Internal Investigations and Privilege: The Alberta Court of Appeal Weighs In

by Bennett Jones LLP

Bennett Jones LLP

[co-author: Jaspreet Singh - Articling Student]

The documents and records of an internal investigation into a workplace accident may be privileged notwithstanding a statutory obligation to carry out an investigation and prepare a report, the Alberta Court of Appeal recently confirmed in Alberta v Suncor Energy Inc, 2017 ABCA 221 [Suncor]. However, extending privilege to such records requires a document-by-document examination of the purpose for creating each.

Documents that are privileged do not have to be disclosed to the other side in a lawsuit or in a freedom of information response. Several different types of privilege can apply to protect records created or collected during an internal investigation, the most common of which are litigation privilege and legal advice privilege. Litigation privilege covers records created for the dominant purpose of existing or contemplated litigation, while legal advice privilege attaches to communications between lawyers and clients made for the purpose of obtaining legal advice.

In Suncor, an employee was killed in a workplace accident. Suncor immediately reported the incident pursuant to the Occupational Health and Safety Act (OHSA) and commenced an internal investigation under the direction of in-house counsel. Occupational Health and Safety (OHS) staff conducted their own investigation, collecting records and interviewing approximately 15 witnesses. Under the OHSA, Suncor had a statutory obligation to "carry out an investigation into the circumstances" surrounding the accident, and prepare a report outlining these circumstances and the "corrective action, if any, undertaken to prevent a recurrence." Suncor provided OHS with the report, along with the names of people interviewed and those comprising the internal investigation team. OHS demanded additional records from Suncor, including copies of witness statements and records taken or collected by Suncor's investigative team. Suncor refused, citing both litigation and legal advice privilege.

In the Court of Queen's Bench decision, which we reviewed in an earlier post, the chambers judge found that the statutory obligations under the OHSA did not preclude Suncor's assertion that the dominant purpose for the collection of information was to prepare for litigation, thus enabling the documents to be protected by litigation privilege. On the facts, the chambers judge found that "the dominant purpose of Suncor’s investigation was in contemplation of litigation so as to clothe all material 'created and/or collected' during that investigation with legal privilege." To determine whether the specific records Suncor asserted privilege over were protected, a reference to Queen's Bench Case Management Counsel was ordered.

On appeal, the Court of Appeal affirmed that statutory obligations under the OHSA do not preclude privilege claims. The Court noted that the Supreme Court of Canada has held that "both litigation privilege and solicitor-client privilege 'cannot be abrogated by inference and that clear, explicit and unequivocal language is required in order to lift it.'" The language of the OHSA ("may make any inquiries" and "provide … any information") was "not sufficiently clear or unequivocal to abrogate privilege."

However, the Court found that the chambers judge erred by applying an overly broad approach to privilege: "[e]ven if the dominant purpose of the investigation as a whole was in contemplation of litigation", it did not follow that every document "created and/or collected" during the investigation was created for the dominant purpose of litigation. The chambers judge's approach would extend privilege to "the entirety of the internal investigation file, regardless of the genesis of the individual documents or bundles of like documents." For instance, records created by existing equipment or processes for a purpose other than litigation that was collected by Suncor during the investigation would be wrongly protected under this approach.

The Court outlined two central features of the correct approach to privilege based on Canadian Natural Resources Limited v ShawCor Ltd, 2014 ABCA 289. First, the inquiry into privilege must focus on the purpose for which the document was prepared or created, as opposed to the purpose for which it may have been collected or put to use. Second, each contested document must be examined, on a "document by document" (or bundle of like documents) basis, to determine whether or not it meets the test for privilege. The Court ordered that the documents be considered by a referee in accordance with the approach set out in the judgment.

The Court also provided guidance on how to sufficiently describe contested documents to allow for an assessment of privilege claims. Although documents can be subject to both litigation and legal advice privilege, parties must "independently distinguish whether solicitor-client or litigation privilege applies, in order to permit a meaningful assessment and review of each bundle of documents", and must "describe the documents in a way that indicates the basis for their claim." However, this does not require that a party "describe the document in a way that undermines the privilege claimed."

Suncor thus makes clear that while the contents of an internal investigation may be privileged, the basis for such a claim may be scrutinized. Companies should not rely on the mere existence of an internal investigation as a method to protect documents. Instead, courts will look at the purpose for the creation of each record. Where a statutory obligation to conduct an investigation arises, claims of privilege are not precluded.






DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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