opinionThe authorities is dragging legal regulation into the Competitors Act – it shouldn’tJoshua Krane and Mark OpashinovFebruary 13, 2023
Joshua Krane and Mark Opashinov are companions on the regulation agency of McMillan LLP.
Whereas working to convey Canadian competitors regulation into the twenty first century, Minister of Innovation, Science and Business François-Philippe Champagne prolonged this month the consultations on doubtlessly important modifications to Canada’s Competitors Act.
The proposed modifications construct upon smaller tweaks to the act that the minister has made in current months. The federal government tinkered across the edges final June, when it made wage-fixing and no-poach agreements punishable by jail time and fines on the discretion of the courtroom. Now, by means of these consultations which can inform long-promised legislative updates to the act, Mr. Champagne is contemplating extra modifications that might criminalize much more market exercise.
However in the case of the complexities of imposing competitors regulation, legal regulation isn’t essentially the perfect instrument to attain the specified coverage outcomes. So, we’d warning the federal government to not make the identical mistake twice on this subsequent spherical of amendments to the Competitors Act.
The problem with utilizing a legal hammer to manage competitors is that the Competitors Bureau, which has the subject material experience, isn’t the company that may convey ahead a prosecution. As a substitute, Crown prosecutors are required, which provides a second layer of administration and enforcement when bringing a case.
Not like civil circumstances, the place the burden of proof is decrease, the legal regulation imposes very excessive requirements on the Crown to show wrongdoing. The protections within the Canadian Constitution of Rights and Freedoms require persevering with disclosure by the Crown to defendants, which could be expensive and time consuming for prosecutors. Prosecutors are additionally beneath a time stress to prosecute circumstances when expenses are laid, that means that prosecutors may not convey expenses till the case is prepared for prosecution, which might take a few years. That type of lag time is dangerous for either side.
One other concern is that, lately, legal regulation has been basically enforced by enterprising legal professionals, not by means of non-public prosecutions, however by means of class-action litigation alleging that corporations that violated the legal regulation are liable for his or her deeds and should pay damages. So, now that the federal government has criminalized wage-fixing agreements, non-public follow legal professionals will, based mostly on current historical past, seemingly take the lead in pursuing employer settlement circumstances, not the Competitors Bureau and Crown prosecutors.
This means that as a substitute of getting to account to an enforcement company for suppressing wages or labour mobility, companies ought to anticipate a wave of litigation – a lot of which shall be nuisance litigation – from class-action legal professionals. This might result in additional issues.
Underneath the federal government’s new guidelines, wage fixing is a “per se” offence, that means the act of settlement is a violation of the regulation on its face. Because of this, it’s sufficient for class-action plaintiffs’ legal professionals merely to allege an settlement exists for the case to maneuver ahead. Employers may simply discover themselves dragged right into a prolonged trial. And given the exceedingly lengthy ready occasions for trials, companies could discover it simpler to easily settle the matter and “pay the issue away” to class-action plaintiffs and their legal professionals, moderately than wait years to defend themselves, at important expense, thereby avoiding the type of accountability the brand new regulation is attempting to create.
Civil processes can assist ship justice rapidly when the best institutional frameworks are in place. The current expertise earlier than the Competitors Tribunal within the Rogers/Shaw matter confirmed Canadians that even a fancy multibillion-dollar merger case could be introduced, tried and adjudicated in about eight months.
It’s vital for presidency, enterprise leaders, legal professionals and shoppers to think about whether or not modifications to Canada’s competitors legal guidelines are wanted to adapt the regulation to the digital age. The present session course of is a welcome growth in consequence. However no matter modifications Parliament does make, we’d warning in opposition to utilizing the legal regulation too readily. Doing so may not yield the specified outcomes from a coverage or from an enforcement perspective.