics close to her heart, including privacy, mental health, and consent and capacity.

The award will be presented to Mary Jane at a dinner at the OBA in Toronto on June 13th.

The award was named for Mary Jane’s good friend Susan Davidson, who was herself an amazing health lawyer and devoted OBA Health Law Section volunteer.

We are all so proud of our colleague!

“Best efforts” in a contract means what?

Have you ever signed a contract that imposed an obligation on you to make “best efforts” to achieve something (like obtain a landlord’s consent, or a regulatory approval)? This might seem to be an innocuous turn of phrase with a simple, common sense meaning, but as with so many things in contracts, the words “best efforts” have a particular legal meaning, and it’s surprising how many lawyers, not to mention their clients, have only a vague idea what that meaning is.

That’s not to say that the phrase fails to set off alarm bells with lawyers, amongst whom there is much gnashing of teeth as to the different standards that might be set by a requirement for “best efforts”, compared to merely “commercially reasonable” efforts (or confusing hybrids like “commercially reasonable best efforts”, and similar formulations such as “bona fide efforts”). Part of this stems from confusion, and part from some scary-sounding words in pronouncements of the courts over the years. According to the Common Law, this is what “best efforts” means:

  1. “Best efforts” imposes a higher obligation than a “reasonable effort”.

 

  1. “Best efforts” means taking, in good faith, all reasonable steps to achieve the objective, carrying the process to its logical conclusion and leaving no stone unturned.

 

  1. “Best efforts” includes doing everything known to be usual, necessary and proper for ensuring the success of the endeavour.

 

  1. The meaning of “best efforts” is, however, not boundless. It must be approached in the light of the particular contract, the parties to it and the contract’s overall purpose as reflected in its language.

 

  1. While “best efforts” of the defendant must be subject to such overriding obligations as honesty and fair dealing, it is not necessary for the plaintiff to prove that the defendant acted in bad faith.

 

  1. Evidence of “inevitable failure” is relevant to whether a failure to make best efforts actually caused any damage. The onus to show that failure was inevitable regardless of whether the defendant made “best efforts” rests on the defendant.

 

  1. Evidence that the defendant, had it acted diligently, could have satisfied the “best efforts” test is relevant evidence that the defendant did not use its best efforts.

 

It’s a sometimes dim memory of the phrase “leaving no stone unturned” that causes anxiety and drives lawyers to recommend to their clients that they assume only a duty to make “commercially reasonable” (or “reasonable commercial”) efforts. The fear is that turning over every stone amounts to a legal obligation to bankrupt yourself, if that’s what it takes, but does “best efforts” really mean a party has to go to commercially unreasonable lengths to get the thing done? Note paragraph 2 in the list above – “‘Best efforts’ means taking, in good faith, all reasonable steps…”.

This seems to mean that best efforts and reasonable efforts are one and the same, but it’s hard to take comfort in the “reasonable” language in paragraph 2, since, as set out in paragraph 1, the courts state flatly that “best efforts” imposes a higher obligation than “reasonable efforts”; and while that might seem to be contradicted by the notion of “reasonable” steps, note how, in paragraph 3, the law then equates “reasonable” with “no stone unturned” (no reasonable stone, perhaps?).

It’s to avoid the possibly onerous obligation to “leave no stone unturned” that lawyers recommend their clients assume only an obligation to make “reasonable efforts” instead, and even here, there is doubt, since it isn’t clear that “reasonable” means the same thing as “commercially reasonable” – there’s no guidance from the courts to make that clear. In fact, despite lawyers playing around with all sorts of formulations, such as “reasonable best efforts”, we really only have any degree of certainty about two phrases: “best efforts” and “reasonable commercial efforts”.

Here’s what the Ontario courts have said about “reasonable commercial efforts”:

 

Reasonable implies sound judgment, a sensible view, a view that is not absurd. Commercial means having profit or financial gain as opposed to loss as a primary aim or object. These words impose a standard of reasonable commercial efforts, not one of best efforts or bona fide efforts.

So there you have it. “Reasonable commercial efforts” means efforts that are reasonable in view of the overall objective of coming out ahead in the deal, and that’s different from “best”, from “bona fide”, and maybe from just plain “reasonable”, too, if we are to infer that the word “commercially” also influences the analysis (perhaps “reasonable” equates with “possible”, while “commercially reasonable” means “possible plus not too unprofitable”?). It can all seem like arcane hair-splitting, but as long as the courts are going to insist there’s a distinction, however illogical it might seem upon close reading of their reasons, it does seem prudent to prefer “reasonable commercial efforts” for your own obligations, and “best efforts” for the other side, if they can be persuaded. All other variations should be avoided, however similar they may seem from a practical perspective. We just can’t be sure what a court would do with them.

CFTA will replace AIT this summer

The Agreement on Internal Trade (AIT) will be replaced by the Canadian Free Trade Agreement (CFTA) on July 1, 2017. The AIT has been in force since 1995 and its purpose was to improve interprovincial trade by removing trade barriers and harmonizing standards across provinces.

Ontario health care organizations that are subject to the BPS Procurement Directive rely on AIT exemptions to allow them to sole-source or single-source in specified circumstances.

DDO Health Law is undertaking an analysis to identify what has stayed the same in the CFTA – and what has changed with respect to procurement rules, thresholds and exemptions. How will this impact your health care organization? Stay tuned! We will post more!

See the CFTA and more background info at:

http://www.ait-aci.ca/agreement-internal-trade/cfta-announcement/

If you have any questions about how the CFTA may impact your health care organization and its procurement activities, please contact me at kobrien@ddohealthlaw.com.

And follow me on Twitter @KathyOB_DDO and follow DDO @DDOHealthLaw.

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