In what can be described as a unique set of circumstances, the Court of Appeal for Ontario has recently ruled on the important issue of a corporation’s right to be protected by solicitor-client privilege.
The case arose from a prosecution of Bruce Power Inc., and two management representatives, under the provisions of the Occupational Health and Safety Act. The prosecution alleged the three defendants were responsible for contravening various provisions of the Occupational Health and Safety Act involving a worker being injured at a nuclear power plant at Tiverton, Ont.
The Ministry of Labour inspector in this case obtained an internal draft investigation report that had been marked confidential. A member of the Power Workers’ Union gave a copy of the confidential document to the Ministry of Labour inspector who was investigating the incident. A case, therefore, identified two critical issues for the Court of Appeal for Ontario to address.
First, when the Crown has come into possession of a defence document protected by solicitor-client and litigation privilege, does the accused bear the burden of proving actual prejudice or will prejudice be presumed?
Secondly, in such circumstances, must the charges be stayed or is a lesser remedy appropriate?
The trial justice found that although the confidential and corporate investigation report did not contain any legal strategies, thoughts, or legal opinion, it also held it could well be used to the disadvantage and prejudice of the defendants in the prosecution. The trial justice stayed all charges as a result of the abuse of process by the Ministry of Labour in obtaining and refusing to return the document which he held was subject to solicitor-client privilege.
The justice concluded that the defendants’ fair trial rights pursuant to ss. 7 and 11 of the Charter of Rights and Freedoms were breached by reason of the prosecution’s conduct in respect of their refusal to return the report, without keeping a copy.
This decision was reversed on appeal to the Superior Court, which was then appealed to the Court of Appeal for Ontario. That court held that when the Crown comes into possession of a defence document protected by solicitor-client and litigation privilege, prejudice to the defence will be presumed. However, this presumption in law is rebuttable by evidence to the contrary. In this case, the Crown called no evidence to the contrary and the presumption of prejudice prevailed.
Regarding the second question, the Court of Appeal upheld the justice’s findings that the report clearly sets out items that could well be used to the disadvantage and prejudice of the defendants at trial. The appeal was allowed, the stay was restored, and submissions for costs against the Ministry of Labour were invited by the court.
This case is important for in-house, as well as external counsel, for at least three reasons. It confirms the long-established common-law principle upholding solicitor-client privilege; the impropriety which in-house counsel at the corporate defendant clearly identified was subject to such privilege, and the legal remedies available.
The courts will presume prejudice, and likely therefore a stay of the charges, if the Crown cannot demonstrate not only good faith in obtaining the document, but also that there is no advantage to be gained by the prosecution, or prejudice to the defendant, by the Crown’s possession of the privileged document.
In-house counsel can participate and give advice with respect to the preparation of investigation documents in any type of regulatory and criminal investigation in order to establish privilege. This must be one of the most important roles that in-house counsel can play, together with engaging external counsel to confirm solicitor-client, as well as litigation privilege attaches to the investigatory documents.
In-house counsel must be assertive, and consistent in their characterization of documents as subject to solicitor-client privilege in the face of regulatory investigators.
The Bruce Power case was favourable to the corporation and demonstrates the importance of standing up to aggressive regulators in the face of potential and actual prosecution.
This decision validates solicitor-client privilege, the protection provided to internal investigations that are intended to obtain legal advice, and secure information for potential litigation.
The case also identifies the value of in-house counsel during such investigations.
These lessons apply not only to Occupational Health and Safety Act investigations by the Ministry of Labour, but to Ministry of Environment investigations, and other regulatory authorities who, in their enthusiasm to investigate, may cross the line from a good faith investigation to a breach of the Charter.
Norm Keith is a partner in Gowling Lafleur Henderson LLP’s Toronto office and leader of the firm's national occupational health and safety group.