Paperless world raises issues

,

BY JOHN BECKER, THE TIMES JUNE 27, 2013

Paper is an expense. It costs money to produce, store, file, and destroy.

There are more efficient ways to make documents portable and sharable.

So, it’s no wonder that many companies are abandoning paper altogether and moving to a paperless office, but there are legal issues to consider.

How do you go paperless?

The answer seems simple: buy a scanner.

Whether you use Adobe Acrobat or an enterprise document management system with a central server, you will have a functioning system for scanning and managing electronic documents.

Practically speaking, even this basic setup will allow you to work with electronic documents.

Legally speaking, though, you may still need to keep some paper documents. But, wasn’t getting rid of the paper the goal to begin with?

A key question to ask is whether your paperless office setup satisfies the strict requirements of the provincial and federal governments. If you are governed by a professional organization, you should also check to see if they have any requirements.

The provincial and federal governments each have different requirements for electronic documents.

The rules vary and depend on the type of document and its intended use.

The Canada Revenue Agency (CRA) requires that document scanning systems comply with several national standards.

You must purchase these national standards in order to find out what they are.

One can only imagine what would happen if a company scanned and shredded its financial records, only to have the CRA determine in an audit that they are legally insufficient.

Another key consideration is whether the electronic document will stand up in court.

The courts’ acceptance of electronic documents is evolving. Any paperless-office system should be designed to ensure that all electronic documents will be admissible in court.

If you have an electronic contract that you want to enforce, you will want to ensure that the court will find it to be reliable and admissible as evidence.

On top of this myriad of legal considerations, there are privacy issues.

As soon as a document becomes electronic, it is susceptible to viruses and accidental disclosure.

Proper procedures should be put in place to minimize the risk of (and any liability from) losing a phone or accidentally emailing a document to the wrong person.

Companies that have a paperless office, or are considering implementing one, should carefully consider whether the system is legally sufficient for their specific purposes.

– with assistance from articling student Garrett Munroe

John Becker has run his own law firm in Pitt Meadows for more than 30 years, focusing his practice on corporate commercial real estate and business succession planning. Send questions to: info@beckerlawyers.ca

© Copyright (c) Maple Ridge Times

Newbies avoiding trap

BY JOHN BECKER, THE TIMES APRIL 25, 2013

Previous Becker articles have covered the importance of business succession planning for the mature business owner. Succession planning is only one of the transition steps a business will undergo. Another is in the start-up phase.

The new entrepreneur, not necessarily a young entrepreneur, is motivated either by income or by identifying and seizing an opportunity in the marketplace. The new entrepreneur is often swept away with enthusiasm and may overlook important foundational pieces for long-term success.

Here are some basic ‘tips and traps’ for the new entrepreneur.

“Do’s”

1. Write a business plan. There are many resources available including paying a consultant to assist you. Whatever you spend, it will be money well spent.

2. Establish relationships with lawyers, accountants, financial planners, insurance professionals and a banker. Most advisors offer initial consultations at little or no cost. While you may not need professional advice at the outset, establish these contacts early for future reference.

3. There are significant legal and accounting differences between a sole proprietorship, partnership or limited company. You will need proper professional advice to make the right decision.

4. Set up a separate bank account and records keeping system for your business, even if you are operating as a sole proprietorship. You may have to register for PST and GST and have other compliance requirements.

5. Put business relationships in writing, including those with your employees and independent contractors.

6. Manage your accounts receivable. Allowing money to go out, with no money coming in will cripple your business. If you grant credit, get personal guarantees from your incorporated customers.

“Don’ts”

1. Do not run your business activities out of your personal financial accounts.

2. Do not assume that your existing personal or homeowner insurance will cover your business operations.

3. Do not assume that anyone you deal with has the same understanding as you do about the relationship. Get it in writing.

4. Do not forget to identify and comply with all government regulations affecting your business.

5. Do not avoid getting proper professional advice when you find yourself out of your comfort zone.

6. Do not ignore your family. They are your biggest source of support and should remain your first priority.

While there is never any guarantee of success, with proper planning your chances of success will increase dramatically.

John Becker is a certified Family Enterprise Advisor and the senior lawyer at Becker & Company, located in Pitt Meadows. John has been a lawyer for more than 30 years, and now focuses his practice on family business succession planning, corporate and commercial law, and real estate. Send questions to: info@beckerlawyers.ca

© Copyright (c) Maple Ridge Times

Family dynamics present twists

BY JOHN BECKER, THE TIMES MARCH 28, 2013

Last month’s column was on the massive wave of family business transitions expected to take place, and now, we’ll delve into the unique challenges of family business succession planning.

A family business succession plan has all the challenges of a business transfer to a third party, but includes the dynamics of family relationships.

Some advisors try to use the same templates for family business transitions as they would for a standard non-family transaction.

This approach is not effective and is partly why only 30 per cent of family businesses successfully transition to the next generation and less than 12 per cent make it to the third generation.

The key is in understanding and respecting the primary driver: the family dynamic.

Family members all fall into one or more of three circles of influence – the family circle, the ownership circle, or the business circle. The values and relationships in the family circle are the most critical.

The founders’ assumptions about whether or not children want in or out of the business are often wrong.

And where there is a common intent that the children will succeed in the business, a host of new issues arise such as training and education.

One must also consider how to provide for children who are not going to have a piece of the family business and for those who remain as part owners of the business, but inactive.

Establishing a dialogue and value system early is key and can be done years before transition planning.

Where the business is valuable, the founders can start planning for alternative benefits to be provided to children who are not going to succeed in the business.

Part of long-term planning should allow for a potential change in circumstances and intentions and provide for occasional check-ins to ensure the plan is still relevant for all of the stakeholders. Honest discussion must take place respectfully.

Sometimes the founder needs assurance that their values and relevance to the business operations are intact and part of the succession plan. By creating an advisory position for the founder ensures the institutional memory and mentorship are both accessible.

Family business succession planning often involves trained facilitators and, occasionally, family counsellors.

Do seek out advisors with the requisite expertise as success requires unique skills and perspectives. A great start is UBC’s Sauder School of Business “Road Map” (www.UBCroadmap.com) program which helps family businesses embark on a long-term vision for the business and the family.

John Becker has run his own law firm in Pitt Meadows for more than 30 years, focusing his practice on corporate commercial real estate and business succession planning. Send questions to: info@beckerlawyers.ca

© Copyright (c) Maple Ridge Times

Boomers drive huge transitions

BY JOHN BECKER, THE TIMES FEBRUARY 28, 2013

CIBC recently estimated that $1.5 trillion in business assets will be transferred from the current business owners during the next five years.

These businesses employ almost two million people and account for at least 50 per cent of Canadian GDP (gross domestic product).

This column is the first of a two-part series on business transition planning, specifically for family businesses.

The aging demographic of the baby boomer business owners has created a huge demand for professional transition planners.

Transition is unavoidable but, unfortunately, proper transition planning is merely optional.

A transition can be forced on a business owner through illness, death, divorce, or a collapse of an industry sector.

More commonly, it is the simple fact of age and inclination that drives the desire to transition out of one’s business. The mature business owner could be seeking more down time, an opportunity to enjoy spending some of the decades of retained earnings, to sell the business in a seller’s market or to transition the business to the next generation.

One of the first steps in transition planning is to have the business assessed.

This involves evaluating the business for its viability as an ongoing enterprise and valuating the assets or the shares of the owning corporation.

Simply put, you want to show your business has long-term potential as a viable business and indicate its value with a sale price.

If the plan is to sell, then the business owner must speak to their lawyer, accountant, and other professional advisors.

Many businesses have been constructed around the personal needs of the individual business owners.

In most cases these personal arrangements need to be modified to maximize the value of the business. For example shareholders’ loans need to be paid back, personal assets carried on the company (i.e. boats and other toys) need to be removed, and key employees – who would remain with the business after the sale – need to be secured through long-term employment contracts and appropriate incentives.

On the personal side, it is very important that the business owners have their planning documents current and consistent.

These include wills, power of attorney, and health-care directives. The incapacity of a business decision-maker can create enormous problems for the day-to-day operations if proper substitute authority documentation is not in place.

If the desire is to sell, then commonly a business broker is retained to properly manage and market the business. In many cases the business owner will have connections within the industry and a merger or friendly takeover can be arranged directly between the two business owners.

In this case, the brokerage commission is avoided.

If the decision is to transfer the business to the next generation of family, a very different process is required.

Family business succession is a minefield for the untrained advisor.

More than 90 per cent of businesses in North America are family-owned or controlled.

Unfortunately, family business succession has a striking failure rate.

Only approximately 30 per cent of family businesses survive into the second generation and only 12 per cent endure into the third generation.

As a certified family enterprise advisor, I’ll share successful transition tips and tricks in part two of this series that will significantly improve your probability for success.

– John Becker is the senior lawyer at Becker & Company in Pitt Meadows. John has been a lawyer for more than 30 years, and now focuses his practice on corporate and commercial law, real estate and business succession planning. Send questions to: info@beckerlawyers.ca.

© Copyright (c) Maple Ridge Times

Winter increases potential suits

BY BECKER LAWYERS, THE TIMES JANUARY 24, 2013

Whether you are driving on the new Port Mann Bridge, walking on an icy sidewalk while doing some local errands, or simply participating in a recreational activity, you should always understand your legal rights if you become injured.

You should also validate assumptions about any possible claims.

It’s the icy season of slips and falls, and we’ve seen many clients who have suffered significant injuries from what you might consider a simple fall from either ice or a crack in the sidewalk.

I recall one such elderly client who tripped on a crack in the sidewalk and fell face first into the concrete. She eventually recovered, but she suffered some truly awful facial injuries.

When you consider that, as residents, each of us must keep the walkways and sidewalks of our residential property ice-free and safe, it won’t surprise you to know that municipalities have the same obligations.

Municipalities must maintain safe sidewalks and keep them ice-free or repair hazardous cracks or other safety-related issues. While they are obligated to keep them safe, if you slip on municipal property you have only two months from the date of the injury to notify the municipality in writing of your potential claim.

This notification must be delivered directly to the municipality and include all pertinent information, including your legal name and address, and the time, place and manner in which the injury was sustained. Failing to provide the municipality with this type of notification may jeopardize your claim for injury compensation.

Now, if a municipality has complied with a reasonable standard of care and is maintaining the sidewalk regularly and a sudden freak storm occurs, creating treacherous icy conditions, they may not be held responsible should you fall and sustain an injury. This is because they may have met a reasonable standard of care, especially if they could not have anticipated the freak storm. Similar considerations apply to the maintenance of your own residential property to ensure the safety of your visitors.

As for the Port Mann Bridge, liability for falling ice and a slippery bridge deck is still to be debated by lawyers and decided by the courts, but individuals won’t know for sure whether they have a reasonable claim until the issues of standards of care and liability are properly assessed.

But the test will always be the same: was a reasonable standard of care met?

For those who sustain injuries during recreational activities, such as skiing, you may have a claim against the operator of the ski hill, even if you signed a waiver of liability. A waiver does not necessarily absolve a party from their responsibilities.

Insurance companies deter a lot of claims with the use of waivers, but what’s not well known is that many claims are worth pursuing and can result in settlements in favour of the injured.

As with any injury, it’s best to check with a lawyer to review your details and get advice on the best course of action for your individual matter.

© Copyright (c) Maple Ridge Times

Family law New collaborative approach makes for healthier families

THE TIMES NOVEMBER 22, 2012

In one of my recent articles [Trends continuing to grow in family dispute resolution, Oct. 25, TIMES], we looked at the various Alternative Dispute Resolution (ADR) options for family law matters.

With the new Family Law Act (FLA) coming into effect in early 2013 and placing a new emphasis on out of court settlements, family law lawyers are now required to shift into a different gear for handling these matters.

In this final article in a three-part series, let’s explore the benefits of the collaborative law approach.

This model depends on good-faith negotiations, the sharing of confidential information, and a commitment by lawyers and law firms to withdraw should negotiations fail.

It is a very effective means to dealing with family disputes.

Both parties should select lawyers who practise collaborative law, or insist that both lawyers agree to make every effort to reach a fair-negotiated settlement.

Working together, these lawyers will assess the parties’ legal and emotional needs and work cooperatively to find a fair settlement for their clients.

The process is multi-disciplinary, thereby allowing for the inclusion of other professionals such as child/educational psychologists, family counsellors, divorce counsellors, life coaches, and other relevant advisers.

This team guides the parties, and any children involved, through the separation and divorce process.

The goal is to promote and support healthy, productive, well-functioning post-divorce families through immediate life changes and provide a workable platform for the future.

Success requires a commitment by all parties, clients and lawyers, to reach a fair resolution outside of the court system.

If a resolution cannot be achieved, then both parties must seek alternative counsel to represent them.

Instead of exchanging adversarial court pleadings, lawyers will correspond with each other in a collegial and cooperative manner, which often includes a four-way, round-table meeting.

Each party can discuss issues privately with their lawyers in another room before returning to the table to resume negotiations.

Another important aspect of the new act has far reaching implications for property division and debt allocations for all couples.

It brings common-law relationships squarely in line with those of married couples. In British Columbia, same-sex marriages are treated in the same way as heterosexual marriages.

It will now be presumed that property owned by the parties is “family property” to be shared equally. Similarly, any debt that has been incurred for a family purpose will be shared equally.

Accordingly, those already in, or intending to enter into common-law relationships, are strongly advised to record their current and future intentions in a co-habitation agreement.

Similarly, parties may enter into marriage agreements prior to their weddings.

These agreements can address future intentions for pensions, RRSPs, spousal support, and payment of child support for stepchildren in the event of the breakup of the relationship. It may also identify “excluded property.”

The act requires parties entering into such agreements to make a full, frank and honest disclosure and to agree on issues that are in the best interests of any children.

If these criteria are met, the courts will uphold your agreement and will strictly bind the parties and will only set aside agreements if the terms prove to be “significantly unfair.”

Avoid family conflict and consider preparing a carefully drafted agreement, including a clause that allows the parties to use ADR in the event of a dispute.

– This is the final part of a three-part series.

© Copyright (c) Maple Ridge Times

Trends continuing to grow in family dispute resolution

BY THE TIMES OCTOBER 25, 2012

In last month’s column, I mentioned a new trend in family-law circles – alternative dispute resolution – which involves employing alternative means of resolving legal disputes outside of the court process.

Arbitration and mediation are two common methods.

Arbitration has been used predominantly in many types of commercial disputes.

In fact, the Commercial Arbitration Act has been specifically amended to include family-law disputes.

Arbitration is a fast, flexible, and private option to settling family-law disputes, no matter how large or trivial the dispute may be.

The parties must agree on the issue of dispute, the choice of arbitrator, the timing and payment of the arbitrator’s fees.

The arbitrator will have professional experience in family-law matters and may not be a practising lawyer.

Arbitration is voluntary in family-law matters.

However, parties can agree to resolve future disputes by inserting an arbitration clause in their agreement. This is most useful for separation agreements.

Arbitration awards – like court orders – are binding and parties must pay the costs of the arbitrator personally, while the court process costs are minimal.

However, once you factor in the costs of prolonged, acrimonious litigation with lawyer’s fees on both sides, the cost of an arbitrator is a relatively small price to pay.

Alternatively, mediation is a cooperative, managed, process of negotiation.

Mediation can begin at any time and even once litigation has commenced.

The mediation process has four basic steps.

Parties will meet with the chosen mediator, either together or separately. The process, ground rules, and procedures are explained, goals and objectives set.

The mediator will assess the dynamics between the parties and screen for any abuse or control issues between the parties.

Full disclosure and exchange of the parties’ financial information is the next step. It calls for absolute honesty and good faith.

Each party will complete a formal financial statement setting out all assets, liabilities, income, and expenditure together with supporting documents to prove these.

Expert reports may be needed to assess children’s needs, evaluations of business assets, etc.

Once the information is gathered and reviewed by all parties, a mediation agreement is signed and the mediation will begin.

The issues in dispute will be identified and discussed.

If the mediation is successful, the medi-tor will prepare an informal list of agreements and all parties must sign their acknowledgement.

The final stage involves setting the terms of the agreement into more formal language in a legal document, typically a separation agreement.

Once signed and executed by both parties, it becomes legally binding and enforceable. For example, a copy of the separation agreement may be handed to family maintenance enforcement, to secure the payment of your support obligations.

Finally, a tip for successful mediation: Enter the process with an open mind and actively listen to what the other party is saying.

Your goal is to reach a fair settlement for all, for the immediate future and years to come, particularly in the case where young children are involved.

Be honest.

Distrust and dishonesty and bringing up all the misdemeanors of the past will only serve to derail the mediation process, often beyond repair.

Next month’s article, the final part in this three-part family-law series, will cover how common-law and same-sex couples can protect themselves in advance of the new act, which will be coming into force March 2013, with respect to the new rights and obligations regarding property and support under the act.

© Copyright (c) Maple Ridge Times

New options for family disputes

BY THE TIMES SEPTEMBER 27, 2012

The buzz word around the legal community in recent years is Alternative Dispute Resolution (ADR), which is simply an alternative means of resolving a legal dispute rather than using traditional litigation which involves using the court processes and procedures to get results for clients, and which is generally adversarial, lengthy, and costly.

Clients are looking for other, more cost-effective ways to resolve disputes.

The court process follows strict rules and legislation. It’s a “one size fits all” model that really doesn’t fit everyone.

ADR allows you to tailor the solution to fit your needs, issues, and budgets. It’s also a less stressful means of working through a dispute as it empowers the two parties more than litigation allows. ADR is particularly useful in all areas of family law, including property issues, guardianship, custody, access, and support.

The new Family Law Act – which will come into effect in March 2013 – wholly supports use of ADR, and in particular, use of negotiated settlements by means of mediation and collaborative law.

Mediators are specially trained professionals – often, but not always lawyers – with backgrounds in law, accounting, social work, psychology, and other areas.

Your lawyer will recommend a mediator best suited to your needs, and will consider the techniques and approach of the mediator, as well as his or her background and experience. This will largely depend on the issues in dispute.

A mediator will begin by gaining the trust of the parties, identifying issues in dispute, and any common ground.

While remaining absolutely impartial at all times, the mediator must assess the conflict issues and identify any real or perceived unequal bargaining positions which may be impacting on the dispute.

Mediation may also be appropriate for disputes between co-workers, committee members, neighbours, inter-generational issues, estate beneficiaries, and family-held businesses.

Mediated settlements can also preserve important relationships, as the process is less acrimonious than litigation.

Collaborative law is another model for negotiation-based dispute resolution used in family disputes. It’s a holistic approach that involves multiple professionals with expertise in dispute resolution, family breakdown, adult and child psychology, as well as financial matters.

The process starts with a participation agreement that binds all parties, including their lawyers, to making every possible effort to reach a settlement on matrimonial issues without using litigation. If the process fails, the lawyers are obliged to withdraw from acting for the parties.

The process consists of multiple, carefully managed, four-way meetings between lawyers and clients, and concludes with the execution of a separation agreement, if successful. If necessary, parties will engage the services of other third-party professionals to give impartial advice on any deadlock issues.

Choosing ADR, particularly in family law matters, enables the parties to maximize positive dispute outcomes, repair relationships, and adjust to changes.

These are important changes in light of the new Family Law Act coming into force.

This is the first in a three-part series.

The second part will delve into the inner workings of mediation – how it works, and some insight into the mediator’s role and your lawyer’s role.

© Copyright (c) Maple Ridge Times

Hit and run victims must garner details

BY BECKER LAWYERS, THE TIMES JULY 26, 2012

Surprising, but true, ICBC may not provide coverage for many of your losses from a car accident, if you do nothing to identify the other driver.

S There are many situations where people have even been seriously injured in a hit-and-run car accident, but their claim was denied by ICBC because they did not make adequate efforts to get information about the other driver.

Our firm is currently dealing with several of these matters for clients where ICBC is attempting to deny coverage.

A recent court decision in New Westminster Supreme Court during March 2011 resulted in a seriously injured person (not a client of our firm) having her claim denied by ICBC because she didn’t make enough effort to identify the other driver.

Her claim for compensation for her care and loss of earnings just evaporated.

It’s tragic and can be avoided. If you are in an accident, regardless of whether you are injured or not, make reasonable efforts to note and record any details you can about the other driver.

This might include the car make, model, and colour, a full or partial licence plate number, driver and occupant’s descriptions, any other observable characteristics, and even the direction in which the car is travelling following impact.

Record these details as soon as possible. At the accident scene, call the police, but don’t rely on them alone.

You’ll also need to obtain names and phone numbers from potential witnesses and follow up to gather additional detail about the accident and the other driver.

Share witness names and contact information with police and ICBC.

Following the accident, here are other steps to take to protect your claim:

. Immediately provide written notice to ICBC to indicate that the other driver is unidentified.

. Within days of your accident, make and post posters around the location of the accident to try to gather information from more witnesses.

. Place an advertisement seeking potential witnesses in local newspapers within days of the accident.

. Speak to a lawyer about your claim as soon as possible.

If you have done everything required by law, as above, and made all reasonable efforts to identify the other driver, it is unlikely your claim will be denied and ICBC should provide adequate coverage for your claim.

Do continue to add information to your file as it becomes available.

The responsibility will continue to be yours, as ICBC is not actually responsible for tracking down the other driver.

You must make reasonable efforts yourself, and they are relatively easy to do and will protect your ICBC claim.

© Copyright (c) Maple Ridge Times

First-time buyers of new homes could save thousands

BY JOHN BECKER, THE TIMES JUNE 28, 2012

We’re seeing some beautiful new real estate developments in the Maple Ridge and Pitt Meadows area, and many are at a variety of prices to suit a wide range of purchasers.

Whatever you choose, purchasing a home is expensive so it’s nice to save on government-offered programs whenever you can.

Some buyers will qualify for the first-time home buyers’ exemption from property transfer tax, but now there is another way to save.

The BC First-Time, New Home Buyers’ Bonus is a new time-limited program that could save you thousands of dollars.

Purchases of new homes made between Feb. 21, 2012 and March 31, 2013 by first-time buyers in B.C. can receive a one-time bonus payment worth up to $10,000.

The bonus is equal to five per cent of the purchase price (not including HST) up to a maximum of $10,000.

The bonus is scaled back for higher-income earners, but it’s still worthwhile investigating. The savings could help you hire movers, decorate your new home, take care of some mortgage payments, or be used in other useful ways.

You can apply directly to the BC Ministry of Finance for the bonus any time after you have taken ownership or possession of your home, provided you meet all the eligibility criteria.

How to qualify for the bonus:

The criteria for eligibility centres largely on two main factors: you are a new B.C.-resident homeowner and that the home is newly constructed or substantially (90 per cent) renovated.

More specifically, you will qualify if:

• You purchase or build an eligible new home located in B.C.

• You intend to live in the house as a primary residence.

• You, or for couples, you and your spouse or common-law partner, have never previously owned a primary residence anywhere in the world.

• In the case of multiple buyers of a home, each buyer must be a first-time home buyer having never owned a primary residence anywhere in the world.

• You file a B.C. resident personal income tax return, or if you move to B.C. after Dec. 31, 2011, you file a 2012 B.C. resident personal income tax return. Individuals or families who move to B.C. after Dec. 31, 2012 will not be eligible.

• You must be eligible for the B.C. HST New Housing Rebate.

• No one else has claimed the bonus in respect of the home.

Remember, new and old homes still require conveyancing services to ensure your real estate sale or purchase is legally complete. Contact your lawyer for details.

For more information on this program, visit http://www.sbr.gov.bc.ca/individuals/Income_Taxes/Personal_Income_Tax/tax_credits/fthb_bonus.htm or search the ministry website for “first-time buyers” and choose the first result among the search results. Enjoy your new home.

– John Becker is the senior lawyer at, Becker & Company, in Pitt Meadows. John has been a lawyer for more than 30 years, and now focuses his practice on corporate and commercial law, real estate and business succession planning. Send questions to: info@beckerlawyers.ca

© Copyright (c) Maple Ridge Times