Alberta Court of Appeal Closely Examines Employer's Privilege Claims

The Alberta Court of Appeal recently released its decision in Alberta v. Suncor Energy Inc., 2017 ABCA 221.  The court upheld the importance of lawyer-client and litigation privileges, holding that they play a "central role" in the Canadian justice system,.  However, where an employee had been fatally injured, the court took a closer look at the factual basis for the employer's claims of privilege over documents that formed part of its investigation into the death. 

 

On April 20, 2014, an employee of Suncor Energy Inc. (“Suncor”) was fatally injured at a worksite near Fort McMurray, Alberta.  The Alberta Occupational Health and Safety (“OHS”) officers issued a stop-work order that day.  Immediately after the accident, anticipating litigation, Suncor began an internal investigation and threw a privilege blanket over all information relating to the investigation.  Legal counsel for Suncor directed the investigation team to segregate all documents and to endorse all material as “privileged and confidential”. 

 

The Suncor investigation team interviewed witnesses, recorded statements and collected photographs.  On May 5, 2014, OHS issued a demand under relevant section of the Alberta Occupational Health and Safety Act (the “Act”) for Suncor to provide copies of the witness statements, as well as employees’ names and contact information.  Suncor replied and provided the names and contact information of employees but asserted privilege over the witness statements collected by its investigation team.   Later, nearly a year after Suncor had provided OHS with a copy of its report on the accident, OHS issued another demand for information and copies of witness statements, notes, records, photos and other documents collected by Suncor.   Suncor claimed privilege over certain documents and information.  OHS issued an administrative penalty against Suncor.

 

The province of Albert filed an originating application seeking an order that Suncor provide the refused materials and allow OHS to interview Suncor’s internal investigators or at least provide further particulars about the claims of privilege.  At the return of the application, the judge held that the dominant purpose of Suncor’s internal investigation was in contemplation of litigation and upheld its claim for privilege on that basis.  The judge ordered Suncor to meet with a referee who would assess the claims of privilege and provide recommendations to the court. 

 

Alberta appealed that decision to the Alberta Court of Appeal. 

 

The Alberta Court of Appeal concluded that the application judge had erred in finding that the dominant purpose of Suncor’s investigation was in contemplation of litigation so as to clothe all material “created and/or collected” during the investigation with legal privilege.  However, it also held that the judge had not erred in invoking the referee process under the Alberta Rules of Court. 

The Court of Appeal held that the relevant sections of the Act did not preclude claims of privilege.  After the application judge's decision was issued, the Supreme Court of Canada clarified the law pertaining to lawyer-client privilege and litigation privilege in Lizotte v. Aviva Insurance Company of Canada and in Albert (Information and Privacy Commission) v. University of Calgary.   Those decisions confirmed the central role of legal privilege in the justice system as well as the legal and policy reasons behind why privilege must be protected.  The Supreme Court held that both litigation privilege and lawyer-client privilege “cannot be abrogated by inference and that clear, explicit and unequivocal language is required in order to lift it”.

 

Lawyer-client privilege attaches to confidential communications between a client and a legal advisor that are connected to giving or seeking legal advice.  The communication does not have to be in contemplation of litigation and the privilege is of permanent duration. 

 

Litigation privilege attaches to documents created for the dominant purpose of litigation.  This includes any document created for the dominant purpose of preparing for related litigation that “remains pending or may reasonably be apprehended”.  The object of this inquiry is the purpose for which the document was created or came into existence as distinct from the purpose for which it may have been collected or put to use.   

 

Accordingly, the Court of Appeal held that if legal privilege does not cover particular records or information, and the requirements of the Act apply to those records or information, the question of whether the Act operates to override any aspect of privilege disappears.  Once the procedure for assessing the contested materials is complete, records or information sifted out of the scope of privilege will be subject to consideration under the correct legal interpretation of the Act.

 

In this case, the appeal judges found that the application judge had erred in finding that the dominant purpose of the investigation was in contemplation of litigation and that Suncor created and/or collected documents and material with the dominant purpose that they would assist in any litigation.   It held that a referee appointed under the Alberta Rules of Court must focus on the dominant purpose for creating each document as opposed to the purpose for its collection. 

 

Suncor could not simply by having legal counsel declare that an investigation had been commenced, throw a blanket over all materials “created and/or collected during the internal investigation” so as to clothe them with lawyer-client or litigation privilege.  The Court of Appeal held that where a workplace accident has occurred and the employer has statutory duties under the Act and simultaneously undertakes an internal investigation claiming legal privilege over all materials derived as part of that investigation, an inquiry is properly directed to a referee under the Alberta Rules of Court to determine the dominant purpose for the creation of each document.

Regards,

Blair

 

SCC - Litigation Privilege and Solicitor-Client Privilege Are Substantive Rights

The Supreme Court of Canada released two decisions last week dealing with the issue of privilege:  (1)  Lizotte v. Aviva Insurance Company of Canada 2016 SCC 52 which dealt with the issue of litigation privilege; and (2)  Alberta (Information and Privacy Commissioner) v. University of Calgary 2016 SCC 53 which dealt with the issue of solicitor-client privilege. 

 

In both cases, the court clearly emphasized the importance of both privileges as “substantive rights that are fundamental to the proper functioning of our legal system”.

 

In the Lizotte case, in the course of an inquiry into a claims adjustor, the assistant syndic of the Chambre de l’assurance de dommages (the "syndic”) asked an insurer to send her a complete copy of its claim file with respect to one of its insured.  The syndic based her request on section 337 of the Act respecting the distribution of financial products and services (“Act”).  In response, the insurer produced some documents but withheld others alleging that they were protected by either solicitor-client privilege or litigation privilege.

 

At a hearing, the syndic conceded that solicitor-client privilege could be asserted against her and therefore the issue before the court was limited to litigation privilege.  The Superior Court of Quebec concluded that litigation privilege cannot be abrogated absent an express provision and that the provision in the Act was not "express" in that sense.

 

The syndic’s appeal was dismissed by the Quebec Court of Appeal and further appeal to the Supreme Court of Canada was dismissed.  In an unanimous decision, the court held that litigation privilege is a common law rule that gives rise to an immunity from disclosure for documents and communications whose dominant purpose is preparation for litigation.  Litigation privilege differs from solicitor-client privilege in that litigation privilege is to ensure the efficacy of the adversarial process .  The purpose of solicitor-client privilege is to protect a relationship.  Solicitor-client privilege is permanent whereas litigation privilege is temporary and lapses when the litigation ends.  In addition, litigation privilege applies to unrepresented parties and to non-confidential documents.  

 

However, the court held that litigation privilege is a class privilege and gives rise to a presumption of inadmissibility for a class of communications – namely those whose dominant purpose is preparation for litigation.  Exceptions to litigation privilege include those relating to public safety, to the innocence of the accused and to criminal communications.  However, because it is a class privilege it has nothing to do with balancing competing interests on a case by case basis.   

 

In this case, none of the exceptions applied.  The court held that there is a robust line of authority according to which a party should not be denied the right to claim litigation privilege without clear and explicit legislative language to that effect.  Litigation privilege therefore cannot be abrogated by inference and the Act did not apply to do so. 

 

In the second case, in the context of a constructive dismissal claim, a delegate of the Information and Privacy Commissioner of Alberta ordered the production of records over which the University of Calgary had claimed solicitor-client privilege.  The delegate was acting in accordance with the Office of the Commissioner’s solicitor-client privilege adjudication protocol and issued a notice to produce the records.  Under section 56(3) of the Freedom of Information and Protection of Privacy Act (“Privacy Act”), a public body was required to produce required records to the Commissioner “despite…any privilege of the law of evidence”.  The University sought judicial review of the decision which upheld the Commissioner’s decision but on appeal to the Alberta Court of Appeal, it was found that “any privilege of the law of evidence” as used in the Privacy Act did not refer to solicitor-client privilege.  

 

The Supreme Court of Canada dismissed the appeal in three separate, partially concurring reasons.  In the first set of reasons written by Justice Côté (Justices Moldaver, Karakatsanis, Wagner and Gascon concurring), the court held that whether the relevant section of the Privacy Act allows a review of documents over which solicitor-client privilege is claimed is a question of central importance to the legal system as a whole and outside the Commissioner’s specialized area of expertise.  Therefore, the applicable standard of review was correctness for both the decision that the Commission had the authority to require production of the records over which solicitor-client privilege was asserted and for the decision to issue the notice to produce the records. 

 

The majority held that the phrase “any privilege of the law of evidence” does not require a public body to produce to the Commissioner documents over which the solicitor-client privilege is claimed.  Solicitor-client privilege is no longer merely a privilege of the law of evidence but a substantive right that is fundamental to the proper functioning of our legal system.

 

In separate concurring reasons Justice Cromwell held that the grammatical and ordinary meaning of the words “any privilege of the law of evidence” includes solicitor-client privilege.  Solicitor-client privilege is both an evidentiary privilege and a substantive principle and it was the evidentiary privilege that was at issue here. 

 

He held that in this case even though the Commissioner had the authority to compel production for review of records over which solicitor-client privilege was asserted and assuming, without deciding, that the correctness standard of review applied, she made a reviewable error to order production in the face of the evidence submitted in relation to the claim of privilege.  The University’s claim of privilege complied with the requirements of Alberta civil litigation practice at the time, and it was a reviewable error for the Commissioner’s delegate to impose a more onerous standard on the University in relation to its assertion of privilege than that applicable in civil litigation before the courts.

 

Justice Abella in further separate but concurring reasons held that that standard of review in this case should be reasonableness in accordance with the Supreme Court’s prior decisions.  However, she held that the Commissioner’s decision to order disclosure was unreasonable.  The Commissioner should have exercised her discretion in a manner that interfered with solicitor-client privilege only to the extent absolutely necessary to achieve the ends sought by her enabling legislation.  In ordering disclosure, she did not sufficiently take into account the fact that the University provided adequate justification for solicitor-client privilege particularly in light of the laws and practices applicable in the civil litigation context in Alberta. 

Regards,

Blair

Supreme Court strikes down provisions of Money Laundering Act as they apply to Lawyers

The Supreme Court of Canada decided last week in the case of Attorney General of Canada v. Federation of Law Societies of Canada 2015 SCC 7, that the government should not interfere with a lawyer’s commitment to his or her client’s cause.  In doing so, the court held that  commitment to the client’s cause, was fundamental to the solicitor-client relationship.  Lawyers across the country welcomed the decision as a victory for the public and in providing clarity to how the legal profession should deal with its clients.

 

The case involved an act cumbersomely entitled “Proceeds of Crime (Money Laundering) and Terrorist Financing Act” (“Money Laundering Act”).  Parts of the Money Laundering Act and certain regulations under the Money Laundering Act sought to require lawyers and law firms to collect confidential information about their clients that could be subject to search and seizure by the government.  Alarmed by the prospect, the Federation of Law Societies of Canada sought to a declaration from the court that such legislation was unconstitutional.  Several lawyers’ associations including The Advocates’ Society, the Canadian Bar Association and the Canadian Civil Liberties Association intervened in the case.

 

The Money Laundering Act requires financial intermediaries (including lawyers) to collect, record and retain material, including information verifying the identity of those on whose behalf lawyers pay or receive money.  It put an agency in place to oversee compliance with the legislation and allowed that agency to search for and seize material.  The Money Laundering Act imposed fines and penal consequences for non-compliance.

 

Sections of the regulations made lawyers subject to the Money Laundering Act when receiving or paying funds or giving instructions to pay funds (other than in respect of professional fees, disbursements, expenses or bail).  Other sections of the regulations imposed record-keeping requirements and yet other sections of the regulations imposed identification requirements.

 

The Federation of Law Societies commenced a constitutional challenge to the Money Laundering Act as it applied to lawyers.  The challenge was brought in British Columbia and matter made its way to the Supreme Court of Canada.

 

The majority of the court struck down the sections of the Money Laundering Act and the regulations that applied to documents in the possession of lawyers and law firms.  The majority held that those provisions had a predominately criminal law character rather than an administrative law character.  They facilitated detecting and deterring criminal offences and investigations in prosecuting criminal offences.  There were penal sanctions for non-compliance.  The provisions authorized sweeping searches of law offices which inherently risked breaching solicitor-client privilege.  The court held that the public's expectation of privacy in solicitor-client privileged communications was high regardless of the context and nothing about the regulatory context of the Money Laundering Act or the fact that a regulatory agency undertook the searches diminished that expectation.

 

In addition, the court found that the impugned provisions wrongly transferred the burden of protecting solicitor-client privilege to lawyers.  Nothing in the legislation required notice to be given to clients and clients may not even be aware that their privilege was threatened.  Unless the search was of a lawyer’s home office, nothing required prior judicial authorization.  Searches were not contingent upon proof that there were no reasonable alternatives.  The court held that the provisions allowing warrantless searches are presumptively unreasonable, examining and copying documents proceeded until privilege was asserted and approached that greatly elevated risk of a breach of privilege.

 

The search powers in the Money Laundering Act as applied to lawyers along with the inadequate protection of solicitor-client privilege constituted a very significant limitation of the right to be free of unreasonable searches and seizures. 

 

The court held that principles of fundamental justice have three characteristics:

 

1. there must be a legal principle;
2. there must be a significant societal consensus that they are fundamental to the way in which the legal system ought to operate; and
3. they must be sufficiently precise so as to yield a manageable standard against which to measure deprivations of life.

 

The court found that the lawyer’s duty of commitment to the client’s cause meets this test.  There was overwhelming evidence of a strong and wide-spread consensus concerning the fundamental importance in democratic states of protection against state interference with the lawyer’s commitment to his or her client’s cause.  That duty was fundamental to the solicitor-client relationship and how the state and the citizen interact in legal matters.  The lawyer’s duty of commitment to his or her client’s cause is essential to maintaining confidence in the integrity of the administration of justice. 

 

The Court concluded that the Money Laundering Act required lawyers to gather and retain considerably more information that the profession thought was needed for ethical and effective client representation.  This coupled with the inadequate protection of a solicitor-client privilege undermined a lawyer’s ability to comply with the duty of commitment to the client’s cause. 

Those offending sections of the legislation were unconstitutional and should be struck.  Other sections that simply authorized the making of regulations were administrative, not criminal, in nature and did not infringe the Charter of Rights and Freedoms.

Regards,

Blair