Why we should not take solicitor-client privilege for granted

A recent Superior Court of Justice decision highlights its possible vulnerability

Daniel Waldman

Solicitor-client privilege is a fundamental part of our legal system. It protects public confidence in obtaining legal advice and our clients can generally assume that, when they tell us something in the context of our legal relationship, the communication will not end up before a court (or anywhere else for that matter). Naturally, given its sacred nature, privilege is very hard to get around, and for good reason.

However, in a recent controversial decision, privilege was voided because a witness acknowledged during an examination that he consulted with his lawyer to seek advice on a contract. This reasoning could result in a frightening slippery slope, where a witness acknowledging that they sought their lawyer’s advice regarding a contract could become fair game in a court proceeding.

This decision could mean that, in order to ensure that privileged information remains under lock and key, two things must be kept in mind: (1) lawyers should be cautious of overstepping their roles, because if we inadvertently take on different functions, our advice may be compromised; and (2) we should caution our clients about the potential perils of discussing communications with counsel during an examination.

In Caruk-Hall Construction Inc. v. Maciel, 2021 ONSC 2350, the plaintiff brought a motion to compel one of the defendants to answer questions which were refused at his examination for discovery. The decision focused on refusals regarding legal work obtained by the defendants regarding a construction contract between the parties. The questions were refused on the basis that the information sought was subject to privilege, as it pertained to legal advice related to payments after the agreement was executed.

When questioned about the payment advice, one of the defendants stated that he checked with his lawyer if he had questions about payments. During his examination, the defendant stated that “if I felt that [the plaintiff] was asking for payment outside of what was in the contract, before making payment, did I want to check with my counsel, yes.” Also, when asked about whether he continued to obtain his lawyer’s advice about the implementation of the agreement concerning the payments, the defendant said, “if I had a question about the amending agreement, or the construction agreement, I would ask him, yes.”

Master Wiebe held that the defendants were implicitly stating that they received legal advice about questionable payments and about whether the payments or non-payments were, as a result, proper. It was noted that this is the type of work that would normally be performed by a payment certifier, and it would be material and not privileged. As a result, the payment advice was deemed not to be privileged and the defendants were ordered to produce all documentation and information related to it.

This decision is concerning for several reasons. For instance, the defendant merely admitted that he checked with his lawyer before a payment was made, but he did not admit that he outright relied on that advice to decide to accept or refuse payment. Nonetheless, this was still deemed to be a waiver of privilege.

Also, there was nothing to indicate that the defendants’ lawyer intended to act as a payment certifier, which is a specialized role that is typically assumed by an architect or an engineer. Although the lawyer was giving advice related to the agreement, the contract itself did not name the lawyer as a payment certifier and there was no evidence that the defendants intended to rely on their lawyer in this capacity.

But the most daunting aspect of this decision is the fact the privilege seems to have been waived solely because the witness admitted that he sought his lawyer’s advice before deciding about a contract. There is nothing unusual about a client stating that they consulted with their lawyer before making such decisions, and it is also not unusual for a witness to acknowledge this during an examination. Witnesses should therefore be comfortable stating this fact without worrying that privilege will be compromised.

The implications of this decision are yet to be seen. But for now, it serves as a grim warning that solicitor-client privilege may be more fragile than we assume it to be.

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