Author: Candice Chan-Glasgow, January 26, 2017

The Supreme Court of Canada recently reviewed the characteristics of litigation privilege in Lizotte v Aviva Insurance Company of Canada [1]. 

In this case, an Aviva claims adjuster, M.B., investigated a fire that damaged the residence of a person insured by Aviva.  M.B. was later accused of making errors in managing the file.  The syndic of the Chambre de l’assurance de dommages opened an investigation with respect to M.B. and requested Aviva’s entire file relating to the insured person’s claim.  The request was based on s. 337 of the Act respecting the distribution of financial products and services (“ADFPS”), which says that insurers “must, at the request of a syndic, forward any required documentation or information concerning the activities of a representative”.

 

Aviva produced a number of documents, but withheld some of the relevant documents on the basis of solicitor-client privilege or litigation privilege.  At the time the document request was made, and when litigation privilege was asserted, the insured person’s claim against Aviva was still ongoing.  In October 2013, approximately four months after Aviva and the insured person reached a settlement, Aviva sent the syndic the entire file regarding the insured person’s claim.  Although the documentary dispute was effectively settled at this time, the syndic proceeded with her motion for a declaratory judgment.

 

At the motion, the syndic conceded that solicitor-client privilege could be asserted against her.  The issue in the appeal was limited to whether Aviva properly asserted litigation privilege over its documents on January 24, 2011 (while the insured person’s action against Aviva was still ongoing).

 

In reviewing the characteristics of litigation privilege The Court cited its decision in Blank v Canada (Minister of Justice) [2].  It noted that a distinction between solicitor-client privilege and litigation privilege is that solicitor-client privilege is permanent, while litigation privilege is temporary.[3]  According to Blank, this distinction is due to the different policy considerations driving each type of privilege.

 

The purpose of solicitor-client privilege is to allow individuals to confide in their solicitors knowing that the communications will be protected from disclosure.  This makes it possible for an individual to obtain proper and candid legal advice. The purpose of litigation privilege is to facilitate the adversarial process by creating “a “zone of privacy” in relation to pending or apprehended litigation.”[4]  Once the litigation is terminated, litigation privilege loses its purpose, and its effect, except where “related proceedings” remain pending or reasonably apprehended. [5]  Related litigation includes “separate proceedings that involve the same or related parties and arise from the same or a related cause of action”, as well as proceedings “that raise issues common to the initial action and share its essential purpose”.[6]

 

In Lizotte, the Court found that “if the document is created for the “dominant purpose of litigation” … and the litigation in question or related litigation is pending “or may reasonably be apprehended”, there is a prima facie presumption of inadmissibility”.[7]  Absent specific exceptions to litigation privilege (such as evidence of abuse of process or similar blameworthy conduct), litigation privilege can be asserted against anyone, including third party administrative or criminal investigators.  A statutory provision that merely refers to the production of “any document” does not abrogate litigation privilege because it is not sufficiently clear, explicit and unequivocal.[8]

 

In Lizotte, the documents related to pending litigation and did not meet a recognized exception to litigation privilege. Moreover, the ADFPS did not contain clear, explicit, unequivocal language that might have abrogated litigation privilege.  The Court therefore concluded that Aviva properly asserted litigation privilege against the syndic.

 

[1] Lizotte v. Aviva Insurance Company of Canada, 2016 SCC 52 (CanLII) [Lizotte].

[2] Blank v. Canada (Minister of Justice), [2006] 2 SCR 319, 2006 SCC 39 (CanLII) [Blank].

[3] Lizotte at para 22, citing Blank at paras 27, 34 and 36.

[4] Blank at para 34.

[5] Blank at paras 34-38.

[6] Blank at para 39.

[7] Lizotte at para 33.

[8] Lizotte at para 67.

 

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