Solicitor Client Privilege vs Litigation Privilege

Carthy J. A. in the 1997 Ontario Court of Appeal decision of General Accident v Chrusz defined solicitor-client privilege as being of two distinct genres, the first being communications between the solicitor and the client which the court referenced as “legal professional privilege”.

The second branch relates to communications from a third party to the lawyer for the purpose of contemplated or existing litigation, which is defined  as “litigation privilege”.

Historical, and indeed modern case law, both use the distinct terms of solicitor-client and litigation privilege, which should be noted, is not consistent with the nomenclature above.

It was the development of solicitor-client privilege, as noted by Carthy J. A., which led to the evolution of litigation privilege, as referenced in the 1979 decision of the Supreme Court of Canada in Solosky v R., which was, in turn, cited  by Carthy J.A. in General Accident v Chrusz:

 The history of the privilege can be traced to the reign of Elizabeth I (see Berd v. Lovelace (1577), 212 E.R. 33, and Dennis v. Codrington (1580), 21 E.R. 53). It stemmed from respect for the “oath and honour” of the lawyer, dutybound to guard closely the secrets of his client, and was restricted in operation to an exemption from testimonial compulsion. Thereafter, in stages, privilege was extended to include communications exchanged during other litigation, those made in contemplation of litigation, and finally, any consultation for legal advice, whether litigious or not.

The Supreme Court in Blank uses the terms “solicitor client” and “litigation” privilege, which is likely good authority for continuing with this vocabulary. Modern commentators also use the term “legal advice privilege” to refer to the traditional communications between solicitor and client.

With the decision of the Supreme Court in Blank, “the divorce between the two forms of privilege is complete”, as stated by Master MacLeod in 2013 in Kaymar Rehabilitation v Champlain Community Care Access Centre.

The Basics of Solicitor Client Privilege

This privilege need not be in contemplation of litigation, which distinguishes this privilege from litigation privilege. ¹ The privilege applies to communications between lawyer and client which are intended to request and provide legal advice. ² Not every communication will meet this test.

The essential test in the application of this privilege is whether the lawyer was hired just to investigate the factual background or was hired to do so plus provide a legal opinion to the employer. This is particularly significant in the context of a workplace investigation conducted by legal counsel. A retainer to investigate only the factual issues will not meet the test of this privilege. ³

The issue of privilege based on the work product being solicitor client communication was discussed in the 2001 Manitoba Court of Appeal decision in Gower v Tolko Manitoba.

In response to a complaint made by a female employee that she had been sexually harassed by Gower, a human resource specialist, the company hired a lawyer from British Columbia to conduct an investigation.

The mandate given to the investigator was as follows:

1. The Investigator will conduct an investigation as counsel on behalf of the Employer for the purpose of providing a fact finding report and giving legal advice based on the findings in the report.
2.  The Investigator’s notes, fact finding report and legal advice will be protected by solicitor/client privilege.  The Investigator will advise all witnesses, including the Complainant and the Respondent, that she is conducting this investigation as legal counsel for the Employer.
3.  All information supplied to the Investigator by the individuals whom the Investigator interviews, including the Complainant and the Respondent, will be supplied in confidence and will be treated by the Investigator as strictly confidential.  The information will be revealed only on a “need to know” basis in order to ensure that the investigation is fair.
4.  The Investigator will meet with and interview the Complainant, the Respondent and any other employees or other witnesses whom the Investigator believes have information relevant to the investigation.
5. The Investigator will prepare a report for the Area Manager stating her findings of fact and her conclusion as to whether the findings of fact constitute sexual harassment and a breach of the Employer’s harassment policy and will provide legal advice based on those findings of fact and conclusions.
6.  The Area Manager will treat the report as strictly confidential and will review the report only with their advisors.

The lawyer did so and delivered her report which contained six sections. These were (1) introduction, (2) witness statements, (3) credibility assessments, (4) findings of fact, (5) legal analysis and (6) legal advice.

Following the termination of the alleged wrongdoer and the resulting wrongful dismissal action, the plaintiff sought production of the report, to which the employer asserted legal advice privilege.

The case went through three levels of decision making. The master, on first level, ordered production of all parts, save the last two. The chambers judge determined that the entire report was privileged, a position which was affirmed by the Court of Appeal.

The Court of Appeal set the three fold test for this purpose as follows:

Thus, the onus is on the person seeking to claim the privilege to establish three factors in connection with any particular document:

1. that the document was the giving or obtaining of legal advice;

2. the presence of a solicitor and the presence of a client; and

3. the existence of the solicitor-client relationship.

The court continued to state that a preliminary step in giving advice is to understand the factual background.

The fact that the lawyer hired for this purpose was not a member of the Manitoba bar was not of any consequence.

The critical aspect of this determination lies in whether the lawyer was hired purely for the purposes of investigating the factual context or alternatively was mandated to provide not only the background facts, but also to provide a legal opinion based on those facts discovered.

The same test was considered and not applied in a 1994 case in the B.C. S.C., Wilson v Favelle. The court determined that the mandate of the lawyer was one not intended to provide legal advice. The mandate of legal counsel was to:

1. investigate allegations and unravel the full details by interviewing the complainant and by following up with other persons identified as having knowledge of this matter;
2. prepare a confidential report to the Deputy Minister which documents the facts relating to the allegations and provides advice to the Deputy Minister as to any violations of standards of conduct for public service employees, (attached), or which impair the Ministry's ability to perform its function or damages the reputation of either the Crown or its employees.

The same conclusion was reached in North Bay General Hospital v ONA. The mere fact that the investigator was a lawyer was not enough to make the conclusion that his report was subject to legal advice privilege. An examination of the nature of the retainer proved the contrary, namely, that the investigator was hired to investigate the allegations made by the complainant.

A similar analysis as to the existence of legal advice privilege, in this instance, as applied to the provisions of the B.C. Freedom of Information and Privacy Act in the 2014 decision Adjudicator Lemiski in Re Resort of Municipality of Whistler, noted the dual function of the investigating lawyer and hence the need to determine whether the lawyer was hired to provide a legal opinion in addition to performing a fact finding function, which was found and the report met the privilege test.

This same issue was discussed very recently In January of 2015 in the decision of Master Short of the Superior Court of Ontario in Howard v City of London.

The plaintiff was employed in the position of Director, Social  Community Support Services in addition to being given responsibilities for a City owned nursing home, Dearness Home. A resident had left the residence and was killed attempting to cross a street. The issue of the investigator’s mandate arose due to this death. A London lawyer, John McNair, was retained to conduct an investigation into the circumstances of this death. Following the completion of the report, the plaintiff was terminated for just cause.

The Master essentially conducted a factual review of the context of the retainer to determine the mandate of the investigator. He found as follows, noting that the contemplated retainer bore no reference to the possible termination of any employee, let alone the plaintiff specifically.

The email to the Acting City Manager continued for two pages of single spaced text and then concluded as follows:

Based upon your recommendation to undertake a further investigation based upon Mr. Angeletti's advice to you which Investigation could include the role of City Council and the Committee of Management (whose roles could be in issue), I am prepared to seek instructions from City Council to retain an independent legal counsel (such as Mr. McNair) on your recommendation to provide advice and an independent privileged legal opinion concerning:

1.Whether the policies, procedures, and actions of the city in relation to the administration of the dearness home conform with the applicable regulatory standards as they relate to the events leading up to the critical incident;

2.Whether the procedures, policies and measures taken to date by the city in relation to the quality of care and organizational effectiveness as they relate to the dearness home and establish due diligence in relation to the events leading up to the critical incident;

3. Whether oversight by the City Council, through its counsel, committees, committee of management and appointed officers and employees conforms to the applicable regulatory standards and meets the test of due diligence in relation to events leading up to the critical incident. or

4.Whether the city’s procedures for investigating critical incidents conform to the applicable regulatory standards, and whether all necessary steps have been undertaken to date...~

Master Short conducted a detailed examination of the factual background of the retainer and concluded that its purpose was not to provide legal advice.

Third Party Investigator

The question may arise as to the application of this privilege to the results of an investigation undertaken by a non-lawyer or a person not retained to provide legal advice. This issue was discussed in the 2024 decision in Alberta. ⁴

The trial judge reviewed the development of the law on this issue.

He concluded that cases in which the privilege was allowed involved (1) witness statements of non-privileged events, or the gathering of existing records that (2) either came into existence or (3) were assembled to communicate with legal counsel for professional advice. A second category was a context in which a lawyer conducted a factual investigation to provide legal advice.

The court also determined that this submission would not succeed to all fact situations conducted by non-lawyer investigators, into sources internal to the client, “such as interviews of employees”, where one of the purposes is to communicate with legal counsel and a second purpose is to further issues such as corporate operations.

Where the sole purpose, however, is to instruct legal counsel, the privilege should apply.

The court noted that often third party investigations are not typically within the range of protections. The following considerations would apply to this context:

1. There may be a class of third parties which possess specific information and expertise required by legal counsel to understand the client’s affairs. Examples given were accountants or physicians obtaining information from a client under some form of disability which prevents direct communication.
2. This is to be contrasted with interviews conducted of employees to ascertain historical facts, which is illustrative of the absence of any unique or special skill. No privilege would then apply.
3. For this reason, the court would require evidence of the specific expertise required by legal counsel for the communication or that the need for legal advice required a more thorough investigation than usual. Good reason should be shown why it could not have been conducted by legal counsel.
4. There may be a dual purpose to the investigation. Legal advice privilege would not automatically rule the day. The court will require evidence of the comparative dominance of each intent to assess the privilege defence.
5. An interviewed employee who is providing a statement to a non-lawyer has no reasonable expectation of privacy if the information is to be used for ordinary corporate purposes. The principle that clients must be able to speak openly to lawyers does not apply “with the same force” where there are dual purposes.
6. Information gathered by a third party reviewer would not necessarily lead to the revelation of a solicitor-client relationship, including the fact of and the nature of the retainer, the identity of the lawyer, the legal concerns of the client, objectives and strategic objectives of legal counsel.
7. For these reasons, the role of the third party investigator is not essential to the existence of this privilege merely because it conducted a factual investigation for dual purposes.

Practical Considerations

Where controversy has arisen with respect to the assertion of privilege, the supporting materials must state that the investigative materials were gathered or created to inform legal counsel or that the investigation generally was for privileged purposes. ⁵

Where the employer maintains a workplace policy dealing with the manner of investigation, the fact of this process will likely show a non-privileged purpose. There will then arise an issue as to which, if any, was the dominant purpose. It cannot be inferred. This must be proven. ⁶