Insurance in the COVID-19 Era, Can Insurance Save Your Business? This is a time of great uncertainty where businesses are incurring losses and extra expenses due to the coronavirus. The question is: who has to bear these losses? Is it the businesses themselves? Government? Insurance? Your company may have insurance that can help save your business during these unprecedented times. This article does not constitute legal advice What Insurance Does the Business Have? Property/Business Interruption Act of God/Force Majeuere Commercial General Liability Policy Umbrella or Excess Policies Civil Authority Extension All Risks Policy Environmental Insurance Policy Event Cancellation Policy Infectious Disease Endorsement Non-Physical Damage Endorsement Pandemic Endorsement A Policy With Specialized Wording What Is Business Interruption Coverage? Business interruption insurance is intended to indemnify a business for its loss of profit and additional expenses that arise due to an insured peril.[[i]] What Is “Act Of God” Coverage? “Act of God” or “Force Majeure” in insurance terms is a damaging event that is beyond human control, for example, an earthquake or a hurricane[[ii]]; however most policies have specific exclusions for natural disasters and viruses under the excluded perils exclusions in its policies. Does the Commercial General Liability Policy Provide the Necessary Coverage? Many Commercial General Liability Policies provide business interruption insurance but unfortunately, many businesses only have such coverage under their commercial property insurance policy.[[iii]] If that is the case, business interruption arising out of property damage may trigger the policy but an event such as coronavirus is unlikely to do so if the claim is for lost income due to loss demand in this coronavirus era. That said, if the business is unable to operate due to the presence of the contagion in the premises, then more questions should be asked.[[iv]] For example, if a manufacturer of food has to shut down while the facilities are disinfected, it becomes a more interesting question, than whether the facilities are losing revenue because the demand for its product has fallen. Another thing to consider is whether there was “Act of God” coverage under the commercial general liability possibility.[[v]] Umbrella and/or Excess Policies These policies should be reviewed to consider whether they could be triggered. Infectious Disease Endorsement A business should determine if it has an infectious disease endorsement that may provide coverage for losses by infectious or communicable diseases. This may provide COVID-19 coverage for losses.[[vi]] Non-Physical Damage Endorsement Similarly, a business should consider if it has a non-physical damage endorsement as it may provide coverage for COVID-19 losses.[[vii]] Civil Authority Endorsement Civil authority endorsements relate to situations where access to the premises is prohibited by civil authority. Often the length of time may be specified such as 2-4 weeks.[[viii]] Issues will need to be considered about mandatory versus voluntary closures and whether there is a partial versus a complete closure and whether there was COVID-19 present versus a closure to prevent its presence. All Risks Policy The wording of the policy will need to be considered. This may be an area where COVID-19 claims may be covered through an argument that COVID-19 presents an identifiable risk to human health and safety. Litigation will likely be needed to determine if a virus is a “direct physical loss” under an All Risks policy. Environmental Insurance Policy Another policy that should be considered is an environmental loss policy. An environmental policy may cover losses from coronavirus if it covers biological contaminants and/or viruses and/or communicable diseases. It would need to cover indoor loss exposure. Many will not meet these criteria but they should be considered.[[ix]] Event Cancellation Policy Many events such as trade shows, festivals, sporting events, conferences, theatre and concerts may have event non-appearance or cancellation coverage. This provides insurance protection in cases where the headliner cannot appear for reasons such as illness or an accident. Many events have been cancelled due to the need for social distancing, so the non-appearance and cancellation clauses may be triggered.[[x]] Policies issued after January 23, 2020, may have a COVID-19 exclusion but policies obtained before that probably do not. Coverage can help the organizers recoup some expenses and losses. Pandemic Endorsement This is not a typical endorsement that a small or middle sized business is likely to have. This policy has been successfully triggered by Wimbledon and NCAA.[[xi]] Policy With Specialized Wording If your business is insured by a policy with specialized wording then there may be coverage where typically there may not be. Consideration of the wording is needed. Does Your Business Have Insurance Coverage Once the policies are identified and the particular endorsements and exclusions are identified, one needs to give consideration to the specific wording. At this point, it is unclear how insurers will consider coronavirus claims and whether they will be considered a “force majeure” or whether they will be excluded. There are currently no pending cases or judicial decisions on the issue, but that will undoubtedly change in the coming months. If you submit a claim and are denied, a legal opinion should be considered to determine whether you may have a viable claim or whether to take no as an answer. [i] Gord McGuire & Tim Zimmerman, “Are Coronavirus Losses Covered Under Business Interruption Insurance Policies?”, The Star (March 27, 2020), online: <https://www.thestar.com/opinion/2020/03/27/are-coronavirus-losses-covered-under-business-interruption-insurance-policies.html>. [ii] HUB Insights, “Act of God Insurance Claims Currently Remain Under Question as Businesses Look for Ways to Recoup Losses in the Wake of COVID-19”, HUB International (April 15, 2020), online: <https://www.hubinternational.com/blog/2020/04/act-of-god-insurance/>. [iii] Chetan Sehgal, Jay Ahluwalia, Matthew Law & Crawford Smith, “Insurance Coverage and COVID-19: Legal Considerations and Loss Quantification Developments”, BDO Canada (April 3, 2020), online: <https://www.bdo.ca/en-ca/insights/advisory/commercial-insurance-loss-accounting/insurance-coverage-considerations-on-covid-19/>. [iv] Gord McGuire & Tim Zimmerman, supra note 1. [v] HUB Insights, supra note 2. [vi] Tim Zimmerman & Gord McGuire, “The Calm Before the Storm: Business Interruption Insurance Litigation”, The Lawyer’s Daily (April 9, 2020), online: <https://www.thelawyersdaily.ca/articles/18561/the-calm-before-the-storm-business-interruption-insurance-litigation>. [vii] Ibid. [viii] Chetan Sehgal, Jay Ahluwalia, Matthew Law & Crawford Smith, supra note 4. [ix] David Dybdahl, “Environmental Insurance Coverage for COVID-19 and Other Biological Hazards”, IRMI (April 2020), online: <https://www.irmi.com/articles/expert-commentary/environmental-insurance-coverage-for-covid-19-losses>. [x] HUB Insights, “Coronavirus Resulting in Event Cancellation? Your Non-Appearance/Cancellation Policy May Help Counter Costs”, HUB International (April 10, 2020), online <https://www.hubinternational.com/en-CA/blog/2018/09/event-cancellation-insurance/>. [xi] HUB Insights, supra note 2. “Our articles are intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, COVID-19, Insurance DefenceMay 12, 2020July 5, 2023
“Our articles are intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.”
COVID-19 – Family Law Property Scam Even during this pandemic, there are some separated or separating spouses who are trying to take advantage of the situation, and the operation of Part 1 of Ontario’s Family Law Act, to try to get ALL of their ex’s wealth. It is important for married spouses to understand how that can happen, so they can plan accordingly. Up until COVID19 hit, when it came to property matters, separated spouses were more concerned about what happens when assets increase significantly after separation and when those separated spouses share in that increase and when they don’t. Unfortunately, due to the COVID19, the economy is facing the opposite situation, with people’s RRSPs and other investment savings plummeting in value. Even with the Courts almost completely closed, many spouses are making legal claims to try to get ALL of what their ex has left. There may be some situations where that is the proper result, but in most it is not. This type of action is not unique to COVID19. It is also a concern whenever the economy takes a downturn. It was also a problem in 2008 and 2009. To understand how his scam works, it is necessary to understand how property division works after a marriage occurs. There is no property division for common law couples under Ontario’s Family Law Act. To briefly summarize and simplify how property division works (follow the links for a complete explanation), with some exceptions, married couples share the increase in their net worths from their date of marriage to the day they separate. That makes those two dates very important. With the possible exception of matrimonial homes, married spouses start counting how much net worth they have, and really how much what they have has increased in value from the date of marriage. For the purposes of property division under Ontario’s Family Law Act, they stop considering their increase in net worth on the date they separate. But, in these trouble times, that same law means that they stop counting any decrease in network on the date of separation too. The value of what a spouse owns before the date of marriage and after the date of separation don’t matter. All that matters is what the married spouses had on those two dates. That fact is what makes this scam work. Ontario Family Law recognizes that spouses do not have to physically separate, meaning one spouse walking out of the home, for the spouse to be separated. The law recognizes that spouses can live “separate and apart under the same roof.” The law says that when the spouses move apart is not necessarily the important date for property division, but rather the important date is when they stop living together as husband and wife, even if they continue to reside under the same roof. That gives at least one spouse a big incentive to say the marriage was over, and the parties stopped living as husband and wife BEFORE the COVID19 crisis hit. It gives an incentive to say the marriage ended before the value of their spouse’s assets plummeted – and to say that they were just sharing the same space as co-tenants, not as spouses anymore. To illustrate the advantage this gives, consider a situation where one spouse had $500,000 in investments, but no other significant assets on January 1, 2020 and the other spouse had very little. By the end of March, those investments have fallen to $250,000 in value and the stress of being isolated together in the home means that one spouse walks out. But, that spouse with no assets does not want to share in $250,000. That spouse wants to share in $500,000. So, that spouse says they separated – stopped living like spouses – on January 1 when the investments were worth $500,000. Under Ontario Ontario’s property equalization scheme, that means that spouse would be owed an equalization payment of half the assets on January 1 – $250,000 – or ALL of what his or her ex has left. That is an extreme case. Most won’t have results that bad. But, it illustrates the point. Of course, the opposite it also true. If the spouses had a big fight on New Years, never got along afterward, and stopped living like spouses then, the spouse with the investments has a BIG INCENTIVE to try to reconcile the relationship, even briefly, while the investment value has cratered. Because, if the spouses rekindle their relationship, even for a couple of days or nights, the date of separation becomes that last date, and they share in the LOW value for the assets. That could be a big help, particularly if everyone’s investments rebound after the crisis. The law is not so unreasonable as to allow one spouse to pick the date of separation that benefits him or her the most. If the parties cannot agree, it is a judge or family arbitrator that decides. With so much money potentially at stake, there is clear incentive for one spouse to lie or stretch the truth. Consequently, judges try to look at the facts objectively and ask themselves: “When would an objective person, who knew the couple, say the relationship was over?” In determining that, it is not just when the couple stopped having sex, or even when one spouse started having an affair (some relationships recover from that). The judge (or arbitrator) looks at factors such as: when the spouses stopped eating together, when they stopped going out or vacationing together, when they stopped showing signs of affection for each other, when they stopped referring to each other as spouses, when they took the wedding rings off, when they separated their finances (opened separate accounts or stopped paying each other’s bills), many other possible factors depending on the family’s situation. Determining when spouses separated in these difficult circumstances can be open to argument. Also, the separation date can be very dependent on the specific facts of the individual case. Since there can be a lot of money at stake, it is important for spouses in the midst of a separation to get in touch with a lawyer who can provide advice based on the specifics of the individual situation. The specific circumstances can make a big difference on what a separating spouse should do to protect himself or herself. It can be important even for someone to speak to a lawyer before he or she walks out to determine when might be the best time to do that, or even if that matters anymore. In these situations, the lawyer’s advice can save a spouse thousands, even hundreds of thousands, of dollars – especially when it helps avoid a scam. For more information about family law related questions and advice, please contact John Schuman at john.schuman@devrylaw.ca or 416-446-5080. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, COVID-19, Family LawMay 5, 2020September 30, 2020
Property Division During COVID-19 In my previous post, I touched on the issue of changing support obligations in light of the pandemic. More and more, separating spouses are wondering how property issues will be dealt with in light of the pandemic, particularly as assets are dropping in value after separation. In Ontario, we follow an “equalization” regime under the Family Law Act. Broadly put, this means that spouses share in the increase of their net worth for the duration of their marriage. Generally, the spouse who had the greater increase of net worth during the marriage would pay the other spouse one half of the difference. For example, if Husband’s net worth grew by $100,000 during the marriage, while Wife’s net worth grew by $50,000, then Husband would owe Wife and equalization payment of $25,000 (which is half the difference between $100,000 and $50,000). Equalization is explained more fully here. For now, it is important to understand that two dates become very important: the date of marriage, and the date of separation. Both spouses’ net worth as of these dates become crystallized, which determines the figures used to calculate the equalization payment owing. Generally, fluctuations in the value of assets following separation are not considered, which could lead to unfair results. Some examples: Husband is an employee at a publicly-traded company but receives company shares as part of his compensation package. At the date of separation (pre-pandemic), he solely-owned shares worth $1,000,000. Following the pandemic, the value of the shares dropped by 10%, which may continue to plummet. This provides for a $100,000 reduction of the husband’s net worth post-separation. However, following a true “equalization” would provide that any decrease in value post-separation is not shared between the parties. As such, Husband would be accountable for the entirety of his equalization payment, while still absorbing the decrease of his net worth post-separation. Wife solely owns a retail store in downtown Toronto. At the date of separation (pre-pandemic), it was worth $500,000. In light of the pandemic, she is unable to pay her overhead costs and must close her doors. As a result, she is stuck with a business that she will struggle to sell. Again, a true equalization regime would have no regard for any post-separation fluctuations in value, leaving Wife accountable for an equalization payment that would otherwise be owed to her Husband. In either scenario above, the spouse owning the assets could look to section 5(6) of Ontario’s Family Law Act to request an “unequal division of net family properties” to avoid absorbing the entirety of the loss. Even then, the test under section 5(6) is stringent. The moving party would need to demonstrate that following a true equalization regime would “shock the conscience of the court”. For more information about property division or any other family law related issue, please contact the author of this blog post, Mason Morningstar at mason.morningstar@devrylaw.caor 416-446-3336. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, COVID-19, Family LawMay 5, 2020September 30, 2020
Changing Child Support or Spousal Support Payments During COVID-19 Child and spousal support obligations take effect either pursuant to a court order or a separation agreement (to be sure, many people make informal arrangements amongst themselves, though this is rarely advisable). Separation agreements typically contain review clauses which outline the process for changing a payor’s child or spousal support obligations, along with what kind of change in circumstances will trigger the review. Parties who have signed a separation agreement addressing support should begin there when seeking to vary a support obligation. In Ontario, support orders are made either pursuant to the Divorce Act or the Family Law Act, depending on the court in which the proceedings took place. Sections 17(4) and 17(4.1) the Divorce Act and sections 37(2) and 37(2.1) of the Family Law Act outline the tests for varying child support and spousal support slightly differently. In practice, however, we are generally concerned with whether a “material change in circumstances” has taken place since the order was made. A “material change” is interpreted as a change, which if known at the time of the order, would have resulted in a different order being made. The loss of employment (or even a reduction of income) beyond the payor’s control would generally justify a variation of child and/or spousal support in ordinary times. To date, there is no reason to believe that the loss of employment or income resulting from the pandemic would be any different. That said, support payors should be careful in navigating a reduction of support. At all times, they should make good faith efforts to be transparent and continue paying what is affordable to them. For example, if a support payor underwent a 40% loss of income as a result of COVID-19, a good faith effort would be to negotiate a roughly 40% reduction to their current support obligations. Practically speaking, however, this may not necessarily be feasible. The support payor’s remaining monthly expenses (such as rent/mortgage, utilities, car insurance, debt payments, etc.) have not automatically dropped by 40% as well. It will be important for the support payor to alleviate their losses as much as possible, for example, by applying for emergency relief from the government where appropriate, deferring debt payments and insurance premiums where possible and looking for other employment in the meantime. When the courts resume regular function, many of these support payors will need to begin court proceedings to formally vary their support obligations or any arrears that accrue over the ensuing months. A payor’s good (or bad) faith efforts to continue paying support will likely be a factor considered by the court when addressing the issue. For more information about child support or any other family law related issue, please contact the author of this blog post, Mason Morningstar at mason.morningstar@devrylaw.caor 416-446-3336. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, COVID-19, Family LawMay 4, 2020September 30, 2020
Temporary Foreign Workers can enter Canada amidst COVID-19 Travel Restrictions This blog is co-written by our former articling student, Janet Son. The Federal Government announced changes to the travel restrictions as they apply to Temporary Foreign Workers (“TFW”) with some major caveats. TFW’s who are coming to Canada for an “essential purpose” are exempt from travel restrictions if they do not present symptoms. Essential services include: Necessary medical deliveries of cells, blood, tissues, organs and other similar life-saving human body parts Trade and transportation sectors that deliver goods and people such as truck drivers, crew on planes, trains and vessels Workers in the healthcare or critical infrastructure sector that regularly cross the border to work Those that have to cross the border to provide or receive essential services including emergency responders However, all other TFW’s on a work visa not considered “essential” will be subject to certain restrictions. If flying by air, TFW’s will be required to pass a health check by the airlines before they are allowed to board the plane. Anyone with symptoms of COVID-19 will not be allowed to board the flight. According to Section 58 of the Quarantine Act, Emergency Order PC number 2020-0175, TFW’s that do not fall under the exemptions are required to self-isolate for 14 days upon their arrival to Canada whether or not they have symptoms. If they have symptoms upon arrival, depending on the severity of their condition, they may be placed in quarantine at the port of entry or sent to the hospital. Once recovered they will be assessed by the hospital and deemed safe to continue to their final destination within Canada. TWF’s can face hefty penalties for failing to report symptoms or to self-isolate for the mandatory 14 days, including fines of up to $750,000. Employers cannot allow their TFW’s to begin work until the 14-day self-isolation period is complete, even if it is at the request of the worker. This 14-day period must also be paid time. The Federal Government announced $50 million dollars to assist farmers and fish processers to offset the cost of 14 days of pay during the mandatory self-isolation period. These industries heavily rely on TFW’s for seasonal work. Employers are eligible for $1500 per TFW to help cover the cost. Furthermore, if a TFW becomes ill while in Canada, they should receive health coverage equivalent to residents of Canada. And for workers in the low-wage and primary agriculture streams including the Seasonal Agricultural Worker Program, their employer is responsible for ensuring health coverage until they are eligible for the provincial plan. The employer must also immediately notify their local public health authority and ensure proper conditions for self-isolation for the TFW. Finally, TFW’s may be eligible for Employment Insurance or the Canada Emergency Response Benefit as long as they meet the eligibility requirements. TFW’s may also be eligible for paid or unpaid sick leave based on their specific employment contract and applicable employment legislation. These policies aim to strike the balance between the urgent need of Canada’s agriculture and fishing industry for TFW’s while attempting to ensure the safety of the TFW’s and the general public. If you have more questions about the Temporary Foreign Worker programs related to COVID-19, contact immigration lawyer Maya Krishnaratne at maya.krishnaratne@devrylaw.ca or 416-446-5841 or employment lawyer Marty Rabinovitch at marty.rabinovitch@devrylaw.ca or 416-446-5826. By Fauzan SiddiquiBlog, COVID-19, ImmigrationApril 28, 2020September 30, 2020
Making Canadian Courts Great Again Trump’s upcoming inauguration for our neighbour down south is looming as many of us are still coming to terms with the election results. To say that the election was a controversial and polarizing one is a gross understatement. Canada tuned in, as social media, newspapers, radio stations and everything in between exploded with every tweet, every colourful comment made at the debates, and pieces dug up from the candidates’ past. Everyone woke up on November 9, 2016, to the news of Trump’s stunning victory. However, for some Canadians that morning, Trump hit much closer to home. On the morning of November 9, 2016, Judge Bernd Zabel walked into the courtroom wearing a “Make America Great Again” cap before placing it on the bench in front of him. In the same courtroom on that day, he voiced his support for Donald Trump. This sparked outrage as the future president-elect has appeared to condone sexual assault on women and threaten various ethnic and sexual minorities, among others. However, more disturbing and problematic is the fact that judges, otherwise seen as the beacons of justice in Canada, are required to be impartial and neutral. One of the underlying values of the Canadian justice system, judicial independence, requires judges to make decisions pursuant to the rule of law absent any political interference. The Canadian Judicial Council provides that “Judges should strive to conduct themselves in a way that will sustain and contribute to public respect and confidence in their integrity, impartiality and good judgment.” The legal community reacted instantly with many calling for Justice Zabel to be disciplined. Justice Zabel quickly apologized the next week – “I wish to apologize for my misguided attempt to mark a moment in history by humour in the courtroom following the surprising result in the United States election”. However, just as an apology cannot absolve someone of wrongdoing or undo a contract, it cannot take back words that were said. The action was taken quickly, as Justice Zabel has now been suspended, and can no longer hear cases in court as of December 21, 2016. While Justice Zabel’s future remains uncertain, we know that Canadian courts strive to be better than great. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Human Rights LawJanuary 18, 2017June 16, 2020
Are Uber Drivers Properly Insured? Since its inception over 6 years ago, ride-sharing service Uber has continued to make headlines as one of the most controversial technology companies in the mobile era. This “uber-convenient” service, which uses an online app to connect passengers with drivers using their personal vehicles, has faced legal challenges from consumer groups, municipalities, and provincial legislators. In the face of these obstacles, Uber has continued its expansion to more than 300 cities and is now valued in excess of $40-billion (US). The Uber app allows customers to order rides on their smartphones, have them automatically billed to their credit cards, and monitor who is picking them up. One of the controversial issues that Uber faces is properly ensuring its drivers. In Ontario, the standard automobile policy excludes coverage when the automobile is used to carry paying passengers or used as a taxi. Earlier this year, the Financial Services Commission of Ontario (FSCO), which regulates provincially-incorporated property and casualty insurance companies, warned drivers and users of the ride-sharing services that they may not be protected against certain damages, losses, and liabilities that may arise out of use of the service. While Uber drivers should be opting for a more expensive commercial license, most do not, and instead, continue operating under their existing personal auto insurance policies. Under these policies, if an Uber driver were to get into a serious accident while driving for the ride-sharing company, insurers would likely limit the amount they pay out in claims. In addition, they would then go after the driver for the money for violating the terms of their personal policy. Uber has responded to these insurance concerns by providing contingent insurance to cover drivers in case they encounter problems, however, the company has been tight-lipped on the exact terms of the policy that operates in Canadian cities. Uber ensures this policy covers everyone during a fare, but there is uncertainty about coverage before and after and even during the ride. Without the details of the policy, it is impossible to know whether it provides adequate insurance for drivers and users. In the face of these insurance complications, The City of Toronto has taken steps to interfere with Uber’s operations. Last November, the City filed an injunction to shut down Uber’s ride-sharing application. According to a recent article in the Globe and Mail, The City of Toronto is claiming that Uber’s service violates municipal taxi licensing regulations—failing to meet the $2-million coverage that is required to operate under city bylaws. However, Uber’s website maintains that it provides $5-million in insurance coverage for users. In March, a judge ruled that if the company chooses to provide a copy of its insurance policy as evidence, the document must be made public. Uber has argued that the document is a “trade secret” and that making it public “would cause serious harm to its commercial interests and competitive position.” But Justice James Diamond of the Superior Court disagreed with this, stating in his ruling, “I am not satisfied that Uber has presented sufficient evidence to show that disclosure of the insurance policy would lead to a loss of any competitive advantage.” This week, the Superior Court of Ontario put the issue surrounding Uber’s operations to rest, for the time being, dismissing the city’s application for an injunction. In his decision, Justice Sean Dunphy concluded that there is “no evidence” Uber is operating as a taxi broker, and therefore not subject to city bylaws regulating taxis. As a result, Uber will continue its operations in Toronto. For more information regarding this blog post or any other insurance-related topic, please contact our insurance defence group at https://devrylaw.ca/insurance-defence/ or our personal injury group at https://devrylaw.ca/personal-injury-law-firm/ “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Insurance DefenceJuly 16, 2015June 16, 2020
Canada Revenue Agency (CRA) Offers Advice for Settling Tax Dispute Claims, Part 1 On June 19, 2014, the Canadian Tax Foundation (“CTF”) held an event titled “Tax Dispute Resolution: an Inside Look from the Government’s Perspective.” Devry Smith Frank LLP (“DSF”)’s tax litigation team attended the event to better assist its corporate and personal clients to resolve their disputes with the Canada Revenue Agency (“CRA”). Part one of this three-part article series begins with Ms. Anne-Marie Lésvesque, Assistant Commissioner of Appeals for the CRA: CRA has a two-year backlog of ongoing donation tax credit disputes Ms. Lésvesque, speaking for the CRA, explained that the timely resolution of disputes is made more difficult by an imbalance between resources dedicated to the CRA’s appeals unit and the number of ongoing disputes. As an example, Ms. Lésvesque explained that the CRA is currently dealing with a glut of 175,000 donation tax credit disputes. In a regular year, the number is closer to 50,000 to 60,000. Ms. Lésvesque estimated that it would take one to two years to eliminate this backlog. In the meantime, tax litigation lawyers like those at DSF can work with you to protect your rights while moving your tax dispute closer to resolution with the CRA. Avoid commonly used arguments that are commonly unsuccessful Speaking from the CRA’s perspective, Ms. Lésvesque also suggested that repetitive appeals such as the “natural persons argument” have increased in popularity but are not succeeding at the appeal level or in tax court. Toronto tax lawyers like DSF’s own save their clients time and money by refusing to put forward “fad” arguments that are unlikely to be successful. Cases of legal interpretation are more likely to go to trial Ms. Lésvesque also shared that while the CRA appeals process must be viewed as impartial, it is legally bound to follow the CRA’s published interpretation of the Income Tax Act(the “Act”). Settlement in cases where the CRA’s and taxpayer’s interpretation of the Act are different are more likely to go to trial. In contrast, the CRA is far less likely to go to trial where the facts are in dispute. Ms. Lésvesque explained that where there are issues of credibility, the taxpayer should have the benefit of the doubt, at least in his or her first dispute with the CRA. Tax lawyers at DSF can help taxpayers put forward their best case when explaining why the CRA has made errors in its tax reassessments or enforcement measures. Ms. Lésvesque suggested that the CRA’s success rate at trial is currently 80%. Having a great lawyer on your side can increase the odds both for early settlement and success at trial in your tax law case. Stay tuned to the Devry Smith Frank LLP tax litigation blog for part two of this series that discusses what the Department of Justice’s former Senior Counsel had to say about settling tax dispute claims at this event. As always, for any tax law related matters in Toronto, Ontario Canada, contact Devry Smith Frank LLP at 1-416-446-1400. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, TaxJuly 31, 2014June 10, 2020