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Lex Mundi Global Attorney-Client Privilege Guide

Canada, Ontario

(Canada) Firm Blake, Cassels & Graydon LLP

Contributors

Updated 12 Mar 2020
Is the ACP recognized in your jurisdiction?

Yes. It is called solicitor-client or legal advice privilege, and it extends to 1) communications, whether oral or written; 2) that are confidential; 3) that are between a client or his agent and a legal advisor; and 4) that are directly related to the seeking, formulating or giving of legal advice.

If the ACP is not recognized in your jurisdiction, are there rules of professional confidentiality or other rules that would enable a lawyer or a client to withhold attorney-client communications or work product prepared by counsel from disclosure...

N/A

Is a distinction made in applying the ACP or professional confidentiality rules in civil and criminal proceedings? May government authorities require disclosure of attorney-client communications and legal work product?

Solicitor-client privilege applies equally in civil and criminal proceedings. However, there are certain exceptions to the application of solicitor-client privilege that are more likely to arise in the criminal context. These include: (1) where an accused’s innocence is at stake; (2) where the communications at issue are criminal or have a view to facilitate the commission of a crime; or (3) where public safety requires protection. Therefore, in these scenarios, government authorities may require disclosure of communications and/or work product otherwise protected by solicitor-client privilege.
 

In the corporate context, what test is applied to determine who within a corporation is considered the client for the purposes of the ACP? (e.g., in the U.S.: the Upjohn approach, control group test, etc.)

In Canadian law, this issue is generally treated as falling under the agency theory of privilege. As such, there is no specific test for identifying the client in the corporate context. Rather, there is relatively broad protection for confidential communications between an employee and a solicitor, regardless of the level of his or her position in the corporation, provided the objective of the communication is to obtain or receive legal advice (General Accident Assurance Co. v. Chrusz, [1999] O.J. No. 3291 (Ont. C.A.)). 
 

Is in-house counsel expected to meet a higher burden than outside counsel in order to establish that privilege applies to in-house counsel’s communications?

No. The general principles of solicitor-client privilege apply to communications with internal counsel in governments, public agencies and businesses where lawyers are salaried employees. However, in-house counsel must be acting in their legal (rather than business) capacity in order to have privilege claimed over their communications.
 

Civil Law Jurisdictions: May in-house counsel assert privilege or professional confidentiality?

N/A

Civil Law Jurisdictions: Is in-house counsel allowed to be active members of your jurisdiction’s bar?

N/A

Is the common interest doctrine recognized in your jurisdiction?

Yes

How is the doctrine articulated in your jurisdiction?

Common interest privilege is established if two or more parties have a joint interest in the subject matter of the solicitor-client communication at the time it comes into existence. The communication remains privileged with respect to the outside world, but not as between the two parties.

Must a common interest agreement be in writing?

No. The inquiry focuses on whether an opinion provided by a lawyer to one party is disclosed, on a confidential basis, to other parties with sufficient common interest in the same litigation or transactions (Iggillis Holdings Inc. v. Canada (National Revenue), 2018 FCA 51 at para. 41). While a written or oral common interest agreement may help support the existence of sufficient common interest, it is not required under Canadian law. 

Is litigation funding permitted in your jurisdiction? Are there any professional rules in this respect?

Yes, litigation funding is permitted in Canada as “an acceptable way to promote access to justice” (Marriott v. General Motors of Canada Co., 2018 ONSC 2535 at para. 8). There are no express professional rules regarding such agreements; however, the Ontario Superior Court recently identified seven factors to be considered when approving a litigation funding agreement in the context of a class action proceeding (Houle v. St. Jude Medical Inc., 2017 ONSC 5129, aff’d 2018 ONSC 6352):

  1. The procedural, technical, and evidentiary requirements that enable the Court to scrutinize the funding agreement must be satisfied. In assessing this, the Court will consider, among other things, whether (i) the representative plaintiffs received independent legal advice, (ii) the retainer and third party financing agreement were disclosed to the Court and/or defendant; (iii) the third party financier is willing to provide security for costs; and (iv) the background factual circumstances are proffered to the Court;
  2. Third-party funding must be necessary. Absent necessity, a funding agreement will not be approved;
  3. The third-party financier must make a meaningful contribution to access to justice or behaviour modification. In essence, the funding must be sufficient to achieve the goals of the class action regime or administration of justice;
  4. The third-party financier must not be overcompensated or unduly rewarded in the particular circumstances;
  5. The third-party financier must not interfere with the lawyer-client relationship, the lawyer’s duty of loyalty and confidentiality or the lawyer’s professional judgment and carriage of the litigation on behalf of the representative plaintiff or class members;
  6. The litigation funding agreement must contain a term that the third-party financier will be bound by the deemed undertaking rule and will be bound not to disclose confidential or privileged information; and
  7. The litigation funding agreement must not be illegal.
Have the courts in your jurisdiction addressed whether communications with litigation funders may be protected by the ACP or the work-product protection

In Fehr v. Sun Life Assurance Co. of Canada, 2012 ONSC 2715, the Ontario Superior Court held that a third-party funding agreement was not subject to solicitor-client privilege. The Court held that disclosing details of who is funding the class action and on what terms does not involve solicitor-client communications (para. 121). Moreover, even if such an agreement were privileged, the Court held that “a defendant is affected by a third-party funding agreement and fairness demands that any privilege associated with the agreement is waived” (para. 140) 

Is the crime-fraud exception recognized in your jurisdiction?

Yes. In order to make out the future crimes and fraud exception, three elements must be met: (1) the challenged communications must relate to proposed future conduct; (2) the client must be seeking to advance conduct which it knows or should know is unlawful, and (3) the wrongful conduct being contemplated must be clearly wrong. 

What statutes or key court decisions articulate the crime-fraud exception in your jurisdiction?
  • Solosky v. Canada, [1980] 1 S.C.R. 821 at para. 24:

“…if a client seeks guidance from a lawyer in order to facilitate the commission of a crime or fraud, the communication will not be privileged and it is immaterial whether the lawyer is an unwitting dupe or knowing participant.”

  • Descoteaux c. Mierzwinski, [1982] 1 S.C.R. 860 at para. 44:

“Confidential communications, whether they relate to financial means or to the legal problem itself, lose that character if and to the extent that they were made for the purpose of obtaining legal advice to facilitate the commission of a crime.”

  • R v. Shirose, [1999] 1 S.C.R. 565 at paras. 55-64 (affirming the above).
  • McDermott v. McDermott, 2013 BCSC 534 at paras. 31-109.
Is there a statute or rule that protects information obtained or prepared in anticipation of litigation from disclosure in legal proceedings? (In the U.S.: What state rule is your jurisdiction’s analog to FRCP 26(b)(3)?)

No. Litigation privilege in Canada is based on common law principles.

What are the elements of the protection in your jurisdiction?

Litigation privilege, also called work product privilege, applies to communications between a lawyer and third parties or a client and third parties, or to communications generated by the lawyer or client for the dominant purpose of litigation when litigation is contemplated, anticipated or ongoing. Generally, it is information that counsel or persons under counsel's direction have prepared, gathered or annotated. The documents or facts have not been disclosed to the opposing party or to the court.

Litigation privilege is a class privilege, meaning that documents that meet the conditions for its application must not be disclosed unless one of the limited exceptions applies. In other words, once documents are found to be litigation privileged, there is a prima facie presumption of inadmissibility.

Does your jurisdiction recognize an accountant-client privilege?

There is no express accountant-client privilege recognized in Canadian law. Nevertheless, privilege may extend to communications with an accountant that are in furtherance of a function essential to the existence or operation of the solicitor-client relationship (General Accident Assurance Company v. Chrusz, [1999] O.J. No. 3291 (Ont. C.A.).

The Saskatchewan Court of Appeal recent outlined the following principles with respect to communications with and of third parties, like accountants:

  1. communications of accountants are not in themselves privileged;
  2. facts and figures are not in themselves privileged but may be if they are part of a communication which is privileged;
  3. whether a communication is privileged depends on the function served by the third party in relation to the communication;
  4. the privilege extends only to communications in furtherance of a function essential to the solicitor-client relationship or the continuum of legal advice provided by the solicitor, for example:
    1. a channel of communication between solicitor and client;
    2. a messenger, translator or transcriber of communications to or from the third party by the solicitor or client;
    3. employing expertise to assemble information provided by the client and explaining the information to the solicitor; and
  5. no privilege attaches to a communication to an accountant who must consider it and provide his or her own accounting opinion (Redhead Equipment Ltd. v. Canada (AG), 2016 SKCA 115 at para. 45).
Does your jurisdiction recognize a mediation privilege?

Yes. The Ontario Rules of Civil Procedure provide that “all communications at a mediation session and the mediator’s notes and records shall be deemed to be without prejudice settlement discussions” (Rule 24.1.14).

Does your jurisdiction recognize a settlement negotiation privilege?

Yes. The Supreme Court of Canada confirmed the existence and scope of settlement privilege in Sable Offshore Energy Inc. v. Ameron International Corp., 2013 SCC 37 and Bombarder inc. c. Union Carbide Canada inc., 2014 SCC 35. 

The criteria for settlement privilege are: 

  1. A litigious dispute must be in existence or within contemplation;
  2. The communication must be made with the express or implied intention that it would not be disclosed in a legal proceeding in the event negotiations failed, and;
  3. The purpose of the communication must be to attempt to effect a settlement 

(Clayton v. SPS Commerce Canada Ltd., 2018 ONSC 5017 at para 8).

Lex Mundi Global Attorney-Client Privilege Guide

Canada, Ontario

(Canada) Firm Blake, Cassels & Graydon LLP

Contributors

Updated 12 Mar 2020