The Association of Corporate Counsel has thrown its support behind an Alberta energy company after the province's court of appeal ordered it to disclose certain witness statements and other documents to the government pursuant to an internal investigation into a fatal job site injury.
The letter was written in support of Suncor’s request for such, “understanding that this letter may be appended to Suncor’s leave for appeal to the Supreme Court of Canada.”
The case is an important one for in-house counsel, who rely on litigation privilege as well as solicitor-client privilege in conducting and relying on internal investigations on behalf of their employers, says Lorne O’Reilly, senior counsel for Dow Canada in Calgary, and president of the ACC Alberta.
“There is uncertainty now in the question of litigation privilege,” O’Reilly told Legal Feeds. “In this circumstance, there is conflicting law. We believe as in-house counsel that this is a matter of national importance.”
In the Suncor case, information sought by government occupational health and safety officers followed a workplace accident near Fort McMurray in April 2014, in which a Suncor employee died. Suncor’s legal counsel directed its investigation team to segregate any investigation documents, and to mark all those materials as privileged and confidential.
A Court of Queen’s Bench judge held that the dominant purpose of Suncor’s internal investigation was in contemplation of litigation, and therefore all material “created and/or collected” during that investigation was subject to legal privilege. The judge ordered Suncor to meet with a court-appointed referee, who would assess the claims of privilege and provide recommendations to the Court.
The Alberta Court of Appeal, however, disagreed with the chambers judge’s view that Suncor had sufficiently described its documents and the grounds for asserting privilege in its list of bundled records.
To determine whether a document is covered by litigation privilege, Alberta’s appellate court found, a court must look at the purpose for which each document was created, not the purpose for which it may have been collected or put to use. It ordered Suncor to provide the refused information to the referee, and to identify the records, information and communications it claimed as covered by litigation privilege or solicitor-client privilege.
In its letter to Osler in support of Suncor, the ACC raised three concerns. First, it said, “the Court of Appeal’s decision raises the question of whether the litigation privilege can cover ‘the entirety’ of an internal investigation file. … The Court of Appeal’s muddled holding on this point puts at risk the confidentiality of the thoughts and impressions of in-house counsel and those who assist them in preparing their companies for potential litigation.”
Second, it said, the “decision muddies the waters regarding the extent to which a company can claim litigation privilege over materials created or gathered during an internal investigation when an investigation may also be mandated by a regulatory obligation.”
And third, the “decision creates a burdensome framework for examination of litigation privilege claims by suggesting that courts must undertake a document-by-document analysis of whether the privilege applies.”
O’Reilly sees a distinction in the manner in which in-house and external counsel are treated when claiming privilege over such materials. The Alberta Court of Appeal decision “begs the question of whether this would have been an issue if external counsel had handled” the internal investigation into the fatal worksite incident,” he says. “All too often,” and notably in European jurisdictions, “certain activities by in-house counsel have come into question.”
Yet it’s the job of in-house counsel to investigate, assess and attempt to mitigate the risks of quasi-criminal charges, among others.
“When you bring in-house counsel in, we should have the ability to ascertain whether there is liability for the company, and prepare for litigation,” O’Reilly says, knowing that a claim may come, and that information gathered will be subject to privilege. Be it a potential privacy breach or an anti-corruption claim, “you want to ensure and identify what has actually happened, so the [in-house counsel’s] organization best knows, one, how to best prepare for potential liability, and two, to ensure it doesn’t happen again.”
While the regulator has an obligation and a duty to identify what took place in order to protect the public, says O’Reilly, “if you want specific reports or documents, you ask for them; you don’t short-circuit the investigation by asking for all records to be prepared.”
An internal investigation may be conducted “for any number of matters,” including in responding to a regulator, as in this case. Whether for fraud or anti-corruption or other potential charges, “you have a duty to protect your client: thorough investigation, and the ability to protect your investigation process.”