In a recent decision, the Alberta Court of Appeal concluded
that litigation privilege may be properly claimed by a target of a regulatory
investigation. In TransAlta Corporation v. The Market Surveillance
Administrator (2014 ABCA196), the court allowed an appeal
from a decision of a chambers judge of the Alberta Court of Queen’s Bench
which held that the term “solicitor-client privilege” in section 50 of the
Alberta Utilities Commission Act (“Act”) referred only to the privilege
dealing with obtaining legal advice and did not extend to litigation
privilege.
In its ruling, the court reaffirmed the
importance and protection afforded to litigation privilege claims, recognizing
that there is a need for both legal advice and protection of an associated zone
of privacy when a party is facing an investigation that could result in a
prosecution with serious consequences.
The facts of this case first arose in the 1990s, when Alberta decided to de-regulate its
electricity and natural gas industries. Alberta established an independent body, the Market Surveillance
Administrator (“MSA”) to oversee both industries.
TransAlta owned several power generation stations in
Alberta. In February of 2011, MSA received a complaint that TransAlta was
timing the maintenance shutdown of some of its power plants to occur during periods of high demand to improperly influence the price of electricity.
MSA initiated an investigation and as part of the
investigation, issued a formal request for production of documents.
TransAlta began producing documents in response to this request which continued for several months. During the course of document
production, TransAlta claimed privilege, both solicitor-client and litigation
privilege over a number of documents. MSA disputed the claim for
litigation privilege and TransAlta applied to a judge of the Court of Queen’s
Bench for an order that it had claimed privilege properly over the documents.
The issues in dispute before the chambers judge included whether litigation privilege
came within the “general rubric” of solicitor-client privilege under section 50
of the Act.
In overturning the chambers judge’s decision, the court of appeal
held that she had interpreted section 50 of the Act too narrowly in finding that
the term solicitor-client privilege did not include litigation privilege.
The court reasoned that the mere fact that the two privileges may have differences in scope and operation,
did not answer the question of interpretation. The court held that the
common law still treated litigation privilege as being an aspect of solicitor-client privilege and that the Alberta legislature would have had this
understanding in mind when it drafted the wording contained in the Act.
Further, even if “solicitor-client privilege” did not
include litigation privilege, it was still open to TransAlta to resist production
of the documents on the basis of litigation privilege because section 50 of the
Act was procedural in nature and did not exclude claims for litigation
privilege or for any other privilege recognized at common law.
Finally, the court held that if TransAlta was entitled to advance a claim for litigation
privilege, it was necessary to consider whether there could be a basis for such
a claim in the context of an investigation by the MSA. The court held
that while an investigation undertaken by the MSA will not result directly in
criminal convictions or prison, nevertheless the consequences of being found
guilty of an offence under the Act could result in millions of dollars of fines
and other penalties of a very substantial nature. Indeed, the ongoing
business of the company could be put into jeopardy. Thus, there was an
obvious need for legal advice and the zone of privacy contemplated by
litigation privilege when a party or parties are facing an investigation which
could result in the prosecution of offences with such potential
consequences.
Regards,
Blair
can be especially complex. Not only does the plaintiff have to deal with the legal system, which is slow moving in itself, the plaintiff must also deal with corporations, businesses and insurance companies; Commercial litigation each of whom has a vested interest in prolonging the commercial litigation process and ensuring, if you get paid that they pay you the lowest amount possible. It is not uncommon for those representing the interests of the defendant to intentionally stall and prolong the conclusion of a lawsuit in an effort to force the plaintiff into settle for a dollar amount less than what they deserve. Sadly, this tactic is often successful.
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