The Ontario Court of Appeal has recently released its decision in R. v. Michaud, 2015 ONCA 585 (“Michaud”). This decision is of importance as the Court’s endorsement of the hybrid model of ex ante / ex post legislation has the effect of recognizing the role of risk assessment as a legal necessity. Risk assessment has always had an important role in business models and compliance. Now, however, the Ontario Court of Appeal has recognized the legislature’s codification of such a model.
PRO-ACTIVE EX ANTE CONSTRAINTS
Michaud is a commercial truck driver and under s. 68.1(1) of the Highway Traffic Act and s. 14(1) of an equipment regulation, he was required to equip his truck with a speed limiter set to a maximum speed of 105 km/h. Michaud interfered with the proper operation of the speed limiter which was set at 109.4 km/h. He was charged and admitted to the facts. The Justice of the Peace at the first instance acquitted Michaud on the basis that the legislation infringed his right to security of the person and thereby violated s. 7 of the Charter. The trial justice found that expert evidence did not establish the use of speed limiters increased safety and decreased accident rates, and that the maximum speed stipulated by the legislation was arbitrary. On appeal, the Ontario Court of Justice admitted fresh expert evidence, found no Charter violation, and set aside the trial decision. Michaud appealed to the Court of Appeal, which found that while the legislation deprived him of his s. 7 Charter right to security of the person, the infringement of his s. 7 rights was justifiable under s. 1 of the Charter given the contextual factors of safety regulation, including risk assessment and regulation design. In other words, the ex ante (or deterrent) provision of the legislation overreached in its effect, in that it applied to all truck drivers including compliant truck drivers that did not require a speed limiter as they necessarily obeyed speed limits in the first instance. This effect was considered to be overly broad by the court, but its overbroad application was justified. The objective of improving highway safety was pressing and substantial and rationally connected to the speed limiter legislation in a proportionate manner that minimally impaired drivers’ right to security. The public benefits associated with improved highway safety exceeded the detrimental effects on the s. 7 right of truck drivers.
RISK ASSESSMENT AS A CORE CONCEPT
The design of the safety regulations contained in the Highway Traffic Act and associated regulation in issue were of the “hybrid” variety, meaning that they had an “ex ante” (or precautionary) element and an “ex post” (or deterrent element). The ex ante element of the legislation imposed a speed limited requirement that would prevent a certain kind of operation of the truck (i.e. speeding), while the ex post element addressed safety issues in deterring unsafe behaviour (i.e the threat of a ticket for the deliberate interference with the speed limiter). The Court of Appeal recognized the benefit of a hybrid model as it achieves the objective of highway safety and is “this is entirely appropriate where human life or safety is at stake, and where there is scientific uncertainty as to the precise nature or magnitude of the possible risk.” An ex post model will set the standard, and if the standard is breached, prosecution can occur after the fact. An ex ante model attempts to prevent the harm from occurring in the first instance, by requiring prior approval from a regulator. This is not the first decision where a Canadian court has recognized the role of risk assessment. In June, 2011, Canadian energy company Niko Resources Ltd. (“Niko”), pled guilty and paid a fine of more than $9 million pursuant to the Corruption of Foreign Public Officials Act as a result of bribes paid to Bangladeshi official. Niko was placed on probation and was required to develop a compliance procedure based on a risk assessment:
The company will develop these compliance standards and procedures, including internal controls, ethics and compliance programs on the basis of a risk assessment addressing the individual circumstances of the company…
In light of the imposition of the compliance measures imposed on Niko, and now the Court of Appeal’s acknowledgment of the hybrid model, companies should begin, if they have not already, to put in place effective company-wide awareness, monitoring and compliance measures similar to those imposed on Niko. In our view, ex ante regulations will likely increase in use in certain sectors which will require compliance programs as they are enforced ex post, certainly when safety issues are at stake. Indeed, the Court of Appeal noted in its decision:
There is good reason to favour ex ante rules where human life or safety is at stake and where there is scientific uncertainty as to the precise nature or magnitude of the possible harms. In such cases, regulators utilize a “precautionary principle,” which the authors of Risk Management note, “tackles the problem of an absence of scientific certainty in certain areas of risk, and directs that this absence of certainty should not bar the taking of precautionary measures in the face of possible irreversible harm” (1:40). The Supreme Court has recognized the precautionary principle in the context of environmental protection regulations: 114957 Canada Ltee v. Hudson (Town),  2 S.C.R. 241.
Although the problem of over-inclusiveness would not arise if the legislature had chosen to penalize speeding truck drivers instead of preventing them from speeding in the first place, the regulator has determined that the objective of highway safety is best met by a hybrid regulation that couples an ex ante precaution with an ex post consequence.
In our view, we will begin to see a shift in both the legislature’s crafting of rules and policy, as well as am increased use of risk assessment and compliance programs within business policy. As the Court of Appeal noted, a hybrid model “combines the effectiveness of both approaches” in that these rules are proactive and protective.  Michaud, at para 126.  Archibald, T.L., Jull, K., Roach, K.W., Regulatory and Corporate Liability: From Due Diligence to Risk Management (Toronto: Canada Law Book, 2015) (“Risk Management”), page 2-2.  S.C. 1998, c. 34.  In the Court of Queen’s Bench of Alberta Judicial District of Calgary, between Her Majesty the Queen and Niko Resources Ltd., Agreed Statement of Facts (June 23, 2011).  Michaud, paras. 102-103, citing Risk Management, supra note 2 at 2:15:30.