Hint of compromise not necessary to shield meeting communications with settlement privilege

On July 6th, the Ontario Superior Court of Justice held that communications exchanged in a settlement meeting need not demonstrate “a hint of compromise ” to be subject to settlement privilege. Such a requirement would be inappropriate, the Court said, given the ebb and flow of a settlement meeting. Here are the key quotes:

In my view, where the communications in question are made in a meeting the purpose of which is to attempt to resolve a dispute, as opposed to through a written communication that may or may not be marked “without prejudice”, different considerations apply to the third requirement for settlement privilege. This is because a participant at such a meeting cannot be expected to calibrate the words chosen in each sentence spoken during an open, free-flowing and unscripted conversation to ensure that each sentence meets the three requirements for settlement privilege.

…

In my view, the communications at a meeting that is held for the purpose of attempting to settle a dispute, when considered after the fact, do not need to reveal a willingness by either side to compromise the litigious dispute in order for settlement privilege to be engaged. Even if the dispute is not resolved, and even if no offer of settlement is made during the meeting by one side, or by either side, if the first two requirements for settlement privilege are satisfied, then the communications at the meeting will be protected by settlement privilege if the purpose of the meeting was to attempt to effect a settlement of the dispute (unless an exception applies).

Singh v. Progressive Conservative Party of Ontario et al, 2017 ONSC 4168.

Man CA gives broad protection to lawyers’ reporting letters

On June 29th, the Court of Appeal of Manitoba held that the law has evolved such that reporting letters in real estate transactions (though often primarily summarizing facts) should be presumptively subject to solicitor-client privilege. It said, “Such correspondence is the direct result of a lawyer providing legal advice or otherwise acting as a lawyer, is descriptive of the services provided by the lawyer and arises as a result of the solicitor-client relationship.” This represents a change in Manitoba law, though is consistent with case law in other jurisdictions, including Ontario.

R v Douglas, 2017 MBCA 63 (CanLII).

Alberta CA demands greater scrutiny of privilege claim re internal investigation

On July 4th the Court of Appeal of Alberta held that a chambers judge erred by accepting a claim that all documents created or collected in the course of an internal investigation were privilege without conducting a record-by-record analysis.

Legal counsel for the company initiated the investigation after a workplace fatality and directed the investigation team to segregate the investigation documents and to endorse all material as privileged and confidential. Legal counsel later swore that the dominant purpose of the investigation was the contemplation of litigation, which the chambers judge said, “invariably and logically leads to the collateral finding that, within the context of Suncor’s internal investigation that was carried out in anticipation of litigation, the information and documents created and/or collected during the internal investigation with the dominant purpose that they would assist in the contemplated litigation, are integrally covered by litigation privilege.”

The Court of Appeal held that the chambers judge erred by not conducting an analysis about the reason for the creation of each record (or bundle of records). It explained that statements may have been taken, for example, under a standing workplace protocol or that surveillance video or business records may have been collected – and that neither kind of record would be the subject of a proper privilege claim.

Alberta v Suncor Inc, 2017 ABCA 221 (CanLII).

BCCA gives broad protection to e-mail communications with inside counsel

It is inappropriate to closely parse solicitor-client communications in assessing the scope of privilege; the entire “continuum of communications” must be protected. This is the principle articulated in a June 8th decision of the Court of Appeal for British Columbia.

The Court allowed the appeal of a chambers judge order to produce parts of a series of e-mails between a government lawyer and staff at an administrative tribunal. The content ordered to be produced included:

two paragraphs and two sentences of a ten paragraph advisory e-mail in which the chambers judge suggested the lawyer stepped beyond his role as legal advisor and impinged upon the tribunal’s decision-making authority;
a follow-up e-mail that the chambers judge held was not privileged for similar reasons; and
follow-up correspondence between (internal) clients discussing the lawyer’s advice.

The Court held that all this communication was part of the “continuum of communications” that supported the solicitor-client relationship and was therefore privileged. It held there was no basis for a finding that the lawyer usurped the tribunal’s decision making authority, also stating:

In my view, it is in the nature of legal advice that it may influence the decision-making of the client. The purpose of legal advice is normally to advise the client on the best course of action to comply with the relevant law. Advice provided to a statutory decision-maker as to what should be done in order to be legally defensible is still legal advice.

The dispute arose after the above communications were inadvertently disclosed in response to a freedom of information request made by a law firm. The receiving lawyer obtained the communications as part of a disclosure package in which government made a number of exemption claims. She believed government to have waived privileged and used the communications in a proceeding, which led government to assert its privilege claim and claim its disclosure was inadvertent. The Court held there was no waiver. It wasn’t highly critical of the receiving lawyer given these facts, but reminded lawyers of their duty to give notice when they receive communications that are apparently privileged.

British Columbia (Attorney General) v. Lee, 2017 BCCA 219 (CanLII).

BCCA issues decision on implied waiver of privilege

On November 29th, the Court of Appeal for British Columbia held that a party must voluntarily inject into the litigation legal advice it received or its understanding of the law before waiver of solicitor-client privilege can be implied. It is not enough, according to the Court, for the privilege holder’s state of mind to be relevant. The Court therefore held that a party had not waived privilege over legal advice obtained that related to a misrepresentation by another that it pleaded it had reasonably relied upon.

Soprema Inc. v. Wolrige Mahon LLP, 2016 BCCA 471 (CanLII).

SCC issues decision lending weight to litigation privilege

On Friday, the Supreme Court of Canada held that a legislative provision cannot abrogate litigation privilege unless it does so with clear, explicit and unequivocal language.

This principle was established for solicitor-client privilege by the Court in its Blood Tribe decision of 2008. It now extends to litigation privilege.

The Court also used Friday’s decision to establish litigation privilege as a “fundamental principle of the administration of justice.” It affirmed:

litigation privilege is a class privilege, entailing a presumption of immunity from disclosure once the conditions for its application have been met;
litigation privilege is only subject to clearly defined exceptions and not to a case-by-case balancing exercise; and
litigation privilege can be asserted against third parties, including third parties who have a duty of confidentiality.

Litigation privilege retains its status as a kind of junior privilege to the almighty solicitor-client privilege. According to the Court, however, litigation privilege is an important, class privilege that behaves like a class privilege. Arguments that litigation privilege must give way to the truth seeking function because of the circumstances will now ordinarily fail.

Lizotte v. Aviva Insurance Company of Canada, 2016 SCC 52 (CanLII).

SCC deals blow to privacy commissioner powers – privilege reigns supreme

Yesterday the Supreme Court of Canada issued a decision in which it held that the Information and Privacy Commissioner of Alberta does not have the power to compel the production of documents over which solicitor-client privilege is claimed in conducting an access inquiry under Alberta’s public sector access and privacy statute.

The case – which arose out of an access request made to the University of Calgary – is a sequel to the 2008 Blood Tribe Department of Health case in which the Supreme Court of Canada made a similar finding regarding the Office of the Privacy Commissioner of Canada’s powers under the Personal Information Protection and Electronic Documents Act. Blood Tribe established that solicitor-client privilege cannot be abrogated by statutory language that is any less than “clear, explicit and unequivocal.” PIPEDA, however, is a unique statute. It establishes the OPC as an ombudsperson and not in adjudicator, and the power to produce that the OPC relied upon in Blood Tribe was drafted in the most general terms. Accordingly, Blood Tribe left a question about the powers of other privacy commissioners under more traditional statutes.

That question is now answered.

The Alberta Freedom of Information and Protection of Privacy Act gives the Alberta Commissioner the power to order production despite “any privilege of the law of evidence.” This phrase appears in a number of other public sector access and privacy statutes as does the similar phrase “any privilege under the law of evidence.” Ten privacy and access authorities therefore intervened in the University of Calgary case to argue in support of their mandates.

Nonetheless, a five judge majority held that the language of Alberta FIPPA is not clear enough to override solicitor-client privilege. The majority took pains to root its analysis in statutory interpretation principles, but its finding is best understood as reflecting a near absolute dedication to the supremacy of solicitor-client privilege. The majority also viewed the Alberta Commissioner as something less than an impartial adjudicator, alluding to the tradition by which information commissioners often act as parties in reviews of their own orders.

We must be careful in drawing broad conclusions about a finding under a particular access and privacy statute, but this decision will have a ripple effect. Commissioners across Canada may adjust their protocols for dealing with solicitor-client privilege claims and may lobby for statutory amendments. University of Calgary is a good news decision for institutions given the burden of arguing solicitor-client privilege claims on a record-by-record basis.

Alberta (Information and Privacy Commissioner) v. University of Calgary, 2016 SCC 53 (CanLII).

Ont CA addresses inadvertent disclosures and privilege waiver

On July 15th, the Court of Appeal for Ontario said the following about when an inadvertent disclosure of a solicitor-client communication will result in the waiver of privilege:

Inadvertent disclosure does not necessarily mean that privilege has been waived. While waiver of solicitor-client privilege can be express or implied, whether privilege has been waived by inadvertent disclosure is a fact-specific inquiry, which may include consideration of the following factors:

The way in which the documents came to be released;

Whether there was a prompt attempt to retrieve the documents after the disclosure was discovered;

The timing of the discovery of the disclosure;

The timing of the application;

The number and nature of the third parties who have become aware of the documents;

Whether maintenance of the privilege will create an actual or perceived unfairness to the opposing party; and

The impact on the fairness, both actual or perceived, of the processes of the court.

See Airst v. Airst (1998), 1998 CanLII 14647 (ON SC), 37 O.R. (3d) 654 (C.J. (Gen. Div.)), at pp. 659-60; and Chapelstone Developments Inc. v. Canada, 2005 NBCA 96 (CanLII), 191 C.C.C. (3d) 152, at para. 55, leave to appeal to SCC refused, [2005] S.C.C.A. No. 38.

In the circumstances, the Court held that a party had not inadvertently waived privilege. The disclosure, however, was not without a consequence. The Court said, “This is not a case for costs, given that the issue arose as a result of the moving party’s own counsel’s error.”

R v Ward, 2016 ONCA 568 (CanLII).

Lawyer’s communications with witnesses to harassment privileged, privileged waived

In late June of last year, Arbitrator Moore held that communications between a lawyer retained to investigate a harassment complaint and various bargaining unit members were subject to solicitor-client privilege, but that the employer waived privilege by relying on the investigator’s conclusions in its discipline letter.

The employer used a very strong retainer letter that clearly established the investigator’s mandate was to gather facts and evidence for the purpose of providing legal advice. The letter (admitted into evidence by the Union without challenge) was sufficient to establish that the sought-after communications were privileged. Significantly, Arbitrator Moore held that communications with unionized employees undertaken for the purpose of providing legal advice can still be privileged communications:

Thus, I have not been referred to any authority that supports the proposition that employees, by virtue of being unionized, are to be regarded as third parties. While the legal rights of unionized employees are certainly impacted by the exclusive representational rights accorded to unions by statute, and may be further altered by collective agreement provisions, the employees are, in my view, still fundamentally employees of the employer.Accordingly, I do not find the fact that the employees are unionized to be a relevant consideration. It does not alter my conclusion that they are not third parties. The communications between the lawyer and the employees, therefore, took place within the relationship between the solicitor and the client and fall within the scope of the privilege.

Arbitrator Moore also rejected a very bold argument from the union that arbitrators should apply a distinct concept of solicitor-client privilege that provides “practical labour relations results for the participants.” Arbitrator Moore reasoned that the license given to labour arbitrators was not so broad “as to abrogate a principle as fundamental and protected as solicitor-client privilege.”

Although the employer established solicitor-client privilege and did not seek to rely on the investigator’s report at arbitration, Arbitrator Moore held that it waived privilege by relying on the investigator’s conclusion in its disciplinary letter. The letter read as follows:

The investigator concluded that your conduct towards the complainant violated Metro Vancouver’s Workplace Harassment Prevention Policy and directly contributed to a detrimental work environment for the complainant while he was employed by Metro Vancouver. Specifically, the investigator found that you were responsible for creating a harassing and discriminatory posting about the complainant and placing it in the Coquitlam guard house. In addition, the investigator found that you made discriminatory and harassing statements about the complainant in the work place. The investigator also concluded that you were not fully forthcoming with him during the investigation process. We accept the investigators [sic] findings and conclusions regarding your conduct. We conclude that your behaviour has been both discriminatory towards the complainant and has also violated Metro Vancouver’s expectations of appropriate employee behaviour.

As effective as the employer’s retainer letter was at establishing privilege, the employer’s discipline letter was a clear invitation to a waiver finding. This employer’s efforts nonetheless leaves other employers with a good road map for investigating sensitive internal matters under the protection of solicitor-client privilege. The retainer letter used by the employer is included in the award. It is a good model.

Vancouver (Regional District) v Greater Vancouver Regional District Employees’ Union, 2015 CanLII 87692 (BC LA).

Party defending against claim based on prior settlement does not waive settlement privilege

On September 30th, the Divisional Court held that a party defending against claim based on prior settlement does not waive settlement privilege. The Court reasoned as follows:

Consistent with such notions of fairness, we are satisfied that the LCBO has not waived settlement privilege in this case. The LCBO claims that Magnotta’s current actions advance the same claims as the prior settled proceedings, and we express no view on that assertion. However, the LCBO should, as a matter of fairness, be able to raise the settlement in its defence and in support of its proposed motion, without automatically losing the benefit of settlement privilege. In particular, the LCBO should be able to rely on the Minutes of Settlement for this purpose.

The defendant obtained a sealing order based on the public interest in encouraging parties to settle their disputes.

Magnotta Winery Corp v Ontario (Alcohol and Gaming Commission), 2015 ONSC 6234 (CanLII).