SC of Canada: S. 337 of the Act Respecting the Distribution of Financial Products and Services does not abrogate litigation privilege attached to a document

Supreme Court of Canada: While considering the issue regarding the powers of investigation of the syndic that whether the assistant syndic of the Chambre de l’assurance de dommages (the syndic) was empowered to demand from the Insurer the production of documents subject to litigation privilege, for inspection, the Bench of McLachlin C.J. and Abella, Cromwell, Moldaver, Karakatsanis, Wagner, Gascon, Côté and Brown, JJ., held that S. 337 of the Act Respecting the Distribution of Financial Products and Services is a general production provision that does not specifically indicate that the production must include records for which privilege is claimed, thereby not abrogating litigation privilege attached to a document. It was further observed that, “Although litigation privilege is distinguishable from solicitor-client privilege, it is nevertheless a class privilege and gives rise to a presumption of inadmissibility for a class of communications, namely those whose dominant purpose is preparation for litigation. Thus, any document that meets the conditions for the application of litigation privilege will be protected by immunity from disclosure unless the case is one to which one of the exceptions to that privilege applies.”

In the instant case, the appellant, an assistant syndic of the Chambre de l’assurance de dommages asked the respondent to send her a complete copy of its claim file with respect to one of its insured. The syndic based this request on S. 337 of the Act Respecting the Distribution of Financial Products and Services (ADFPS). However the insurer expressed its inability to present certain documents, citing that they were either covered by solicitor- client privilege or by litigation- privilege. The appellant contended that the aforesaid provision is sufficient to lift the privilege, because it created an obligation to produce ‘any document’.

Perusing a plethora of case laws on the development of law of litigation privilege in Canada, the Court referred to its previous decision in Blank v. Canada (Minister of Justice), 2006 SCC OnLine Can SC 39 : 2006 SCC 39, to highlight the present position vis-à-vis litigation privilege, which states that solicitor-client privilege and litigation privilege are distinct. However that Court observed that, “litigation privilege is subject to clearly defined exceptions, not to a case-by-case balancing test. In the context of privileges, the exercise of balancing competing interests is associated with case-by-case privileges, not class privileges. The exceptions that apply to solicitor-client privilege are all applicable to litigation privilege. These include the exceptions relating to public safety, to the innocence of the accused and to criminal communications.” It was further stated that litigation privilege can be asserted against third parties, including third party investigators who have a duty of confidentiality, therefore the insurer can very well assert the litigation privilege against the syndic, which cannot be lifted by S. 337 of ADFPS. [Lizotte v. Aviva Insurance Company of Canada, 2016 SCC OnLine Can SC 35 : [2016] SCC 52, decided on 25.11.2016]

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