Internal Investigations and Privilege: A ReduxAlberta v Suncor Energy Inc, 2016 ABQB 264 (CanLII)
An internal investigation into a workplace accident was privileged, and thus protected from disclosure, the Alberta Court of Queen’s Bench recently held in Alberta v Suncor Energy Inc, 2016 ABQB 264 [Suncor]. The Court found that notwithstanding an Alberta Occupational Health and Safety Act [OHSA] requirement to carry out an investigation and prepare a report, certain information and records created or collected during the investigation were protected by litigation and legal advice privilege.
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 an earlier post, we reviewed Talisman Energy Inc v Flo-Dynamics Systems Inc, 2015 ABQB 561 [Talisman], where Master Prowse discussed these different types of privilege in the context of an internal investigation. The Master held that documents collected in an investigation, headed by in-house counsel, were protected by legal advice privilege, but not, on the facts of the case, litigation privilege.
Subsequent to Talisman, the Alberta Court of Queen’s Bench again had occasion to consider whether an internal investigation was privileged. In Suncor, an employee was killed in a workplace accident. On the day of the accident, Suncor reported the incident pursuant to the OHSA. It also commenced an internal investigation under the direction of in-house counsel. Occupational Health and Safety (OHS) staff also conducted an investigation, during which they collected records and interviewed approximately 15 witnesses. Under the OHSA, Suncor itself 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.” Notwithstanding the furnishing of the report to OHS and the provision of the names of all persons interviewed as well as those comprising Suncor’s 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 litigation and legal advice privilege.
The Court in Suncor first considered whether Suncor was entitled to claim litigation privilege over the information it collected during its investigation. Given Suncor’s statutory obligations, could it assert that the “dominant purpose” for the collection of information was to prepare for litigation? The Court held it could, stating at paras. 45-46:
...although Suncor has a statutory obligation under the OHS Act to conduct an investigation and prepare a report on the Accident for the Ministy/OHS, that obligation does not foreclose or preclude Suncor's entitlement to litigation privilege for all purposes, particularly if the evidence demonstrates that Suncor had taken deliberate steps to cloak documents and information collected in the process of the investigation with the garb of privilege in anticipation or contemplation of litigation.
Denying Suncor its entitlement to claim litigation privilege over information created and/or collected during an investigation, because of an overlapping statutory obligation to investigate and report, would prejudice Suncor's right to defend itself against any potential civil actions, criminal prosecutions or regulatory claims. That result would defeat the police justification and purpose of the law in relation to litigation privilege... .[Italics in original]
The Court then considered whether, on the facts, Suncor had established that the records at issue were prepared for the dominant purpose of existing or contemplated litigation. The Court referred to Talisman for the proposition that affidavit evidence sufficed for discharging the claimant’s onus, and referred to the affidavit evidence of in-house Suncor counsel that outlined the circumstances under which Suncor anticipated litigation. Pointing to the seriousness of the accident, the potential for various penalties and sanctions under the OHSA, an RCMP investigation and the OHS investigation, the Court agreed that “it was reasonable for Suncor to have anticipated or contemplated that there was a very good chance” that litigation was possible, including “the likelihood of regulatory prosecution by the OHS, laying of Criminal Code charges, or civil litigation.” As a result of the uncontroverted affidavit evidence, and the actions of in-house counsel which began on the same day of the accident, the Court found that the dominant purpose test was met.
With respect to legal advice privilege, the Court found that Suncor demonstrated it sought and received legal advice from internal and external counsel. In considering whether the specific records that Suncor asserted litigation and legal advice privilege over were in fact protected, given the volume of records at issue, the Court ordered Queen’s Bench Case Management Counsel to act as a referee in assessing the records. The Court would then consider the referee’s recommendations in finally adjudicating on the records.
Suncor broadens and strengthens the ability of companies to keep internal investigations privileged, even in the face of a statutorily-mandated investigation. As with Talisman, Suncor demonstrates the importance of having, and following, formal internal investigation policies and procedures to make it clear that investigations are being made for the dual purpose (where possible) of ascertaining facts in order to obtain legal advice and preparing for contemplated litigation. As the facts of Suncor illustrate, having the investigation focused and directed by a lawyer as soon as possible is important. Where that lawyer is in-house counsel, care must be taken to demonstrate that the purpose of the investigation is legal, rather than business-related.