|
© Copyright 2000 Rogers Media. The following article first appeared in the August 2000 edition of
BENEFITS CANADA magazine.
Communications.com
Three Canadian provinces are working to remove legal barriers to electronic communications. The
others should follow their lead.
BY PAUL LITNER
In a recent BENEFITS CANADA article (May 2000) my partner, Nancy Chaplick, outlined some of the legal risks
associated with using electronic technology to communicate with plan members. Chaplick points out that
several provisions under Ontario's Pension Benefits Act (PBA) require certain communications with members
to be in writing or refer to documents which must be signed.
The risk in using electronic communications is that they may not satisfy these specific requirements. For
instance, the Financial Services Commission of Ontario has indicated that delivery on-screen is not
equivalent to written documents. Plan sponsors that choose to provide documents electronically risk
contravening pension legislation. The legality of an electronic document may also be disputed at a later
date. This could be problematic in establishing the validity of beneficiary designation forms.
In her article, Chaplick says that it "seems inevitable that laws will eventually change to keep up with
technology, but the big question is when." The answer is soon.
In Ontario, Bill 88 (the Electronic Commerce Act, 2000) received second reading on June 21. The Bill is
based on the Uniform Electronic Commerce Act, adopted by the Uniform Law Conference of Canada in 1999 and
recommended for adoption by all provinces to promote uniformity across the country.
Intended to make the law media-neutral, Bill 88 will remove many of the legal barriers to electronic
communications. It contains a broad definition of electronic communications to cover current and future
technologies. While it does not require anyone to use or accept electronic communications without their
consent, it recognizes that an individual's consent can be inferred from their conduct--for example, by
their use of the communication.
RULES OF BILL 88
Bill 88 contains important functional equivalency rules, which help ensure that the use of electronic
communication, as opposed to paper documents, does not affect the validity of communications.
For example, when the law stipulates that information must be in writing, the electronic equivalent is
acceptable if it is "accessible so as to be useable for subsequent reference." Where the law requires the
plan sponsor to provide information in writing, it must be possible for the intended recipient to retain
(store or print) the electronic equivalent. It is not acceptable, though, to simply make the information
available passively, say, on a Web site.
In instances that require an original document, the electronic equivalent is acceptable if the integrity of
the information is preserved. And where the law states that a document must be signed, an electronic
signature may be used. Regulations are to be made to deal with the reliability of electronic signatures and
to prescribe specific rules relating to those signatures. In addition, Bill 88 allows, but does not
require, public bodies to use and accept electronic communications. It also gives them the power to impose
additional conditions to the functional equivalency rules.
Once passed--likely this fall--Bill 88 will provide solutions to many of the legal issues surrounding the
use of electronic communications in pension plan administration. It's not a panacea, though.
For example, the Bill does not alleviate any issues pertaining to the integrity and authenticity of data.
And it does not eliminate the need to ensure that personal information is kept secure and confidential.
It's also important to keep in mind that Bill 88 doesn't deal with fiduciary obligations with respect to
disclosure of information; it simply removes a number of the technical glitches.
While Bill 88 is not yet law--and the regulations guiding it have yet to be drafted and released--it's a
step towards recognizing the validity and effectiveness of electronic communications. Saskatchewan has
adopted, and Manitoba has introduced, similar legislation. Hopefully, the other provinces will soon follow
suit.
Paul Litner is a partner in the pension and benefits department at Osler, Hoskin & Harcourt in Toronto.
|
News
News
