On December 31, 2008, the Law Society of Upper Canada (the body
which regulates lawyers practicing in Ontario) enacted new rules
aimed at preventing inadvertent money laundering and terrorist
financing through lawyers' trust accounts. These rules are
based on a model developed by the Federation of Law Societies of
Canada. Similar rules have been enacted, or will soon be enacted,
in all other provinces and territories of Canada.
The rules require all lawyers and paralegals licensed in Ontario
to identify their clients (including existing clients) when they
are retained to work on a new matter, and in certain circumstances,
to verify their clients' identities.
The new rules require that we obtain certain identifying
information from clients for each new matter that we open on or
after December 31, 2008. For individuals, we must obtain the
individual's full name, home address and telephone number,
occupation and, if applicable, business address and telephone
number. For organizations, we must obtain the organization's
full name, business address and telephone number, incorporation or
business identification number and place of issue and, in some
instances, a description of its business activities. We must also
obtain contact information for the individuals authorized to
instruct us on behalf of the organization. If you are acting as an
agent for a third party, we will also need to collect this
information for the third party.
For existing clients, some (or all) of this information already
is in our possession.
In addition, if we are involved in receiving, paying or
transferring funds (including negotiable instruments and
securities) on your behalf, subject to a number of exceptions, we
will be required to verify your identity. Verification involves
reviewing documents such as drivers' licences or birth
certificates for individuals and certificates of corporate status,
annual government filings or constating documents for
organizations. We may also be required to obtain names, addresses
and occupations of the organization's directors and of any
shareholder or owner of 25% or more of the organization.
The rules also require that we maintain copies of the
information we obtain. We are permitted to rely on this information
in order to comply with our obligations under the rules for
Any personal information that we collect in order to verify the
identity of an individual will be kept in a secure database, and
access will be restricted to your McMillan lawyer, his or her
assistant and any other individuals who need this information in
order to comply with the rules regarding client identification and
verification. We will not disclose this information to others
unless we are required to do so by law.
The foregoing provides only an overview. Readers are
cautioned against making any decisions based on this material
alone. Rather, a qualified lawyer should be consulted.
A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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