Wednesday, August 01, 2007

Of Due Process

Recently, we have had two fairly significant (to Canadians at least) court rulings.

The first being Conrad Black being found guilty of securities fraud.

The second happened yesterday: Felderhoff found not guilty in Bre-X.

These two cases provide an interesting insight into some misconceptions that some people have of the justice system.

Both cases are excellent examples of due process taking its course - regardless of the outcome.

Unfortunately, it seems that too many people confuse the term "charged" with "guilty":

Stan Buell, another investor who lost his Bre-X investment, founded the Small Investor Protection Association in the aftermath of the Bre-X scandal.

He calls the Bre-X fiasco "the scam of the century" and told CBC News he can't believe no one will be forced to pay for it.

Bre-X may well have been Canada's biggest swindle of the 20th Century, but that doesn't mean that there's enough concrete evidence to hold Felderhoff responsible. (One may suspect all you want, but suspicion is not proof)

Due process is essential to the proper functioning of any democracy. We all have the right to due process - the government does not have the right to detain any of us without charge and trial.

Yet, that is what the US government has done by executive fiat and the "PATRIOT Act" which effectively suspend the notion of habeas corpus in the United States.

In Canada, we have a Conservative government which has put forth amendments to our criminal code that subvert the presumption of innocence, and have created a "no-fly list" that has no due process whatsoever around it.

It's intriguing how the "law-and-order" crowd are the very people so willing to suspend the very fundamentals of that system.

There's nothing to say that Canada's securities laws need to be revisited and reviewed in light of the Bre-X scandal, but let us not lose sight of the fact that any restatement of that legislation has to be carefully considered. Too broad a brush and we will create an environment where lawsuits and accusations of fraud will happen the moment a company hits a rough quarter.

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