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Navigating Liability and Bureaucracy In Yellowknife

Updated: Aug 4, 2019

*As published in Edge YK Magazine.

- How the fear of liability is crushing YK’s entrepreneurial spirit

“You’d be liable if anything went wrong.”

As a lawyer in Yellowknife, I frequently hear these words – spoken not as a rational analysis, but as a fear tactic intending to end a conversation. Liability has become a go-to word for pessimists, NIMBYs and naysayers who want to throw cold water on a project before it has even had a chance to start. The problem is, I rarely hear this word used with an appropriate assessment of what the liability is, or even consideration of what the word means.

Let’s start with the definition. According to Black’s Law Dictionary, liability is: “The state of being bound or obliged in law or justice to do, pay, or make good something.” So when your aunt tells you that you shouldn’t start a dogsled business (something the North has been doing successfully for thousands of years) because there is too much liability, she is likely in fact talking about the risk of a person getting injured. Yet this is not the same as the risk of damages being awarded in a civil court case. There is a lot more to a negligence analysis than: someone got hurt, better make the tour operator pay.

Using liability as a scare tactic as opposed to a rational analysis is especially problematic in the North, where the complexity of our common law system – rooted in hundreds of years of old white men arguing in wigs – was transplanted and imposed upon an Indigenous population already operating under its own legal systems.

In the North the problems, and the solutions needed for them, can be more extreme. Most of the people I know making real changes in the North have no time for lawyers blabbing on with legal jargon. Anyone speaking of liability problems but not solutions should ask themselves are they helping, or simply furthering a systemic problem?

One root of this problem is that lawyers are trained to see all the potential ways a scenario can go wrong, and are often only brought in too late – when things have gone wrong. Operating in a world of worst-case scenarios leads to lawyers ensuring there are additional layers of red tape (colonialism’s favorite tool by the way) by advising clients don’t do anything at all unless fully insured, waivered, trained and certified … and have you considered mandating everyone at the Snowcastle wear helmets? The ivory-tower posturing of the profession can lead to a ludicrous analysis of human behavior, such as one lawyer I know straight-faced telling me that a group of Canadians drinking beer by a bonfire attracts too much liability. Lawyers are often guilty of exaggerating risk, or at least qualifying it in legalese to the point where confused entrepreneurial clients simply give up on their dreams.

It is odd that Yellowknife, a frontier town and a place famous for houseboaters living with no homeowner insurance, is culturally risk averse. The causes are multifaceted, but a key culprit is the inflexibility of our regulatory regime.The regulatory system in the North is very recent, while simultaneously outdated. As a result of this paradox the knowledge and expertise to navigate this system has not yet developed. As a comparison, anyone looking to start a tech start-up in Vancouver has hundreds of people who have gone before them. In Yellowknife, most entrepreneurs find themselves having to pave new ground and the frequent butting of heads with various administrative bodies, whether it be the liquor inspector, fire marshall, or city inspector, have killed many ideas before they had a chance to even begin.

I truly applaud all entrepreneurs who have gone first because in Yellowknife every new idea seems to be twice as hard to bring to fruition. A prime example is the Woodyard Restaurant/NWT Brewing Company, which faced multiple start delays as territorial regulators wrestled with the task of creating the rules for commercial breweries.

Another example was the negotiations around whether to keep the Con Mine headframe standing. On one side, lawyers focused on the cost to remediate the headframe (a.k.a take it down). Yet any potential purchaser approached the debate with the idea of keeping it up. As a result the lawyers for the government put the headframe in the liability column, while a potential purchaser put it in an asset column. The point here is not to get into a debate of whether we should have kept the headframe (we should have), but to illustrate that liability is not clear cut and can mean different things depending on the lens. A strict interpretation of liability combined with a risk averse culture manifests in invisible ways in our city, creating absences: the absence of a manufacturing industry, start-ups, stores in our mall, an empty 50-50 lot with no one willing to risk taking such a project on.

As lawyers we are trained to switch sides of an argument depending on our client. We may have to take broad interpretations of regulation in order to let our client’s new idea fit into an outdated regulatory regime. As such we learn to recognize that the law and the judges who interpret it are flexible. How else would we manage to argue about it so much in court?

Yet all too often bureaucrats favour a strict interpretation, which saves them from having to go out on a limb for a member of the public they are supposed to serve. This means many of our most successful denizens just adopt the ‘better to expect forgiveness than ask for permission’ attitude. As lawyers we can’t advise our client to disregard a zoning by-law and just pay the fine later – but more importantly, in a proper system, we shouldn’t have to.

I am not calling for less regulation or disregarding safety. I am talking about making sure that legal risk and regulatory expectations are explained in clear terms that can be understood so that everyone knows what is expected. Liability and regulation by government should not operate as a scare tactic to end an idea before it has even started. I am talking about a cultural shift to view laws as adaptable, designed to provide safety and not simply check boxes.

So I implore you, anytime someone says you shouldn't do something because there is “a lot of liability,” ask them what they mean? Do they mean risk? Because most people naturally understand risk, and their own risk tolerance. Most people don’t understand “liability,” so they should ask a lawyer who does, and ask them for solutions. Not more problems.

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