Blaze and I have sought advice on how best to proceed with a legal challenge to Canada’s proposed IGA legislation to implement FATCA.

The advice received from legal people we consulted is that the first step should be to obtain a “warts and all legal opinion” on the merits of a challenge and that Joe Arvay, given his expertise and credibility, is the one to do this.

Please provide your comments and suggestions to this proposal, originally posted on Sandbox:

http://maplesandbox.ca/2014/possible-charter-challenge-legal-opinion-needed-and-funds/

“As most of you know, the possibility of a challenge under the Canadian Charter of Rights and Freedoms has been discussed for some time.

With the signing of the IGA and proposed legislation to override existing Canadian laws, we need to determine our next steps.

http://www.fin.gc.ca/treaties-conventions/pdf/FATCA-eng.pdf

http://www.fin.gc.ca/drleg-apl/2014/can-us-eu-0214l-eng.asp

Prominent Canadian constitutional lawyer Joseph Arvay has reviewed the IGA and the proposed legislation. He has recommended as the first step a formal legal opinion to advise if a challenge would have a reasonable possibility of success. In his letter to me (real name and address removed)

http://maplesandbox.ca/wp-content/uploads/2014/02/Mr-Arvay-Opinion-Letter.pdf

Mr. Arvay said

“You have asked for our opinion as to whether or not a challenge to any proposed legislation would have a reasonable prospect of success. Our initial review of the proposed legislation indicates that there may be a serious question as to whether it would withstand constitutional scrutiny once enacted. We question whether the proposed legislation is compliant with the Charter of Rights and Freedoms or whether it violates protections under the Charter against discrimination based on national origin or citizenship, against unreasonable search and seizure and against deprivation of liberty except in accordance with the principles of fundamental justice. We also question whether the proposed legislation falls validly under the federal jurisdiction over taxation, or whether it is in substance regulation of financial institutions in which case federal jurisdiction is limited to regulating banks but not provincially regulated financial institutions such as credit unions.”

IRSCompliantForever and I have communicated with four other lawyers. They all agree a legal opinion should be our next step before proceeding further.

Mr. Arvay’s letter also says

In order to answer those questions, a proper opinion needs to be prepared. We are prepared to prepare this opinion for a fee of $15,000 plus applicable taxes.

So, the cost for this legal opinion would be $15,000 plus tax, which would bring the cost for the opinion to around $17,000. To many, that cost for an opinion probably seems steep.

However, the four lawyers agree that this is a very reasonable cost and is far below what they would expect we would pay for a formal legal opinion.

To put the costs in perspective, we would need one contributor at $17,000 or 17 contributors at $1,000 each or 34 contributors at $500 each or 100 contributors at $170 each or 170 contributors at $100 each or a combination of those or other amounts. (Due to the administration, we would request donations of a minimum of $100 each.)

We should aim to raise more than that amount for contingency and administrative purposes.

There is agreement among those that we have contacted–including with a senior legal expert–that Mr. Arvay would be an excellent choice for a Charter challenge.

The next step is to decide a) Do people want to proceed with this? b) Do people want to retain Joe Arvay for a legal opinion? c) Are people willing and able to contribute to the costs?

Many individuals have asked if Canadian Civil Liberties Association could assist with the case. Abby Deshman has advised each case must go through an individual approval process. When CCLA becomes involved:

The general mode of operation is as an intervener, requesting the court add CCLA to the ongoing case as a friend of the court. Normally, the case is already going forward with the parties independently represented. As a non-profit, we unfortunately do not finance others’ legal cases, and in general are not in a position to represent individuals in launching legal actions.

Ms. Deshman, however, has advised it is possible CCLA might be able to provide some assistance with legal research.

Please advise if a) You agree we should seek this legal opinion b) if you would be able to contribute (we will request a minimum donation of $100).

Someone is researching ways we might raise and administer the funds if people do want to proceed and are able to contribute.

If the case proceeds beyond the legal opinion though the courts, the costs will, of course, increase greatly. We are not able to say exactly what the costs would be, but we expect they could be $100,000 to $250,000 or more.

You should note that after we receive a legal opinion, we will not be able to publicly share the details of the content or post it on line. This is for strategic reasons and to ensure confidentiality of the position the case may take before the courts.”