Faculty of Law

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Established in 1887, the Faculty of Law is one of the oldest professional faculties at the University of Toronto, with a long and illustrious history.

Today, it is one of the world's great law schools, a dynamic academic and social community with more than 50 full-time faculty members and 15-25 distinguished short-term visiting professors from the world's leading law schools, as well as 600 undergraduate and graduate students.

This collection showcases some of the research and scholarly work by its faculty members.

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Accumulating Wisdom: An Updated Empirical Examination of Class Counsel's Fees in Ontario Class Actions
(Irwin Law, 2014-02) Alarie, Benjamin; Flynn, Peter
This article presents an empirical analysis of the decisions made by Ontario courts regarding the compensation of class counsel. The authors aim to provide an analytical tool that can be used as a guide for predicting and determining fee approvals in the future. The authors make the analysis more concrete by applying their empirical methodology to five currently ongoing class actions.
Advance Tax Rulings in Perspective: A Theoretical and Comparative Analysis
(Thompson Reuters, 2014) Alarie, Benjamin; Datt, Kalman H.; Sawyer, Adrian J.; Weeks, Greg
Advance tax rulings are an increasingly common feature of mature income tax systems throughout the world. The Organisation for Economic Co-operation and Development’s (OECD’s) work demonstrates that there has been a trend from 1990 to 2013 among OECD member countries to adopt advance tax rulings regimes. The international expansion of advance tax rulings seems both intuitively desirable and salutary. Upon deeper reflection, both theoretically and empirically, however, there is a puzzle. Why are advance tax rulings regimes so popular? This article makes two contributions to our understanding of advance tax rulings. The first contribution is to highlight that the increased pervasiveness of advance tax rulings internationally is potentially puzzling in the light of Givati’s analysis, which suggests that the balance of strategic considerations facing taxpayers systematically disfavours taxpayers seeking advance tax rulings. Theory thus appears – at least as a preliminary matter – to be out of step with the observed rulings practices tracked by the OECD. We then consider how to resolve the puzzling popularity of advance tax rulings. We find the increased pervasiveness of advance tax rulings regimes should not be entirely surprising despite the apparent conflict with economic theory. To complement the arguments from theory, we offer some tentative evidence that advance tax rulings may not be of any consequence economically speaking. Empirical analyses of panel data of rulings practices published by the OECD do not show any reliable correlations of observed practice with social or economic fundamentals. This finding is consistent with the puzzle posed by economic theory, which suggests that rulings regimes are not likely to be particularly important in practice. This can arise in part due to the relatively slow process for issuing advance rulings compared to the timeframe facing taxpayers to make key business decisions. From an optimistic perspective, advance tax rulings are best regarded as serving an expressive function in support of the rule of law and sound tax administration. Less generously, a cynic might be tempted to say that the resolution to the puzzle posed by the incongruence between theory and practice may be that the best reason to have a binding rulings regime may be because just about everyone else has one.
Ahead by a Century: Tim Edgar, Machine-Learning, and the Future of Anti-Avoidance
(Canadian Tax Foundation, 2020-07) Alarie, Benjamin
Tim Edgar’s contributions to our understanding of tax avoidance and anti-avoidance remain ahead of their time. In this paper, the author argues that Edgar’s work on building better general anti-avoidance rules (GAARs) was particularly prescient—correct in its claim that tax avoidance can and should be eliminated through effective anti-avoidance measures. The author maintains that although Edgar’s position and vision will eventually be realized, Edgar himself did not anticipate the manner in which this would occur. The author’s first claim is that the law is incomplete, and this incompleteness problematizes any insistence on the immediate adoption of strict anti-avoidance measures. The author explains how and why the current stage of legal development falls significantly short of completely specifying the law, including the tax law. The author’s second claim is that the next decades will bring considerably more sophisticated and effective approaches to legal development. Described, in broad terms, are some of the mechanisms through which our tax systems are moving toward a legal singularity (a state of the law that is functionally complete and well specified). The author proceeds to outline the implications of his two main claims for the future of GAARs and anti-avoidance— specifically, how the realization of a much more complete system of law will leave effectively no further scope for tax avoidance. Tax law, in the asymptotic realization of Edgar’s work and vision, will become well targeted and well equipped to address tax avoidance. Tax avoidance as we know it will cease to exist.
Assessing Tax-Free Savings Accounts: Promises and Pressures
(Canadian Tax Foundation, 2009) Alarie, Benjamin
Tax-free savings accounts ("TFSAs") became available in Canada in January 2009. A TFSA is a "tax prepaid" or "yield-exempt" investment account that does not provide any deduction for contributions and allows for tax-free compounding of investment returns in addition to tax-free withdrawals at any time. This article examines the theory surrounding tax-prepaid and tax-postpaid accounts and shows that there are important theoretical and practical differences in how the two types of tax-advantaged savings accounts operate. The paper predicts that the TFSA regime will not provide a significant incentive to save and that most contributions will not be "new" savings but will be amounts that would have been saved in any event or, equivalently, will be assets shuffled from taxable savings into the tax-free accounts.
Battling Uphill Against the Assignment of Income Doctrine: Ryder
(Tax Analysts, 2021-11-29) Alarie, Benjamin; Gardhouse, Kathrin
We examine a Tax Court case that our machine-learning model suggests was correctly decided (with more than 95 percent confidence). Ernest S. Ryder & Associates Inc. v. Commissioner, T.C. Memo. 2021-88, has received significant attention from the tax community. It involved tax avoidance schemes marketed by the law firm Ernest S. Ryder & Associates Inc. (R&A) that produced more than $31 million in revenue between 2003 and 2011 and for which the firm reported zero taxable income. The IRS unmasked more than 1,000 corporate entities that R&A’s owner, Ernest S. Ryder, had created and into which he funnelled the money. By exposing the functions that these entities performed, the IRS played the most difficult role in the case. Yet, there are deeper lessons that can be drawn from the litigation by subjecting it to analysis using machine learning. We shine an algorithmic spotlight on the legal factors that determine the outcomes of assignment of income cases such as Ryder. For Ryder, the time for filing an appeal has elapsed and the matter is settled. Thus, we use it to examine the various factors that courts look to in this area and to show the effect those factors have in assignment of income cases. Equipped with our machine-learning module, we are able to highlight the fine line between legitimate tax planning and illegitimate tax avoidance in the context of the assignment of income doctrine.
Bet on It: The Taxation of Online Gambling
(Irwin Law, 2008) Alarie, Benjamin; Ingelman, Alex
Internet use has grown dramatically in Canada in recent years. This trend has joined with the increasing popularity and social legitimacy in Canada of gambling to produce an environment that is particularly receptive to the growth of online gambling. Online gambling sites compete with gambling options provided by provincial governments. This is problematic. Casual gambling gains are not subject to income tax at the federal or provincial level. This has been acceptable historically because subjecting casual gambling gains to income tax is administratively difficult and provincial governments have been earning considerable and growing revenues in an indirect way by being the regulators and providers of most Canadian gambling opportunities. However, to the extent that Canadians (and tourists from the United States and elsewhere) are now beginning to substitute online gambling with foreign entities for gambling facilities controlled by the provinces, this indirect revenue will be lost. The primary implication of the proliferation of foreign gambling websites is therefore that Canadian provincial governments will be sacrificing gambling revenues. Canadian policymakers should respond to this challenge by asking and answering two fundamental questions. First, should net gambling gains be made subject to income tax? Second, how should online gambling be regulated? With regard to the first question, so long as an effective response is mounted to the issues raised by the second question, net gambling gains need not be taxed. Given widespread tastes for gambling and the possibilities presented by emerging technologies, prohibition is not likely to be a stable long-term approach. As the early 20th century experiences with the attempted prohibition of alcohol demonstrated, attempts to prohibit online gambling are apt to be costly to enforce and relatively ineffective. Two more promising routes to preserve government revenues from gambling include (i) following the example set by the United Kingdom in fashioning a new regulatory approach for gambling more generally (this would require the cooperation of the federal government); and (ii) within the existing legal framework at the federal level, provinces individually or collectively could operate one or more competing online gambling sites.
Captive Insurance Appeal in Reserve Mechanical Will Likely Fail
(Tax Analysts, 2021-08-30) Alarie, Benjamin; Xue Griffin, Bettina
In this article, we examine the Tax Court’s decision in Reserve Mechanical [T.C. Memo. 2018-86] and the strength of its appeal on the issue of whether the taxpayer was exempt from tax as a valid insurance company under section 501(c)(15). Using Blue J's machine learning model of insurance arrangement case law, we find with 77 percent confidence that Reserve’s appeal will be dismissed by the Tenth Circuit. Reserve obtained leave from the court to file a supplemental brief after oral arguments concluded that may contain documentary evidence that could potentially be persuasive for the court. The Blue J prediction reported here is limited to the Tax Court’s findings of fact, the positions of the parties in their briefs before oral argument, and their oral arguments. Our analysis demonstrates how machine learning can help identify the patterns from past decisions and identify the most salient considerations when courts are assessing whether a taxpayer has crossed the line from legitimate tax planning to unsuccessful tax avoidance.
Cashaw: Conflicting Duties and the Trust Fund Recovery Penalty
(Tax Analysts, 2022-11-28) Alarie, Benjamin; Velez, Ann
Employers in the U.S. are required to help the federal government in its tax administration endeavors by periodically withholding and remitting employees’ payments for income taxes, Social Security, and Medicare. That duty is special: Under section 7501(a), employers hold employee payroll tax withholdings in trust for the United States. For this reason, payroll withholdings are sometimes referred to as “trust fund taxes.” One of the tools the IRS uses to collect withholdings when employers fail to remit them on time (or at all) is the trust fund recovery penalty (TFRP). A person can be found responsible and willful for failure to remit even if they were neither a director nor an officer of the employer. And a person can be saddled with TFRP liability even if they experienced a conflict between the duty to remit taxes and other duties, such as obedience to their employer, obligations under state law, their professional code of conduct, or their moral convictions. Litigated TFRP cases frequently reflect these kinds of challenging circumstances. Cashaw is no exception. In October 2021 the Tax Court, while expressing sympathy for Pamela Cashaw’s situation as an administrator of a cash-strapped hospital, noted that it was a court of law, not equity, and ruled that she must be held personally liable for the TFRP in the approximate amount of $173,000. The case has been appealed to the Fifth Circuit. We assess Cashaw’s prospects on appeal. Blue J’s TFRP machine-learning algorithm has been trained to identify the likelihood that the penalty will or will not be applied by a court. The algorithm considers the factual circumstances of more than 375 court decisions concerning the TFRP between 1956 and 2022. Leveraging the Blue J TFRP model to generate our analysis and assess various interpretations of the facts and circumstances in Cashaw, we find that there is a substantial probability that the Tax Court’s decision on TFRP liability will be reversed if Cashaw can persuade the Fifth Circuit that the government has overstated her level of involvement in reviewing and approving payroll and that at least one of the following is accurate: (1) she reasonably relied on statements made by others; (2) her actions after learning of the trust fund tax delinquencies were appropriate; or (3) it was reasonable for her to prioritize her duty to the hospital’s patients over any trust fund tax responsibilities. On the other hand, if the Fifth Circuit endorses the Tax Court’s findings of fact, the Blue J TFRP algorithm predicts a win for the government with 86 percent likelihood. Some matters being raised on appeal are beyond the scope of the TFRP model. For example, Cashaw is arguing that the IRS abused its discretion and violated her constitutional due process rights. Because those issues are outside the TFRP algorithm, it cannot be used to generate a prediction on them. As with many TFRP cases, the most likely outcome greatly depends on how the relevant facts and circumstances are characterized. In this context, the ability to rapidly assess different permutations and combinations of facts and circumstances with the Blue J TFRP model is particularly helpful.
The Challenge of Tax Avoidance for Social Justice in Taxation
(Springer International, 2015) Alarie, Benjamin
The Occupy Wall Street (OWS) movement has been criticized for not having a tax policy agenda. Critics contend that it has "no message," "no goals," and "no leaders." This contribution accounts for this policy agenda deficit. Various tax policy prescriptions that address social resource inequality, including a wealth tax proposed by Pikkety and Goldhammer (Capital in the twenty-first century, 2014), suffer from serious weaknesses. More specifically, I explain why the most salient of the income tax policy ideas (increasing rates) is not, on its own, a solution. To see why, consider the US. The US has high corporate income tax rates; nevertheless, large American corporations such as Apple, GE, Starbucks and Google have been able to reduce their effective corporate income tax rate liability below statutory rates, often close to zero. The crux of the problem is that increasing income tax rates leaves those confronting such rates with greater incentive to engage in various activities in order to avoid those taxes. It also increases the return from lobbying for tax changes that make avoiding' that burden more possible. Therefore, increasing income tax rates is not the clear-cut effective policy prescription one might think it should be. The example of the Bush tax cuts for individuals, and certain kinds of capital income, illustrates that cutting income tax rates is also not the right approach. In many countries, claims that cutting taxes will increase tax revenues (i.e., that we "are on the wrong side of the Laffer curve") are incorrect. Thus, if income tax rates are increased, it is not necessarily the wealthiest that will bear the greatest burden, and if tax rates are cut, it is not certain-or even particularly likely-that it will be the least well off who will benefit. OWS ought therefore not to be criticized for not articulating a message with respect to income tax policy. Recent developments show that popular political pressure on leaders has led the G20 to the right-albeit difficult-track. The best income tax reform is one of base broadening and increasing international tax cooperation, perhaps coupled with making a transition from reliance on income tax to a greater reliance on coordinated wealth taxes. Responding intelligently to demands for a more progressive tax system that promotes the realization of social justice will require us to confront difficult practical and political challenges. These tax policies are available only if the political will can be found to sustain their introduction and implementation.
Charter Decisions in the McLachlin Era: Collegiality and Ideology at the Supreme Court of Canada
(2009) Alarie, Benjamin; Green, Andrew
This paper examines how justices on the Supreme Court of Canada voted in Charter appeals between 2000 and 2009. Charter appeals, at least in popular belief (and possibly also in theory), have the greatest potential to reveal voting that is influenced by extra-legal policy preferences. Confining the analysis to the time during which Chief Justice McLachlin has led the Court aids in controlling for the effects of a particular Chief Justice in assessing the roles of ideology and consensus. Several of the Court's members have exhibited sharply different voting proclivities in s.15 (equality rights) appeals as compared with Charter claims made in the context of criminal law appeals (and, indeed, other Charter appeals). This finding suggests that at least some of the justices on the Court have been influenced by policy preferences on at least some occasions in discrete areas of Charter rights adjudication. On the other hand, it also suggests that judicial policy preferences are richer and significantly more nuanced than can adequately be captured by a simple "right"-"left" or "conservative"-"liberal" characterization of these policy preferences. The paper discusses a number of implications of the analysis and findings.
Chemoil: Economic Substance, Tax Credits, and Unprofitable Ventures
(Tax Analysts, 2022-10-31) Alarie, Benjamin; Yan, Christopher
The Chemoil tax dispute provides an opportunity to explore the relationship between the economic substance doctrine and unprofitable transactions that are rendered economically viable by tax credits. Chemoil raises a particularly interesting point of contention. Transactions that generate specific excise tax credits (which are designed to encourage otherwise unprofitable activities) may appear to run afoul of the economic substance doctrine, which considers whether transactions have independent economic significance setting aside the tax benefits derived from the transactions. Thus, there is a tension between the congressional intent to provide an incentive for otherwise unprofitable activities and the congressional intent behind the economic substance doctrine, which, by its nature, denies tax benefits that arise out of transactions with no economic effects apart from their federal tax implications. Moreover, if a taxpayer cannot avoid application of the economic substance doctrine to the relevant transactions, the dispute raises the further question of whether transactions whose profitability is derived solely from excise tax credits should still be considered as having economic substance because of the nature of how these tax credits operate to encourage otherwise economically unviable yet ostensibly congressionally endorsed activities.
Computational Legal Research and the Advocates of the Future
(Thomson Reuters Canada, 2018) Alarie, Benjamin; Niblett, Anthony; Yoon, Albert
Artificial intelligence and machine learning grab headlines these days, and for good reason. Consider the remarkable developments that machine learning has made in the past decade. Many of us have come to expect instantaneous access to all of the world’s knowledge with search engines. Logistics companies use machine learning to optimize supply chains in ways that were unthinkable in years past. Online retailers make suggestions about what consumers might like to buy based on past browsing activity, generating billions in additional revenues annually. Autonomous vehicles are on the road in many jurisdictions and are predicted to be mainstream within the next ten years. In the legal realm, various popular and legal publications include headlines that use sci-fi terms like “robot lawyer” and sensationalize the use of computing power and algorithms in the legal profession. All of this appears to blend reality with science fiction, and to combine software engineering with hype and marketing bluster. Lawyers typically react to media accounts of these developments in one of two, polar opposite ways. Some confidently dismiss the hype around legal technology and take the position that artificial intelligence will never replicate precisely what they can do as advocates and so conclude that there is nothing at all that they should even consider changing about what they do and how they do it. Others are anxious about the advent of machine learning and artificial intelligence and what it might mean for their own work and the future of the profession more generally. This anxiety is fomented by a sense of helplessness: that there is nothing in particular that they feel they can do to prepare themselves for developments that have had and will continue have significant impact on other industries (e.g., transportation). Both reactions are understandable; each has some merit. Neither, however, captures the full story.
Copthorne Holdings and the Future of the General Anti-Avoidance Rule
(2012) Alarie, Benjamin
These are slides from a recent conference on the judgment of the Supreme Court of Canada in Copthorne Holdings.
The Debt-Equity Distinction and Tribune Media
(Tax Analysts, 2022-04-25) Alarie, Benjamin; Gardhouse, Kathrin
To illustrate the insights possible with machine learning, we use the Blue J debt-equity predictor to analyze part of the decision recently rendered in Tribune Media. Tax Court Judge Ronald L. Buch discussed and assessed the 13 Dixie Dairies factors in Tribune Media, analyzing whether the obligation ought to be properly characterized as debt or equity. Tribune Media was not a particularly close call, as the court (and Blue J’s model, with 86 percent certainty) concluded that the obligation in question was an advance on account of equity, with seven factors pointing in the direction of equity, three factors weighing toward debt, and three neutral factors. But as any tax lawyer with experience in analyzing the debt-equity distinction will remind us, an accurate assessment on the merits is not a simple matter of counting factors on each side of the ledger. Indeed, analysis leveraging the Blue J debt-equity model shows that a different position on only two of the Dixie Dairies factors (one of which was characterized by the court in Tribune Media as neutral) would have flipped the outcome of the debt-equity characterization (with 77 percent confidence). This would not have been a long shot; on these two factors, the taxpayer had a prima facie reasonable prospect of success. However, the text of the decision does not disclose that these two factors could have made such a difference. In fact, as we will explore, there are curious differences between the decision’s determination of the factors’ significance and the importance suggested by Blue J’s model based on the accumulated wisdom from the decisions of judges in past debt-equity cases. We attribute this gap, at least in part, to the rhetorical challenge of producing compelling reasons in close cases.
Deducting Legal Expenses: Unpacking the IRS’s Appeal in Mylan
(Tax Analysts, 2022-08-29) Alarie, Benjamin; Condon, Kim
The Tax Court in Mylan v. Commissioner, 156 T.C. 137 (2021) rejected the IRS’s position that expenses incurred in litigating patent disputes under the relevant specialized IP regime were capital expenditures. The IRS now seeks to have the decision remanded with instructions to disallow the deductions. As we will show, the IRS’s position on appeal is aggressive. Our algorithms predict with over 95 percent confidence that the legal expenses at issue in Mylan would have been treated by the courts in the past as ordinary and necessary business expenses and, further, that the expenditures are unlikely to be treated as capital expenditures on appeal.
Disguised Distributions and Management Fees: Aspro Revisited
(Tax Analysts, 2022-05-30) Alarie, Benjamin; Yan, Christopher
Our study suggests that there is a significant overlap between the factors that drive the ordinary and necessary analysis and the reasonable compensation analysis in determining the deductibility of business expenses. Our review demonstrates that the taxpayer in Aspro would have benefited from considering all the factors identified by Blue J’s algorithm at the tax-planning stage. Although we did not render a prediction in our previous article on the deductibility of the expenses in dispute, we did examine how machine learning could be used to assess the likelihood of whether the payments in question were ordinary and necessary expenses. Recall that a payment must not only be (1) ordinary and necessary to be deductible, but must also be (2) reasonable and purely for services (that is, the payment cannot be found to be a disguised distribution of profits). The Tax Court in Aspro denied the deduction of all the management fee payments — holding that the payments made to corporate shareholders were not ordinary, necessary, and reasonable — while payments made to the individual shareholder satisfied the ordinary and necessary test, but were not reasonable. As it happens, the Eighth Circuit affirmed the Tax Court’s denial of the management fees Aspro paid to its shareholders, finding no error in the lower court’s determination that Aspro failed to demonstrate that the management fees were reasonable and failed to present evidence showing what like enterprises under like circumstances would ordinarily pay for similar management services. But the appellate court did not engage in any significant substantive discussion on whether the expenses were ordinary and necessary and decided the issue on the narrower basis of the Tax Court’s finding that the taxpayer failed to establish the fees were reasonable and for services performed. At first glance, the absence of any major discussion of the ordinary and necessary nature of the expenses would appear to render our original analysis using machine learning as moot. However, our analysis reveals that the taxpayer would have been in a much stronger position on both fronts by addressing the factors identified by Blue J’s algorithm at the tax-planning stage.
Docket Control at the Supreme Court of Canada: What's Behind the Screen?
(2014) Green, Andrew; Alarie, Benjamin
High courts play an important law and policy-making role in most countries. Considerable professional and popular attention is justifiably paid to the outcome of appeals heard by high courts. However, in many jurisdictions, the prior step of the high court choosing which appeals to hear is arguably at least as important as the outcomes of the appeals themselves that are decided. The Supreme Court of the United States has wide latitude to decide which cases to hear, and denies about 99% of certiorari petitions. Although the Supreme Court of Canada uses a different process to populate its docket (a mix of about 20% appeals “as of right” and 80% appeals granted leave to appeal), like its US counterpart the Canadian court refuses to grant leave to appeal to a high proportion of the applications for leave to appeal. We investigate how the institutional structure for deciding which cases to hear affected the agenda of the Supreme Court of Canada over the period from 1990 to the present. More specifically, we examine whether the justices’ participation in the leave to appeal process suggests that there has been ideological agenda setting at the Supreme Court of Canada. Consistent with our earlier work on the Supreme Court of Canada, we detect only weak levels of influence of ideology on decision making with respect to applications for leave to appeal. Importantly, too, the weak effects extend even to the Chief Justice, which is especially telling given her powers to set the size and composition of the panels that ultimately hear appeals.
Economic Substance Doctrine: Still Giving Perrigo Heartburn?
(Tax Analysts, 2021-07-26) Alarie, Benjamin; Yan, Christopher
In this article, we evaluate the strength of the commissioner’s economic substance arguments in the pending Perrigo case, which was heard before the U.S. District Court for the Western District of Michigan in a nine-day bench trial that concluded on June 7, 2021. Although there are multiple issues at play in Perrigo, here we focus primarily on the economic substance arguments advanced by the government and the taxpayer. In addition to defending its transactions as having economic substance, the taxpayer takes the position that the application of the economic substance and sham doctrines is improper in the circumstances, and the court should focus solely on remedying any alleged deficiencies through section 482 transfer pricing mechanisms designed to deal with disputes of this nature. Although it remains to be seen whether the court will bypass what would otherwise be a significant issue in cases like this one, any discussion of the issue by the court will necessitate some commentary on the nature of the transactions and whether they meet some de minimis threshold to overcome the government’s sham doctrine and economic substance attacks. Based on only the information available leading up to trial and without regard to the sufficiency of evidence, Blue J’s algorithm predicts with 68 percent confidence that a court will find that the transactions in question will survive an economic substance challenge. This prediction does not, however, speak to the extent to which the taxpayer’s income may be subject to recharacterization under section 482 transfer pricing rules. The economic substance issue could go either way, especially since the merits of the case turn on disputed material findings of fact and conclusions of law that are unavailable.
Executive Compensation and Tax Policy: Lessons for Canada from the Experience of the United States in the 1990s
(2003) Alarie, Benjamin
Until now the legal and regulatory measures that have been taken in the United States and Canada to combat excessive executive compensation have been largely ineffectual. The one possible exception is the tax deductibility cap of ý162(m) of the US Internal Revenue Code, which was introduced in 1993. A similar but improved provision ought to be considered by Canadian policymakers. There are several lessons Canadian policymakers can take from the US experience with ý162(m). First, policymakers should consider tightening, although not eliminating, the performance-based exemption. Second, policymakers should not anticipate a deductibility cap to raise a considerable amount of tax revenue or totally prevent CEOs from engaging in rent-seeking behaviour. Third, policymakers should strongly consider prohibiting executives from unravelling the incentives associated with performance-based compensation by entering into hedging transactions. Finally, Canadian policymakers would be wise to carefully consider the effects a deductibility cap would have on the competitive international environment in which Canada competes for corporate patronage.
How Artificial Intelligence Will Affect the Practice of Law
(2017) Alarie, Benjamin; Niblett, Anthony; Yoon, Albert
Artificial intelligence is exerting an influence on all professions and industries. We have autonomous vehicles, instantaneous translation among the world’s leading languages, and search engines that rapidly locate information anywhere on the web in a way that is tailored to a user’s interests and past search history. Law is not immune from disruption by new technology. Software tools are beginning to affect various aspects of lawyers’ work, including those tasks that historically relied upon expert human judgment, such as predicting court outcomes. These new software tools present new challenges and new opportunities. In the short run, we can expect greater legal transparency, more efficient dispute resolution, improved access to justice, and new challenges to the traditional organization of private law firms delivering legal services on a billable hour basis through a leveraged partner-associate model. With new technology, lawyers will be empowered to work more efficiently, deepen and broaden their areas of expertise, and provide more value to clients. These developments will predictably transform both how lawyers do legal work and resolve disputes on behalf of their clients. In the longer term, it is difficult to predict the impact of artificially intelligent tools will be, as lawyers incorporate them into their practice and expand their range of services on behalf of clients.

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