Raw test data disclosed over doc’s objection

On July 29th, the Supreme Court of British Columbia ordered raw test data to be produced over the objection of plaintiff’s (neuropsychologist) expert, who claimed her professional obligations restricted her from disclosing the data forming the foundation of her expert’s report to anyone but another neuropsychologist. It said:

Counsel for the applicant defendant correctly submits that there is nothing in the Code of Conduct to substantiate the apparent position of the College of Psychologists of BC that test material cannot be released except to another psychologist or psychological service provider in another jurisdiction. He is correct. That is not what the Code of Conduct states.

The Court noted that not all experts are equal in interpreting data, but held that the quality of interpretation is a matter for trial.

Smith v Rautenberg, 2013 BCSC 1347 (CanLII).

Breach of deemed undertaking does not fit within crime and fraud exception to s-c privilege

On July 16th Justice D. M. Brown of the Ontario Superior Court of Justice dismissed a motion to compel answers to three cross examination questions that were refused based on a solicitor-client privilege claim. He dismissed an argument that the evidence sought was a communication between lawyer and client in furtherance of crime or fraud because the communication was for the purpose of breaching the deemed undertaking rule. Justice Brown said:

The deemed undertaking rule is a most important one in the civil litigation process balancing, as it does, the public interest in getting at the truth in a civil action with the privacy interest of the person subject to examination for discovery and the compelled production of documents. Its importance is underlined by the fact that the undertaking is one given to the court. But the breach of the deemed undertaking does not attract any penal sanction. Although Rule 30.1 does not specify the sanctions for its breach, case law exists in which courts have stayed subsequent proceedings which used evidence in breach of the deemed undertaking rule, and other remedies may include striking pleadings or bringing a civil contempt motion.

That is to say, a breach of the deemed undertaking rule does not give rise to a cause of action against the party in breach, but the aggrieved party may seek a process-related remedy before the court in an existing action, such as the present one.
In my view, the nature of the conduct involved in any alleged breach of the deemed undertaking rule does not come anywhere close to that narrow cohort of “future crime and fraud” misconduct in respect of which communications between a client and its lawyer would not enjoy the protection of solicitor-client privilege

Brome Financial Corporation v Bank of Montreal, 2013 ONSC 4816 (CanLII).

Intrusive mobile application class action certified in Québec

On June 27, the Superior Court of Québec certified a class action about the alleged intrusive nature of free applications offered through Apple’s “App Store.”

The petitioner alleges that Apple breached various Québec statutes by failing to inform users that free applications would facilitate the collection and use of their personal information, including their “geolocation.” The petitioner also claims that individuals were harmed (a) by the loss of computing resources and (b) by being led to overpay for their Apple devices, such devices being “inextricably linked” to undesirable characteristics associated with free applications distributed through the App Store. The petitioner asked the Court to grant certification so he could prosecute Apple on on behalf of all residents in Canada who downloaded free applications from December 1, 2008 to present.

Apple attacked the action’s suitability for certification on a number of bases. Most fundamentally, it complained that the action provided for an “infinite variety of classes” – for example (and at the least), classes of individuals who were exposed to applications with different information-gathering characteristics. Nonetheless, the Court granted certification of a Québec only class. Its analysis is very forgiving, especially in addressing Apple’s (very valid) concerns about the individualized nature of a consent dispute, which the Court dismissed as follows:

In the Court’s view, all of the Respondents’ arguments regarding the consent or lack thereof, the voluntary provision of information by Class Members and other similar elements that distinguish Class Members between them can be raised by them in their defence or alternatively when dealing with the « lien de causalité ».

Hat tip to BLG and its privacy law blog for this post.

Albilia c Apple Inc, 2013 QCCS 2805 (CanLII).

Settlement approved in Canadian cyber attack suit

On June 10th, the Ontario Superior Court of Justice approved a settlement in a class action brought against Sony of Canada Ltd. and others. The action (for breach of contract) followed an April 2011 cyber attack that targeted accountholder information of approximately 4.5 million individuals enrolled in various Sony online services. The following is the Court’s summary of the settlement:

  • Class Members who had a credit balance in their PSN or SOE account at the time of the Intrusions but have not used any of their accounts shall receive cash payments for credit balances.
  • The Sony Entities will make available online game and service benefits to class members geared principally to the type of account (PSN, Qriocity, and/or SOE) held by the class member at the time of the Intrusions.
  • The settlement benefits are available through a simple process. To become entitled to benefits, Class Members need only to complete a claim form.
  • The Sony Entities will reimburse any Class Members who can demonstrate that they suffered Actual Identity Theft, as defined in the Settlement Agreement. Class Members that prove Identity Theft can submit claims for reimbursement of out-of-pocket payments (not otherwise reimbursed) for expenses that are incurred as a direct result of the Actual Identity Theft, up to a maximum of $2,500.00 per claim.
  • The Sony Entities are to pay for the costs associated with providing notice of the Settlement Agreement and the settlement approval hearing, all administration costs, as well as an agreed amount for plaintiffs’ lawyers’ fees and expenses ($265,000).

The parties sent a notice of certification and notice of motion for settlement approval to 3.5 million e-mail addresses. Fifteen percent of the e-mails were returned as undeliverable, 28 individuals opted out and nobody objected.

Justice Perell noted that the agreement was premised on the understanding that there has in fact been no improper use of personal information resulting in identity theft. He also said, “The Settlement Agreement reflects the state of the law, including possible damage awards, for breach of privacy/intrusion upon seclusion and loss/denial of service claims.”

Maksimovic v Sony of Canada Ltd, 2013 CanLII 41305 (ON SC).

ABQB finds grievance response privileged

On February 26th the Alberta Court of Queen’s Bench held that a grievance response is issued by an employer as part of the settlement process and is therefore privileged:

If these meetings are to be open in an attempt to resolve the grievance it seems clear that the discussions and documents flowing therefrom should remain confidential. The decision letter of April 30 is part of a settlement negotiation which falls within the protected category of settlement privilege and is not producible.

The Court denied production in a civil action brought by the grievor. The employer argues the subject matter of the action is within the exclusive jurisdiction of a labour arbitrator.

Thomson v University of Alberta, 2013 ABQB 128 (CanLII).

Master Glustein contextualizes privilege finding in Trillium Motor World

On June 17th, Master Glustein of the Ontario Superior Court of Justice confirmed that the finding in Trillium Motor World – that legal information (versus advice) conveyed from a firm to its client was not privileged – was driven by a unique context:

[9] Plaintiffs’ counsel sought to rely on the recent decision in Trillium Motor World Ltd. v. Cassels Brock & Blackwell LLP, 2013 CarswellOnt 3828 (“Trillium”), in which Justice Belobaba ordered that documents that disclosed “legal information” would not be subject to privilege. However, Justice Belobaba did not set out a general principle that when a client seeks advice for general legal information, rather than a particular legal situation, privilege is waived.

[10] In Trillium, an issue in the class action was whether the defendant law firm (“Cassels”) had been retained by the plaintiff dealers or whether Cassels had been retained by the Canadian Automobile Dealers Association (“CADA”). The issue before Justice Belobaba on the motion was whether CADA properly asserted privilege on documents between CADA and Cassels.

[11] Justice Belobaba distinguished between “legal advice” sought by CADA from its counsel (which would be privileged) and “legal information” obtained by CADA to understand the effect of the General Motors bailout in 2009 to better assist its dealer-members (which would not be privileged). Justice Belobaba held (Trillium, at para. 13):

Thus, if CADA sought and received advice from its counsel at CBB about its role and responsibility as a national dealer organization and its rights and duties given its mandate and jurisdiction, or sought and received advice with respect to the content of the memos it proposed to send out to its membership (to ensure they were legally accurate and did not expose CADA to legal liability), that would certainly amount to “legal advice” as described above. However, if CADA was simply asking its counsel for information about the federal bankruptcy process”or the CCAA in order to better understand the situation and thus better assist its dealer-members, that would not be legal advice as defined in the case law.

[12] Consequently, the distinction relied upon by Justice Belobaba was whether certain “legal information” was not advice to the client but rather information to better assist its members. It was in that context that Justice Belobaba distinguished between the terms “legal information” and “legal advice”, as those terms were put forward by Cassels and CADA.

[13] In that context, the term “legal information” (as defined by CADA and Cassels) consisted of “providing answers regarding the law generally, the options available, and the relevant legal procedures that might pertain” and “how it would affect the dealers”. The term “legal advice” was defined as “advice that is given with respect to the client’s legal rights and duties and is given on the understanding that it may well be followed” (Trillium, at paras. 11-12).

[14] In other words, Justice Belobaba did not reduce the scope of solicitor-client privilege to allow disclosure of general legal information sought by a client since he included in the term “legal advice” any advice “with respect to the client’s legal rights and duties and [which] is given on the understanding that it may well be followed” or any advice “from its counsel at CBB about its role and responsibility as a national dealer organization and its rights and duties given its mandate and jurisdiction, or sought and received advice with respect to the content of the memos it proposed to send out to its membership (to ensure they were legally accurate and did not expose CADA to legal liability” (Trillium, at paras. 12-13).

[15] Consequently, in Trillium, legal advice would include both general legal advice to understand rights and particular advice on a particular problem. The disclosure of “legal information” was not privileged in Trillium because it had not been obtained to advise CADA but was general information to be transmitted to its dealers.

[16] If Trillium were read to reduce the scope of solicitor-client privilege to allow production of any general legal information provided by counsel for the purpose of advising a client as to its rights or obligations, it would be a dramatic change to the sanctity of solicitor and client privilege protected under the principles in Guelph discussed above.

Master Glustein also reviews a number of other principles that govern solicitor-client privilege.

578115 Ontario Inc o/a McKee’s Carpet Zone v Sears Canada Inc, 2013 ONSC 4135 (CanLII).

Five principles from the SCC’s settlement privilege decision

Here are five principles endorsed by the Supreme Court of Canada in its June 21st settlement privilege decision (quoted loosely from the decision itself):

  • Settlement privilege is a class privilege associated with a prima facie presumption of inadmissibility; exceptions will be found “when the justice of the case requires it.”
  • Settlement privilege extends beyond documents and communications expressly designated to be “without prejudice”; what matters instead is the intent of the parties to settle the action.
  • Settlement privilege protects documents and communications from production to other parties to the negotiation and to strangers, and extends as well to admissibility, and whether or not a settlement is reached.
  • Settlement privilege extends to the negotiated settlement itself.
  • To come within an exception to settlement privilege, a party must show that, on balance, “a competing public interest outweighs the public interest in encouraging settlement.”

The Court held that, in the circumstances before it, there was an insufficient interest favouring the disclosure of settlement amounts to two non-settling defendants in a multi-party dispute.

Sable Offshore Energy Inc v Ameron International Corp, 2013 SCC 37 (CanLII).

SCC alcohol testing decision invites peace in the valley by giving a boost to arbitral precedent

The Supreme Court of Canada’s June 14th decision in Irving Oil represents a remarkable elevation of arbitral precedent to near binding law, contributing clarity on an issue that has been heavily litigated by employers and unions for years.

The ratio, at paragraph 31, is that an employer with a safety-sensitive workplace needs proof of “enhanced safety risks” (such as a workplace substance abuse problem) to implement universal random substance testing. Although the judgment was split, both majority and minority agree that this is the evidentiary burden endorsed in “remarkably consistent arbitral jurisprudence.”

The Supreme Court of Canada wanted to deliver “peace in the valley” without causing too much upset in its established deference-favouring principles of judicial review.

Upset is exactly what the Court of Appeal of New Brunswick had created by issuing an unprecedented standard of review decision in its handling of the case. The lower court applied the correctness standard of review because labour arbitrators had not been able to reach a consensus. Justice Robertson said:

In the present case, it is evident that the arbitral jurisprudence is not consistent when it comes to providing an answer to the central question raised on this appeal. Hence, it falls on this Court to provide a definitive answer so far as New Brunswick is concerned.

In response, the Supreme Court of Canada held that the reasonableness standard applies to the interpretation of a collective agreement based on its established jurisprudence. It did not mention Justice Robertson’s novel approach to addressing an inconsistency in arbitral jurisprudence nor did it explain how it reached the opposite conclusion about the existence of arbitral consensus. Did it find the jurisprudence to be consistent as step one in its aim to promote clarity in the law?

Step two involves the Court’s treatment of arbitral precedent in assessing the reasonableness of Arbitrator Veniot’s decision. The Court unanimously held that the reasonableness of a labour arbitrator’s decision will be judged in light of established arbitral consensus.The majority felt that Arbitrator Veniot’s decision was consistent with the consensus, which supported its reasonableness. The minority felt that Arbitrator Veniot’s decision was inconsistent with the consensus, an error given he did not provide a rationale for his departure: “In the absence of a reasonable explanation for its novel test, the board must be taken as having misapplied the existing test, which in the circumstances of this case rendered its decision unreasonable.” This treatment of arbitral precedent as so central is novel and significant, though both the majority and minority specified that precedent was particularly important “in this case,” presumably given the deemed “remarkably consistent arbitral jurisprudence.”

Arbitrators are technically free to reason their way around the ratio of Irving Oil, but why would they? For practical purposes, the Court has delivered near binding precedent.

Of course, the non-unionized employees are much more vulnerable, many protected only by anti-discrimination legislation and a theory for finding discrimination espoused in the Court of Appeal for Ontario’s Entrop decision that is becoming less and less consistent with the SCC-defined meaning of discrimination. In light of the Supreme Court of Canada’s gymnastics in Irving Oil, is there any doubt that the courts will find a path, however tortured, that leaves non-union employees with the same protection?

Communications, Energy and Paperworkers Union of Canada, Local 30 v Irving Pulp & Paper, Ltd, 2013 SCC 34 (CanLII).