When a slew of Canadian organizations made the transition at the beginning of the year to an international financial reporting standard, lawyers faced almost overnight new ground rules that could prove to be burdensome, endanger solicitor-client privilege, and potentially prejudice defence in litigation cases.
Misgivings arise from the way that unresolved legal claims, or “contingencies” in accounting speak, must be reported under International Financial Reporting Standards (IFRS). IFRS, quite simply, imposes a higher threshold for identifying claims, takes a different approach to estimating the expected value of a claim, and has more extensive disclosure requirements.
“I don’t see lawyer’s lives getting any easier with IFRS,” remarked Stephen Kerr, a partner with Fasken Martineau Dumoulin LLP, who practices general corporate and commercial law. “Suddenly we’re going to be asked to do a lot more, with a lot more precision and a lot faster.”