When is privilege waived?

Exclusive to Canadian HR Reporter from Rudner Law.

It seems like common sense. Everything you talk to your lawyer about is confidential, and remains that way forever, right? Maybe - not always.

This confidentiality is called privilege. At law, privilege exists in two primary contexts. First, the relationship between lawyer and client is called solicitor-client privilege. The second, litigation privilege, relates to anything prepared in anticipation of litigation.

Anything privileged is not disclosed in litigation, and disclosure cannot be compelled.

Sometimes, a party to whom this privilege applies can waive it, making some or all of what was privileged fair game for litigation. The party who is alleged to have waived privilege may deny this waiver and their actions will come under the court’s scrutiny. This happened in Masse v. TerraFarma Inc, where the court reviewed an alleged waiver of privilege over the legal advice the defendant received prior to a dismissal for cause.    

The facts on case involving privilege

In Masse, the COO for the defendant company was the subject of a workplace investigation into his conduct. The defendant retained an outside investigator, who as part of the investigation, interviewed a member of the defendant’s board of directors and summarized their interview. This included the following bullet point:

“The lawyer that Geoff Hoover [the CEO] hired, who drafted the letter, had recommended to Geoff that he consider termination with pay and hiring someone like the Investigator for an independent assessment.”

The investigator produced a report which included the summary of this interview as an appendix, among multiple other documents. In its Statement of Defence, the defendant pleaded that it relied on the contents of this report to support the decision to dismiss for cause.

After receiving the Statement of Defence, the plaintiff brought a motion for the defendant to disclose this report. The court granted the plaintiff’s motion, and the defendant gave the plaintiff the report - which included the above bullet point, unredacted.

The plaintiff’s counsel contacted the defendant’s counsel, asserting that because the defendant had not redacted this information, the content of the legal advice the CEO had received was relevant and should be produced. The plaintiff argued that by including that note in the report, the defendant had waived privilege regarding this legal advice.

When the legal advice the CEO had received was not produced in discovery, the plaintiff moved for a further and better Affidavit of Documents. The court refused its motion, finding that the defendant’s actions to that point were not a waiver of solicitor-client privilege.

The defendant’s representative refused all questions regarding this legal advice on examination for discovery, and the plaintiff then moved for production of documents and answers to questions refused during discovery respecting this legal advice.

Review of law on privilege

The court reviewed the law on privilege and confirmed that in the context of waiver under consideration, the waiver must be explicit: the party must either state that they will waive privilege or that they intend to rely on the privileged information at trial.

Note that there are other ways that privilege can be waived beyond what the court considered. These include where a third party participates in a discussion that would otherwise be privileged. We also note that not all discussions with a lawyer are privileged; for example, where a party’s lawyer conducts an investigation and prepares the report, they are not working as counsel but as an investigator and privilege will not apply.

Even the inadvertent disclosure of privileged materials, such as a lawyer’s opinion letter, can result in a waiver of privilege over the materials and the communications leading up to the preparation of this opinion letter.

The court noted that the party who had disclosed the existence of this legal advice was an independent member of the defendant’s board, and without authority to waive privilege. The court also noted that this individual had only mentioned this legal advice in passing to provide context - this was not an explicit waiver.

The court found that the defendant had not given any indication that it had followed this advice, or intended to rely on it at trial. The defendant had not acted on the legal advice, which was to “consider termination [of the plaintiff] with pay” - and did the opposite, dismissing for cause and without pay.

Finally, the court noted that the remark was a brief “bottom line” of the advice given, and that this did not justify a finding of waiver. The brief nature of the comment meant that including it in documentary discovery was not a waiver.

The court denied the plaintiff’s requested relief.

Takeaways for HR

Even with this outcome supporting the defendant’s position, this case stands as a good reminder of the importance of keeping your conversations with counsel private and confidential. An offhand remark about a conversation with a lawyer, like the one here, led to extensive litigation which required the defendant to prepare materials and appear at a hearing.

While the defendant was successful (and received some of its costs as an award), it remains out of pocket for at least some of its legal bill. Further, the outcome remained unclear until the decision was rendered - meaning that the defendant may have had to disclose the content of the legal advice it received leading up to making the decision to dismiss, the contents of which could have further compounded the matter. 

Only the party that “owns” the privilege may waive it, and it is possible to inadvertently waive privilege. When privilege has been waived it cannot be “unwaived”, and otherwise confidential information is no longer protected from disclosure. As such, without an incredibly good reason to waive privilege - it is best to err on the side of caution and say nothing.

Geoffrey Lowe is an associate at Rudner Law in Toronto. He can be reached at (416) 864-8500 or [email protected].