Qualified privilege: the defence when a wrong thing is said

In Canadian defamation law, saying the wrong thing in the right place can save you. Saying the right thing in the wrong place, though, can cost you dearly. That is the double-edged reality of a legal defence called qualified privilege that protects certain communications from defamation liability, but only up to a point.

What is qualified privilege in defamation law?

Qualified privilege is a defence to a defamation claim. It protects a person who makes a false and damaging statement from liability, but only when two conditions are met at the same time:

• the person making the statement had a legal, social, or moral duty or interest to make it; and
• the person receiving it had a corresponding duty or interest to receive it.

That reciprocity, as the Supreme Court of Canada confirmed in Hill v. Church of Scientology of Toronto, [1995] 2 SCR 1130, is the foundation of the defence. Without it, there is no privilege to speak of.

Qualified privilege vs. Absolute privilege

The defence is called qualified, and not absolute, because it comes with conditions. Absolute privilege, which applies to court proceedings and parliamentary debates, cannot be defeated regardless of intent. However, this privilege can be lost.

Applicability of qualified privilege

Common law recognises a wide range of occasions where this privilege applies, including:

• Kanak v. Riggin, 2017 ONSC 2837: employment references and performance reviews shared with prospective employers
• Cusson v. Quan, 2007 ONCA 771: complaints to police and law enforcement, confirmed as “classic examples of occasions of qualified privilege”
• Bent v. Platnick, 2020 SCC 23: communications between members of a professional association with a shared interest; the occasion could give rise to this privilege, though the court found the scope was exceeded on the facts of that case
• Hung v. Gardiner, 2003 BCCA 257: complaints to professional regulatory bodies, which, depending on whether the body is quasi-judicial in nature, may even attract absolute privilege

The test for whether this privilege attaches to a given occasion is objective, as the Supreme Court of Canada established in Halls v. Mitchell, [1928] SCR 125. What the defendant personally believed is not the deciding factor. The question is whether a reasonable person in their position would have felt compelled by a duty to make the communication.

That standard was applied directly in the personal injury context in B.(P.) v. V.E.(R.), 2007 BCSC 1568, where it was confirmed that a defendant’s mere belief that they were fulfilling a duty to communicate does not, on its own, create that duty.

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When does qualified privilege fail in court?

Even when qualified privilege applies to an occasion, it can still be defeated in two distinct ways.

When the scope is exceeded

The privilege only extends as far as the duty or interest that created it. Statements that go beyond what the occasion requires, whether in content, language, or audience, fall outside the protection.

In Bent, the Supreme Court of Canada found that a plaintiff-side injury lawyer who named a specific physician in an email to a professional association listserv had exceeded the scope of the privilege. The warning about altered medical reports could have been made without identifying the doctor by name, and the court found sufficient basis to conclude that doing so may have exceeded the scope of the privilege.

How far the statement travelled

Courts will also look at how far a communication travelled. In Gates v. The Standard, 2004 CanLII 34365 (ON SC), the court drew a firm line between information that is merely “of interest” to a general newspaper readership and information that is genuinely “in the public interest.”

The court held that publishing a settled workplace grievance to a wide newspaper audience did not satisfy the latter standard, particularly when the facts communicated were untrue and the damage to the plaintiffs’ reputations was severe.

When there’s malice

The second and more common route to defeating qualified privilege is proving malice. In Canadian defamation law, malice is not limited to personal spite or hatred. The court held in Hill that malice includes:

• any indirect motive or ulterior purpose that conflicts with the legitimate reason the privilege exists;
• knowingly making a false statement; and
• reckless disregard for whether the statement is true

In Marcellin v. London (Police Services Board), 2024 ONCA 468, the Ontario Court of Appeal found that a motion judge had failed to properly consider whether a police complaint was motivated by malice, given its timing and the surrounding circumstances.

The court found the motion judge’s analysis incomplete, holding that evidence of an improper motive, even without direct proof of ill will, can be sufficient to meet the “grounds to believe” standard that qualified privilege would not succeed.

Malice is assessed defendant by defendant

Malice is also assessed defendant by defendant. In Gates, the court found that the complainant’s husband had acted with malice, given that anger and a desire for punishment were his dominant motives, while the complainant herself had not. She had simply wanted her side told accurately, with no ill will toward the plaintiffs. Had qualified privilege applied to her communications, it would not have been defeated.

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Do insurer reports qualify for defamation protection?

Although insurer reports may qualify for defamation protection, the margins are tight.

Insurer investigation reports and independent medical examination (IME) reports are prepared and shared within the claims handling process. Adjusters, litigation counsel, and case managers all have a legitimate, corresponding interest in receiving them. On that basis, qualified privilege can apply.

The problem is that the protection only holds when the communication stays within those proper boundaries. Courts have identified several specific ways the privilege collapses in institutional contexts:

The over-disclosure problem

Sharing investigation findings more broadly than the occasion requires strips the privilege from statements that would otherwise be protected. Examples would be when findings are shared with staff who have no role in the file, with external parties before the investigation is complete, or with anyone outside the claims handling chain.

The written record problem

Reports that characterise a claimant’s conduct in conclusory or editorial terms create defamation exposure that carefully drafted language would avoid. It may include calling someone “dishonest” or “fraudulent” where the evidence would only support a more factual description. As such, the words used matter as much as the occasion.

The scope problem

A medical assessor who goes beyond the clinical question asked risks stepping outside the legitimate purpose of the report. In Cable Assembly Systems Ltd. et al. v. Ben Barnes et al., 2019 ONSC 97, the court found that a city manager who used a supplier meeting to repeatedly attack a contractor’s workmanship, despite the meeting having a different purpose, was not acting within the scope of any recognised privilege. The defence failed entirely, simply because his statements were not germane or reasonably appropriate to the occasion, and he had an ulterior motive.

How does bad faith affect a qualified privilege defence?

Qualified privilege and the duty of honest performance in insurance claims handling are not separate issues, as they overlap in ways that carry real strategic weight.

The duty of honest performance, established in Bhasin v. Hrynew, 2014 SCC 71, requires all contracting parties to perform their obligations honestly and in good faith. The court has separately confirmed that this principle applies to insurers handling claims.

Badges of bad faith of insurers

An insurer that does any of the following may be acting in bad faith and, simultaneously, with the kind of improper purpose that defeats qualified privilege:

• commissions a medical assessment primarily to manufacture a basis for denial rather than obtain a genuine opinion;
• circulates an investigation report containing statements it knows, or should know, to be false; or
• uses the claims process as a vehicle to pressure or discredit a claimant

The malice standard in defamation law captures exactly this scenario. As confirmed in Marcellin, malice includes “any indirect motive or ulterior purpose that conflicts with the sense of duty or mutual interest the privileged occasion created.” An insurer whose dominant motive in producing and sharing a report is to defeat a valid claim, instead of fairly assessing it, satisfies that standard.

That means the same evidence can support both a defamation claim (qualified privilege defeated by malice) and a bad faith insurance claim. These can be pled together, and the proof for one often supports the other.

Qualified privilege: a protection with real limits

Qualified privilege is a legitimate and well-established defence, but it is not a blanket licence to say damaging things about claimants and walk away clean. The privilege protects honest communications made for the right reasons, to the right people, within the right scope. However, when the audience is too wide, the language too loaded, or the motive something other than a genuine duty, the protection disappears.

Head over to Canadian Lawyer’s Personal Injury page for more articles dedicated to lawyers in this practice area, including topics on qualified privilege and other defences.