ICBC Law

Reasons for judgement were recently brought to my attention discussing the scope of powers of the Court at Case Planning Conferences.  Specifically the Court found that Rule 5-3 does not provide the power to over-ride common law principles of privilege.

In the recent case (Galvon v. Hopkins) the Plaintiff was injured in a motor vehicle collision.  She sued for damages.  As the lawsuit progressed the Plaintiff did not provide any expert medico-legal evidence to the Defendant.

This concerned the Defendant who brought a Case Planning Conference and obtained an order requiring the Plaintiff to “notify counsel for the defendant of the name of the neurologist with whom the appointment had been made and the date of the appointment, and secondly, that the parties were to provide opposing counsel with written notice forthwith upon any appointment being set for the plaintiff with medical experts, such notice to include the name of the expert, the expertise of the expert, and the date of the appointment“.

The Plaintiff appealed arguing that the Court did not have jurisdiction to make such orders under the Rules of Court.  Madam Justice Kloegman agreed and allowed the appeal.   In doing so the Court provided the following reasons:

21.  I agree with counsel for the plaintiff’s submission that Rule 5-3 cannot be read as to allow the Case Planning Conference Judge or Master to disregard the common law principle of privilege.

22.  In my view, Master Bouck was fixated upon settlement of the litigation; always a commendable and important goal of a case planning conference, but not at the cost of ignoring the boundaries of her jurisdiction.  It may well be that such information could have been exchanged at a settlement conference, which is a voluntary and without prejudice process, but it should not be mandated as part of trial preparation.

23.   …She did not appear to consider that the object of the Rules to avoid trial by ambush only apply to evidence that would be used at trial, not to expert advice received through consultation.

24.  By requiring the plaintiff to disclose the very fact of her attendance before a medical expert, and run the risk of an adverse inference if she did not call the expert at trial, the master was also interfering with the plaintiff’s right to elect which witnesses to call.  Such interference is not sanctioned, or warranted, I might add, by our Supreme Court Rules.

25.  Having concluded that our Rules do not grant the presider at a case planning conference the power to make the orders made by Master Bouck, it follows that she did not have the jurisdiciton to do so.

26.  The appeal is allowed and Master Bouck’s orders will be set aside.

As of today this case is unreported but, as always, I’m happy to provide a copy of the reasons for judgement to anyone who contacts me and requests these.

Useful reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, discussing the scope of litigation privilege when a Plaintiff attends an independent medical exam arranged on their behalf in the course of a personal injury lawsuit.

In this week’s case (Lanteigne v. Brkopac) the Plaintiff was injured in a 2008 collision.  In the course of the lawsuit the Plaintiff’s lawyer had her assessed by a neuropsychologist to explore the possibility of organic brain injury.  The Plaintiff’s lawyer chose not to order a report from the neuropsychologist following the assessment.

ICBC brought an application to compel the neuropsychologist to produce a copy of his clinical records of the assessment.  Master Taylor dismissed the application finding that the notes generated during Plaintiff arranged independent medical exams are subject to litigation privilege.  In addition to canvassing several cases addressing this area of law Master Taylor provided the following useful comments:

[15] On the other hand, the plaintiff says this is not a case where Rule 7-6(1) is applicable because the court did not make an order under this subrule for the plaintiff to attend to be examined by Dr. Coen. Rather, the plaintiff attended upon Dr. Coen by referral from her own counsel. Accordingly, says the plaintiff, what actually applies is the law of privilege, not Stainer v. Plaza.

[16] Thus, the issue is framed - can a defendant or third party who has not obtained a doctor’s report by compulsion of a court order, and prior to disclosure of any medical-legal reports by the plaintiff or in the absence of any reports, obtain access to the non-treating doctor’s notes and clinical findings, or are said notes and clinical records privileged as forming part of the brief of the plaintiff’s solicitor until the time when the plaintiff chooses to rely on the non-treating doctor as a witness at trial and the doctor’s notes must be disclosed…

[21] In my view it is improper to categorize the non-treating doctor or any other third party consultant retained on behalf of the plaintiff as a witness in which there is no property. The very fact that the plaintiff consulted with that physician or other individual during the course of litigation removes that individual from the “witness” category until such time as the plaintiff and counsel make a determination about whether or not that physician will be used as a witness at the trial, and preserves the right of privilege. The fact that the consulted doctor or other consultant never gives evidence preserves the privilege for all time unless waived by the plaintiff.

[22] While the defendant and third party submit they could have the plaintiff examined by their own doctor or proceed with an examination of the doctor pursuant to Rule 7-5, they complain that those alternatives are costly, and, accordingly, the court should assist them by ordering the records of Dr. Coen be produced and thus save them the cost of proceeding with the other alternatives. The defendant also submits that Rule 1-3 provides the court with sufficient justification to order Dr. Coen to provide his notes of the plaintiff’s examination.

[23] In my view, the defendant and third party have not shown any meritorious reason for abrogating the plaintiff’s litigation privilege related to the information obtained by Dr. Coen from the plaintiff as a result of the referral to Dr. Coen by the plaintiff’s solicitor. Nor, in my opinion, does Rule 1-3 provide justification for abrogating the privilege.

Given ICBC’s monopoly over vehicle insurance in BC they typically have to perform multiple roles following a collision including investigating the issue of fault in order to make internal decisions regarding the premium consequences for the customers involved in the crash.  Documents prepared during this ‘investigative‘ stage generally need to be produced during litigation and claims for litigation privilege will fail.  Reasons for judgement were released this week further demonstrating this fact.

In this week’s case (Fournier v. Stangroom) the Plaintiff was injured in a 2007 collision.  In the early days following the crash and well before litigation got underway ICBC retained an engineering firm to inspect the Plaintiff’s vehicle.  The engineering firm communicated their findings to ICBC.  In the course of the lawsuit the Defence lawyer commissioned an expert report from the same firm but did not exchange it with the Plaintiff’s lawyer.

The Plaintiff made the typical document disclosure demands from the Defendants.   These were not complied with in a satisfactory fashion resulting in a Court application.   The Defence lawyer argued that the full file from the engineering firm is subject to litigation privilege.  Master Caldwell disagreed and ultimately ordered better document disclosure inlcuding production of the engineering firms materials documenting their initial investigation.  In making this order Master Caldwell provided the following reasons:

[11] On August 9, 2007 the initial adjuster on the file requested MEA or one of their engineers to examine the plaintiff’s vehicle in order to determine whether the plaintiff was wearing his seatbelt at the time of the collision. The engineer did so, communicated with the adjuster the following day with questions and subsequently reported to the adjuster on September 13, 2007. That adjuster referred to that report as being sufficient for his purposes; the next adjuster, Ms. Madsen referred to the “verbal report” as being “sufficient for the purposes of handling the claim SHORT OF LITIGATION” (emphasis mine).

[12] In early 2011 defence counsel commissioned MEA to prepare an expert report, apparently regarding the seatbelt issue, for possible use at trial; he says that since such a report has now been requested, the engineer’s file material, notes and such are not producible unless and until the report is received and provided to plaintiff’s counsel 84 days before trial.

[13] In cases such as this one, the adjuster or adjusters have duties of investigation on behalf of both the plaintiff and the defendants; there must, almost of necessity, be an initial period of adjusting or investigating to discover the factual matrix within which the adjusters will perform their duties and assess the file and the claims or roles of the interested parties. Absent such period and process of investigation the adjuster can have no reasonable basis upon which to conclude that there is a reasonable prospect of litigation and that all or part of what is done from any given point in time forward is done for the dominant purpose of litigation. In this regard see Hamalainen (Committee of) v. Sippola (1991) 62 BCLR (2d) 254 (BCCA).

[14] These engineers were approached within the first 3 weeks following the collision, clearly within the period of initial investigation and was even seen by at least one of the adjusters as being used for purposes of handling the file short of litigation. The investigative material, notes, correspondence and other such recordings of the engineers were not created at a time when litigation was a reasonable prospect; neither were they created for the dominant purpose of litigation. The fact that counsel has now requested an expert report from MEA does nothing to change that any more than a request to a G.P. or plaintiff’s medical expert that he or she provide an expert report renders that practitioner’s clinical records privileged.

[15] The MEA investigative material, notes, correspondence and working papers which arose between August 9, 2007 and September 13, 2007 inclusive are not subject to a valid claim of litigation privilege; they are ordered to be listed and to be produced to plaintiff’s counsel within 14 days. If there are any other MEA materials which arose between September 14, 2007 and the date when defence counsel commissioned their expert report, those are to be listed with the required clarity, date and description in order that any further claim of litigation privilege can be properly assessed.

(Note: The Decision discussed below was overturned by the BC Court of Appeal on August 25, 2011)

As I’ve previously written, the Rules of Court require parties to a BC Supreme Court Civil Lawsuit to disclose relevant documents to opposing parties.  Some documents are privileged and need not be exchanged but their existence needs to be disclosed and these documents need to be described “in a manner that, without revealing informaiton that is privileged, will enabel other parties to assess the validity of the claim of privilege“.  Failure to do so can result in exclusion of the documents from trial.  Reasons for judgement were released today by the BC Supreme Court, New Westminster Registry, discussing this area of law.

In today’s case (Houston v. Kine) the Plaintiff was injured in a 2006 motor vehicle collision.  The Defendant admitted responsibility for the crash.  The Plaintiff sustained various  injuries including a major depressive disorder, pain disorder, anxiety disorder and PTSD following the collision.  Madam Justice Gropper found that the collision was responsible for these injuries and assessed the Plaintiff’s damages at $525,000.

There was a 5 month break from the beginning of the trial to its conclusion.  During this break ICBC undertook surveillance of the Plaintiff over two periods of time.  The Defence lawyers, however, failed to disclose this evidence in compliance with the Rules of Court.  When they attempted to put the video into evidence the Plaintiff objected.  Madam Justice Gropper sided with the Plaintiff and held that the evidence should not be admitted.  In reaching this conclusion the Court provided the following helpful reasons:

[11] The burden on the party seeking to tender the undisclosed document is to establish to the Court’s satisfaction a reasonable explanation for the failure to disclose. As Henderson J. stated inCarol v. Gabriel (1997), 14 C.P.C. (4th) 376, 75 A.C.W.S. (3d) 858:

[9]        A party tendering a previously undisclosed document must establish to the court’s satisfaction a justification for the failure to abide by Rule 26(14). The question of whether the opposite party will be prejudiced by the admission of the document is always relevant but is not, in and of itself, decisive. Even in cases where no prejudice will ensue from the admission in evidence of the document, it will be excluded unless there is a reasonable justification for the earlier failure to disclose it. To hold otherwise would be to dilute the disclosure obligation and tempt counsel to refrain from disclosing in situations where they do not expect any prejudice to result.

[12] Here, the explanation for the failure to disclose is that the videos are not documents and they were never in the defendants’ possession or control. Rather, these videos and the accompanying reports fall clearly within the solicitor’s brief.

[13] The defendants’ position that it is sufficient that the videos and background materials were disclosed in March 2010, before the recommencement of the trial does not address the requirement of the Rule in 23(13) that the disclosure be “forthwith.” Not disclosing, as a matter of strategy, is not a satisfactory explanation to address the “forthwith” requirement.

[14] It is therefore my view that the videos have not been disclosed in accordance with R. 26(13) and I must therefore consider whether I ought to exercise my discretion to allow the Mexico video into evidence in accordance with R. 26(14).

[15] The factors to be considered are described by the Court of Appeal in Stone v. Ellerman, 2009 BCCA 294; 273 B.C.A.C. 126; [2009] 9 W.W.R. 385; 71 C.P.C. (6th) 25; 92 B.C.L.R. (4th) 203; 2009 CarswellBC 1633, at paras. 30 and 31. They are:

1.         prejudice to the party, in this case the plaintiff;

2.         whether there was a reasonable explanation for the other party’s failure to disclose;

3.         whether excluding the document would prevent a determination of the issue on the merits; and

4.         whether in the circumstances of the case the ends of justice require that the document be admitted.

[16] Addressing the prejudice to the plaintiff, it is difficult for me to assess the prejudice versus the probative value issue as I have not seen the videos and I have not reviewed the investigators’ notes of the video. I note in addressing this factor that there were hours of video recorded and the defendants’ counsel has provided a summary of what is contained in the videos. Based upon that, I am not satisfied that the videos are sufficiently probative to outweigh the prejudice to the plaintiff in allowing their admission having not been disclosed forthwith on a supplementary list of documents. This is despite the assertion that the plaintiff “lived” the events and that she would not be surprised by the contents. She has given evidence and called her medical and functional capacity experts. The late disclosure of the video evidence has impaired the ability of the plaintiff to meet the evidence.

[17] The admission of the videos and notes may require that she be recalled, or that she recall some of the experts. These days were added to the trial for its conclusion. The admission of the video evidence will necessarily extend the trial.

[18] In relation to the second factor, whether or not there was a reasonable explanation for the parties’ failure to disclose, I have already determined that strategy does not provide a reasonable explanation for lack of disclosure. Rule 26(13) requires that supplementary documents are to be disclosed forthwith and they were not.

[19] Concerning the third factor, whether the document would prevent the determination of the issue on the merits, I have heard evidence including the plaintiff’s evidence and the defendants’ evidence and expert evidence about the plaintiff’s activity and her level of disability. Based on the summary provided by counsel for the defendants of the contents of the video I cannot conclude that I will be prevented from determining the issue on the merits.

[20] Finally, I am not persuaded that the ends of justice require that videos be admitted.

[21] I therefore find that the videos are not admissible.

Interestingly, Madam Justice Gropper went even further and held that the witnesses who made the videos could not testify as to their observations of the Plaintiff as doing so would undermine the decision to exclude the video evidence.  The Court’s reasoning behind this decision could be found at paragraphs 22-28 of Appendix A to the Reasons for Judgement.

Two decisions were released this week by the BC Supreme Court dealing with the issue of litigation privilege in BC personal injury lawsuits.  The first case stressed the importance of lawyers properly identifying and listing documents, the second dealt with evidence gathered by an insurance company during the “investigative stage” following a motor vehicle collision.

In the first case (Craig v. Smith) the Plaintiff was injured in a 2006 motor vehicle collision.   The Defendant claimed privilege over various documents and the Plaintiff brought a motion to produce these.   The parties worked out many of their respective differences before the Court gave judgment but prior to resolving the issues Master Caldwell gave the following guidance stressing the importance of lawyers properly disclosing relevant documents:

[5] It is counsel’s duty to determine relevance and claims of privilege; see G.W.L. Properties Ltd. v. W.R Grace & Co., [1992] B.C.J. No. 2387. There is an obligation to describe documents in sufficient detail to enable other parties to assess the validity of the claim of litigation privilege; see Hetherington v. Loo et al, 2007 BCSC 129 and Nanaimo Shipyard Ltd. v. Keith et al, 2007 BCSC 9. The dominant purpose test is still the appropriate test to be applied in determining litigation privilege but is “more compatible with the contemporary trend favouring increased …mutual and reciprocal disclosure which is the hallmark of the judicial process”; see Blank v. Canada (Minister of Justice), 2006 SCC 39.  This is all well settled law.

In the second case (Pshelensky v. Dion) the Plaintiff was involved in a 2006 collision.  Within a week of the crash the Plaintiff hired a personal injury lawyer to represent her.  Shortly after this the Defendant’s insurance company obtained a statement from the Defendant and witnesses to the crash.  After the lawsuit started the Defendant refused to produce a copy of the statement arguing that since the Plaintiff hired a lawyer a lawsuit was reasonably contemplated when the statements were taken and they were protected by ”litigation privilege“.

Master Taylor disagreed and ordered that the Defendant produce the statements. In doing so the Court provided the following reasons:

[18]         I take the view that the two statements taken from the driver and passenger of the defendant motor vehicle were essentially taken to determine the cause of the accident and, of course, to determine who might be at fault.

[19]         In my view the defendants rely upon the fact that the plaintiff retained counsel early on in these proceedings or shortly after the accident to suggest that litigation was contemplated.  I do not agree with this proposition for in my view it was far too early in the proceedings to make a final determination as to whether or not litigation would be inevitable.

[20]         I further take the view that the statements taken from Badr and Dion were so close to the time of the accident that they were very early in the continuum before the dominant purpose became one of furthering the course of litigation.  Accordingly I find that both statements are not privileged and should be released to the plaintiff applicant.

This is just one in a series of recent cases making it clear that when an insurance company is investigating why a crash happened it will be very difficult to keep statements from the Plaintiff in a subsequent lawsuit.  You can click here to read my archived posts further dealing with the issue of litigation privilege in the context of BC personal injury lawsuits.

As I’ve previously written, litigation privilege is a principle which allows parties in a law suit to keep evidence from the other side.  In order to successfully take advantage of litigation privilege the document not only has to have been created in the reasonable contemplation of a lawsuit but also for the ‘dominant purpose‘ of use in such a lawsuit.

If a document was made for multiple reasons (ie - investigating a potential claim and defending against a potential claim) the law will likely require disclosure.  Today the BC Court of Appeal released useful reasons summarizing this area of law.

In today’s case (Mathew v. Delta School District #37) the Plaintiff ’slipped and fell on some ice at a school’.  Shortly after the incident the school’s principal, a teaching assistant and a custodian made notes documenting what occurred.  The Plaintiff started a lawsuit and asked for these.  The Defendant refused to produce these claiming they were privileged.  The dispute made it all the way to the BC Court of Appeal who found that the documents were not privileged as they were made during the ‘investigatory stage‘.  The BC High Court provided the following very useful reasons:

[11] The investigatory stage to which the master referred is well recognized in the authorities. In Hamalainen at para. 24, the following was quoted from a speech in Waugh v. British Railways Board, [1980] A.C. 521 at 541, attributing it to what Lord Denning had said in that case:

If material comes into being for a dual purpose – one to find out the cause of the accident – the other to furnish information to the solicitor – it should be disclosed, because it is not then “wholly or mainly” for litigation. On this basis all the reports and inquiries into accidents – which are made shortly after the accident – should be disclosed on discovery and made available in evidence at the trial.

[12]         The investigatory stage was discussed in Hamalainen as follows:

[26]      Even in cases where litigation is in reasonable prospect from the time a claim first arises, there is bound to be a preliminary period during which the parties are attempting to discover the cause of the accident on which it is based. At some point in the information gathering process the focus of such an inquiry will shift such that its dominant purpose will become that of preparing the party for whom it was conducted for the anticipated litigation. In other words, there is a continuum which begins with the incident giving rise to the claim and during which the focus of the inquiry changes. At what point the dominant purpose becomes that of furthering the course of litigation will necessarily fall to be determined by the facts peculiar to each case.

[13]         It was, on the evidence, open to the master to regard the notes as being made in the investigatory stage as opposed to the later litigation stage. They were made directly following Mr. Mathew’s accident. I recognize it may be argued that, in the circumstances, there was little in the way of an investigatory stage here. But that is a matter to be determined on the peculiar facts of each case and I am unable to accept that the evidence foreclosed the significance the master appears to have attached to the notes being made as quickly as they were in relation to the incident.

Further to my recent post on this topic, often after serious motor vehicle collisions ICBC sends adjusters out to collect statements from the parties and known witnesses to the event.

When a lawsuit for compensation is brought by an injured party ICBC sometimes does not disclose the witness statements to the Plaintiff on the basis of ‘litigation privilege‘.   Being a monopoly insurer, ICBC investigates claims and our Courts have consistently held that if the statements were obtained during the ‘investigation‘ stage ICBC’s claim of ‘litigation privilege‘ will fail and the documents will have to be disclosed.  Reasons for judgement were released this week with helpful comments addressing this area of the law.

In this week’s case (Sauve v. ICBC) the Plaintiff was injured in 2008 motor vehicle collision.   After the collision ICBC hired an independent adjuster who obtained witness statements and also provided ICBC a report in which she sized up the various witnesses.  In describing the report the adjuster deposed that she “used my expertise and experience as an Insurance Adjuster to describe each of the Witnesses, including their physical appearance, demeanor and presentation. I also provided an analysis as to the likely performance of each witness in court. I further provided analysis of the commonalities between various witness accounts for the purpose of assessing credibility and preparing the case of the Defendant, ICBC should litigation occur”

ICBC provided the Plaintiff with the witness statements but refused to provide the report claiming the protection of litigation privilege.  The Plaintiff brought a motion to force disclosure.  Ultimately Mr. Justice Joyce held that the reports were privileged and ICBC did not have to disclose them to the Plaintiff.  Before reaching this conclusion the Court provided helpful reasons addressing the difficulty ICBC may face in claiming privilege over witness statements obtained in the immediate aftermath of a collision.  Mr. Justice Joyce reasoned as follows:

[34] I turn to the second part of the test: were the documents created for the dominant purpose of assisting the defendant in the conduct of the anticipated litigation by Ms. Sauvé?

[35] Once again in answering that question, it is important to focus on when the reports were created and to consider them separate from any consideration of whether the witness statements and photographs would meet the dominant purpose test. I can certainly accept that the witness statements and photographs may well have come into existence for two purposes:

(1)       to investigate the circumstances of the accident, and

(2)       to assist in the conduct of litigation.

[36] Therefore, whether those documents would satisfy the second part of the test might have been a difficult question to answer. The defendant might not have been able to meet the test for the first group of documents on a balance of probabilities, but that is not the question that I have to decide.

[37] In my view, when deciding whether the reports were prepared for the dominant purpose of litigation I have to consider not only what was known by Mr. Taylor and communicated to Ms. Webber; I also have to consider what Ms. Webber knew when she prepared the reports, as well as the nature of the reports. Ms. Webber has deposed that when she prepared the reports, she believed that the dominant purpose for their creation was litigation. She came to that conclusion being aware of the information that the witnesses could give with respect to the circumstances of the accident. According to Ms. Webber, the reports consist of her descriptions of the witness, her impressions or opinions concerning their credibility and her own analysis of how the evidence of the various witnesses matched or conflicted. While it might be possible that such information might assist ICBC at the investigation stage, I am of the view that any such use of the documents would clearly be secondary to their use in assisting counsel in the conduct of the action. I am, therefore, satisfied that the reports were created for the dominant purpose of litigation and attracted litigation privilege.

In addition to the above this case contains a useful analysis of the law of waiver of privilege and ‘common interest’ privilege and is worth reviewing in full for anyone interested in these topics.

As I’ve previously written, litigation privilege is a principle which allows parties not to share relevant documents with the other side in a lawsuit in limited circumstances.  Despite this principle, the BC Courts seem to be favouring the trend of disclosure making it more difficult for parties not to disclose documents after lawsuits get underway.  Reasons for judgement were released last week demonstrating this trend.

In last week’s case (Beer v. Nickerson) the Plaintiff was injured in 2008 as a result of a slip and fall incident at a Pharmasave in Victoria, BC.  The Plaintiff alleged the fall occurred as a result of the Defendant’s “negligent operation of her scooter in the store“.

The Defendant contacted her insurance company after the incident.  The insurance company conducted an investigation and in the process of this obtained a statement from the Defendant, a drawing of the store prepared by the Defendants daughter, and photographs of the location of the incident.

After the lawsuit started the Defendant’s lawyer refused to provide these documents arguing they were protected by “litigation privilege“.   Master Bouck of the BC Supreme Court disagreed and ordered that these documents be produced.  In reaching this conclusion the Court reasoned that the documents were not privileged because a lawsuit was not a ‘reasonable prospect‘ when these documents were created and further that they were not created for the ‘dominant purpose‘ of use in a lawsuit.  Before reaching her verdict Master Bouck provided the following useful summary of the law:

[17] The legal principles to be applied on this application are well-settled and set out in Hamalainen (Committee of) v. Sippola (1991), 62 B.C.L.R. (2d) 254, and Stevanovic v. Petrovic, supra. Those principles are as follows:

1.  The party withholding disclosure bears the onus of establishing a claim for privilege over a document.

2.  The test for considering whether litigation privilege is established is two-fold:

(a)  Was litigation a reasonable prospect at the time the document in dispute was created?

(b)  If so, was the dominant purpose of the document’s creation for use in litigation? (commonly known as the “dominant purpose” test.)

3.  Litigation can properly be said to be in reasonable prospect when a reasonable person, possessed of all the pertinent information including that particular to one party or the other, would conclude that it is unlikely that the claim for loss will be resolved without it.

4.  However, the prospect of litigation alone is not sufficient to meet the claim of privilege. Nor does the denial of liability alone mean that all documents produced thereafter are subject to a claim for privilege. As stated by the court in Hamalainen v. Sippola:

Even in cases where litigation is in reasonable prospect from the time a claim first arises, there is bound to be a preliminary period during which the parties are attempting to discover the cause of the accident on which it is based. At some point in the information gathering process the focus of such an inquiry will shift such that its dominant purpose will become that of preparing the party for whom it was conducted for the anticipated litigation. In other words, there is a continuum which begins with the incident giving rise to the claim and during which the focus of the inquiry changes. At what point the dominant purpose becomes that of furthering the course of litigation will necessarily fall to be determined by the facts peculiar to each case.

6.  It is not incumbent upon the court to accept without question the opinion of either deponent on one of the very issues that is to be decided. Whether or not litigation was a reasonable prospect is a matter for the court to decide on all the evidence.

[18] To these principles I would add that the dominant purpose test is consistent with “the more contemporary trend favouring increased disclosure”: Blank v. Canada (Department of Justice), 2006 SCC 39 at paras. 60-61.

This case is helpful in permitting Plaintiffs to obtain more fulsome disclosure early in a lawsuit.  Our Courts have made it clear that if documents are gathered by an insurance company for the purpose of investigating a claim (as opposed to defending a potential lawsuit) then these documents will have to be disclosed under the BC Supreme Court Rules.

Further to my previous posts on the topic of ICBC Claims and Privilege, reasons for judgement were released yesterday by the BC Supreme Court, New Westminster Registry, demonstrating that a party seeking to withhold documents on the basis of ‘litigation privilege’ may face an uphill battle.

In yesterday’s case (Celli v. White) the Plaintiff was a pedestrian who was struck by a vehicle.  The Plaintiff was injured and eventually sued for damages.  In the course of the lawsuit the Defendants refused to produce a number of documents relevant to the Plaintiff’s Claim on the basis that they were protected by ‘litigation privilege‘.

The Plaintiff obtained legal advice almost immediately after the accident.  As a result of this the defence lawyers argued that “litigation was inevitable from the outset.”  On this basis the Defendant refused to produce a number of documents which were gathered by the Defendant’s insurer in the immediate aftermath of this collision.

The Plaintiff applied to Court for production of a number of the allegedly privileged documents.  The Plaintiff was largely successful and the Defendants were ordered to produce a number of documents which were gathered by the Defendants insurer in the 6 months following the collision.  In reaching this decision Master Caldwell summarized the law of litigation privilege in the context of BC Injury Claims as follows:

[8] The leading case in this subject area is Hamalainen v. Sippola (1991), 62 B.C.L.R. (2d) 254 [Hamalainen].  In that case the Court of Appeal held that two factual determinations were required in order to uphold a claim of litigation privilege:

(1)        Was litigation in reasonable prospect at the time the document was produced,

(2)        If so, what was the dominant purpose for its production?

[9] The court indicated that while the first of these requirements would not likely be overly difficult to establish, the second would be more challenging:

22.       I am not aware of any case in which the meaning of “in reasonable prospect” has been considered by this Court. Common sense suggests that it must mean something more than a mere possibility, for such possibility must necessarily exist in every claim for loss due to injury whether that claim be advanced in tort or in contract. On the other hand, a reasonable prospect clearly does not mean a certainty, which could hardly ever be established unless a writ had actually issued. In my view litigation can properly be said to be in reasonable prospect when a reasonable person, possessed of all pertinent information including that peculiar to one party or the other, would conclude it is unlikely that the claim for loss will be resolved without it. The test is not one that will be particularly difficult to meet. I am satisfied it was met in this case in connection with all of the documents in issue. The circumstances of this accident, and the nature of Mr. Hamalainen’s injuries, were such that litigation was clearly a reasonable prospect from the time the claim was first reported on December 1st, 1986.

(b)        What was the dominant purpose for which the documents were produced?

23.       A more difficult question to resolve is whether the dominant purpose of the author, or the person under whose direction each document was prepared, was “… [to use] it or its contents in order to obtain legal advice or to conduct or aid in the conduct of litigation …”.

24.       When this Court adopted the dominant purpose test, it did so in response to a similar move by the House of Lords in Waugh v. British Railways Board, [1980] A.C. 521. In that case the majority opinion is to be found in the speech of Lord Wilberforce, who agreed “in substance” with the dissenting judgment of Lord Denning M.R. in the Court below. While the Court of Appeal judgments do not appear to have been reported, some excerpts from Lord Denning’s opinion are to be found in the speech of Lord Edmund-Davies, including the following at p. 541 of the report:

If material comes into being for a dual purpose - one to find out the cause of the accident - the other to furnish information to the solicitor - it should be disclosed, because it is not then “wholly or mainly” for litigation. On this basis all the reports and inquiries into accidents - which are made shortly after the accident - should be disclosed on discovery and made available in evidence at the trial.

25.       At the heart of the issue in the British Railways Board case was the fact that there was more than one identifiable purpose for the production of the report for which privilege was claimed. The result of the decision was to reject both the substantial purpose test previously adhered to by the English Court of Appeal and the sole purpose test which by then had been adopted by the majority of the Australian High Court in Grant v. Downs.

26.       Even in cases where litigation is in reasonable prospect from the time a claim first arises, there is bound to be a preliminary period during which the parties are attempting to discover the cause of the accident on which it is based. At some point in the information gathering process the focus of such an inquiry will shift such that its dominant purpose will become that of preparing the party for whom it was conducted for the anticipated litigation. In other words, there is a continuum which begins with the incident giving rise to the claim and during which the focus of the inquiry changes. At what point the dominant purpose becomes that of furthering the course of litigation will necessarily fall to be determined by the facts peculiar to each case.

27.       In that sense there is obviously no absolute rule that the decision to deny liability in such a claim must mark the point in which the conduct of litigation becomes the dominant purpose underlying the production of each and every document of the sort for which privilege was claimed in this case. But I do not read the master’s reasons as invoking any such absolute rule. He was faced with affidavit material filed by the party claiming privilege which was deficient in a number of respects. As already noted it failed to draw any distinction between the purpose underlying the production of individual documents. The risk inherent in that approach was pointed out by Mr. Justice Esson in the Shaughnessy Golf case at p. 319 of the report:

Privilege was claimed for a large number of documents. The grounds for it had to be established in respect of each one. By trying to extend to the whole list the considerations which confer privilege on most of the documents, the plaintiff has confused the issue and created the risk that, because it did not make in its evidence the distinctions that could have been made, it must be held not to have established privilege for any.

28.       Furthermore, the affidavit material concentrated on the repetitious assertion by each deponent of his belief that litigation in the case was inevitable, from which fact the dominant purpose underlying the production of all documents was apparently assumed. As already pointed out that approach to the onus facing the deponent on this question represented a mistaken view of the law.

[10] Gray J. echoed this sentiment at paragraphs 97 and 98 of Keefer Laundry Ltd. v. Pellerin Milnor Corp., 2006 BCSC 1180 as follows:

97.       The first requirement will not usually be difficult to meet.  Litigation can be said to be reasonably contemplated when a reasonable person, with the same knowledge of the situation as one or both of the parties, would find it unlikely that the dispute will be resolved without it. (Hamalainen v. Sippola, supra.)

98.       To establish “dominant purpose”, the party asserting the privilege will have to present evidence of the circumstances surrounding the creation of the communication or document in question, including evidence with respect to when it was created, who created it, who authorized it, and what use was or could be made of it. Care must be taken to limit the extent of the information that is revealed in the process of establishing “dominant purpose” to avoid accidental or implied waiver of the privilege that is being claimed.

[11] This dominant purpose test was also confirmed by Fish J. in the case of Blank v. Canada (Minister of Justice), 2006 SCC 39 at paragraphs 60 and 61:

60. I see no reason to depart from the dominant purpose test. Though it provides narrower protection than would a substantial purpose test, the dominant purpose standard appears to me consistent with the notion that the litigation privilege should be viewed as a limited exception to the principle of full disclosure and not as an equal partner of the broadly interpreted solicitor-client privilege. The dominant purpose test is more compatible with the contemporary trend favouring increased disclosure. As Royer has noted, it is hardly surprising that modern legislation and case law

[TRANSLATION] which increasingly attenuate the purely accusatory and adversarial nature of the civil trial, tend to limit the scope of this privilege [that is, the litigation privilege]. [para. 1139]

Or, as Carthy J.A. stated in Chrusz:

The modern trend is in the direction of complete discovery and there is no apparent reason to inhibit that trend so long as counsel is left with sufficient flexibility to adequately serve the litigation client. [p. 331]

61. While the solicitor-client privilege has been strengthened, reaffirmed and elevated in recent years, the litigation privilege has had, on the contrary, to weather the trend toward mutual and reciprocal disclosure which is the hallmark of the judicial process. In this context, it would be incongruous to reverse that trend and revert to a substantial purpose test.

In ordering that the Defendants produce the relevant documents the Court held that the dominant purpose of much of the defendants insurer’s early investigations was due to ‘adjusting‘ the potential claims as opposed to in response to anticipated ‘litigation‘.

Since ICBC is a monopoly insurer in British Columbia the analysis of the ‘adjusting‘ phase vs. the ‘litigation‘ stage will be triggered in most multi-party motor vehicle collisions.  The lesson to be learned is that many documents which are gathered by ICBC in the early stages which may prove harmful to a Defendant if disclosed may not be protected by privilege if they were gathered by for the dominant purpose of determining how a collision occurred.

Further to my many posts on the topic of discovery, when parties are involved in a lawsuit in the BC Supreme Court the Rules of Court require the parties to disclose certain information to the opposing side.  Generally all relevant information needs to be disclosed however there are exceptions to this and one such exception is ‘privilege‘.

Generally speaking (this is not an exhaustive list), privileged documents are documents that were created with an expectation of confidentiality between a party and his/her lawyer or documents that were created with the dominant purpose of advancing the parties interests in court.

The purpose behind the privilege exception to disclosure is to permit individuals to freely discuss their legal matters and work with their lawyers to advance their interests without the fear that these conversations/actions can come back to hurt the individuals interests later on.

The law recognizes an extension of privilege between one client and their lawyer to multiple people and that lawyer if the conversations took place in anticipation of a lawsuit and the multiple parties have a common interest.  This type of privilege is sensibly called ‘common interest privilege‘.  Reasons for judgement were released today discussing this area of law and highlighting some of the limitations of common interest privilege.

In today’s case (Peters v. Paterson) the Plaintiff was seriously injured while windsurfing when he was involved in a collision with a motorboat.  He eventually sued multiple parties including the people alleged to have been operating the boat (the “Motorboat Defendants”) and the people alleged to have rented the boat to the Motorboat Defendants (the “Renter Defendants”).

Before the lawsuit started one of the Renter Defendants apparently feared a potential lawsuit and retained the services of a lawyer.  That lawyer retained an adjuster who immediately took statements from a handful of people including the people who would later turn out to be the Motorboat Defendants.

After all the Defendants were sued by the Plaintiff the Renter Defendant who initially hired the lawyer issued a Third Party Notice against the Motorboat Defendants (a Third Party Notice is a document which alleges that if a certain defendant is found at fault and has to pay that the Third Party has to indemnify that defendant for the judgement).

The Plaintiff then asked for the statements of the Motorboat Defendants to be produced.  The Lawyer for the Renter Defendants refused citing ‘common interest privilege‘.  Ultimately an application was brought to court to force disclosure and the application succeeded.  Master Taylor of the BC Supreme Court, Vancouver Registry, held that the Third Party Notice took away any claim to common interest privilege.  The key reasons were as follows:

[13] Common interest privilege is said to be an extension of the privilege against disclosure of solicitor-client communications.  As Wigmore defines it:

The chief instance occurs when the same attorney acts for two parties having a common interest, and each party communicates with him.  Here the communications are clearly privileged from disclosure at the instance of a third person.  Yet they are not privileged in a controversy between the two original parties, inasmuch as the common interest and employment forbade concealment by either from the other.  (Wigmore’s emphasis)

[14] The defendants take the position that the statements in this case are covered by common interest privilege, which, they submit, applies to an exchange of confidential information between individuals who have a common interest in anticipated litigation.  The defendants cite Buttes Gas and Oil Co. v. Hammer (No. 3), [1980] 3 All E. R. 475 (C.A) in support of their position where Lord Denning says:

There is a privilege which may be called a “common interest” privilege.  That is a privilege in aid of anticipated litigation in which several persons have a common interest.  It often happens in litigation that a plaintiff or defendant has other persons standing alongside him – who have the self-same interest as he – and who have consulted lawyers on the self-same points as he – but these others have not been made parties to the action…All exchange counsel’s opinions.  All collect information for the purpose of litigation.  All make copies.  All await the outcome with the same anxious anticipation – because it affects each as much as it does the others.

[15] The defendants maintain that common interest privilege can apply to witness statements and in fact has been so applied in a number of Canadian cases.

[16] On the other hand, the plaintiff asserts that the case at bar is distinguishable from other cases in that there is no suggestion by the defendant or their counsel that counsel has ever worked in conjunction with the motorboat defendants to jointly advance the interests of all the defendants.  As well, the plaintiff maintains, there has not been any evidence led to indicate the motorboat defendants understood the reason for giving their statements, the uses their information would be put to, or that their statements would be kept privileged from the plaintiff.  In fact, in the instant case, two of the motorboat defendants have signed authorizations to release their statements to the plaintiff.

[17] In the recent decision in Maximum Ventures Inc. v. De Graaf, 2007 BCCA 510, Mr. Justice Mackenzie discussed the test for maintaining privilege between parties at paragraph 14:

Recent jurisprudence has generally placed an increased emphasis on the protection from disclosure of solicitor-client communications, including those shared in furtherance of a common commercial interest.  In the instant case the [solicitor’s] draft was produced within the recognized solicitor-client privileged relationship.  The common interest privilege issues arise in response to a plea of waiver of that privilege.  The common interest privileges is an extension of the privilege attached to that relationship.  The issue turns on whether the disclosures were intended to be in confidence and the third parties involved had a sufficient common interest with the client to support extension of the privilege to disclosure to them….Where legal opinions are shared by parties with mutual interests in commercial transactions, there is a sufficient interest in common to extend the common interest privilege to disclosure of opinions obtained by one of them to the others within the group, even in circumstances where no litigation is in existence or contemplated.

[18] And, at paragraph 16, Mackenzie, J.A. made the following finding:

The interests of the clients of the three solicitors were not identical but they were common to the extent that financing of the Western exploration of the Mongolian properties was beneficial to all of them.  They also shared an interest in assessing the invalidity of Maximum’s claims.

[19] The defendants maintain that even though two of the defendants have signed authorizations addressed to counsel for the defendants directing that their statements be released to counsel for the plaintiff, they cannot, in these circumstances, create a waiver over the common interest privilege by so doing.

[20] In my view, that argument begs the question for two reasons.  Firstly, were the persons from whom the statements taken to request copies of their statements, surely they would be entitled to receive copies of them as no privilege attaches to one’s own statement in the hands of a third party?  It would then be open to each of those parties to deliver a copy of their statements directly to the plaintiff.  Secondly, the defendant, Paterson, has issued third party proceedings against the four individual motorboat defendants for which he seeks judgment against the motorboat defendants, or indemnity from them in the event a judgment is rendered against Paterson.

[21] The Third Party Notice contains the following allegations:

a. The plaintiff’s windsurfer struck the port side of the motorboat;

b. The motorboat defendants represented that Arvinder Kaler would be the person operating the motorboat;

c. While Paterson does not know who was operating the boat at the time of the accident, it has been represented to Paterson that Sukhbir Brar was operating the motorboat at the time of the accident; and

d. the accident was caused solely by the negligence of the operators of the motorboat.

[22] In the circumstances, two things are apparent.  One, that the allegations made in the Third Party Notice are likely the result of information gleaned from the motorboat defendants, and, two, the defendant, Paterson, alleges the accident was caused solely by the negligence of the motorboat defendants, which creates the question: where is the commonality of interest between the renter defendants and the motorboat defendants such that a privilege continues to exist over the statements taken from the motorboat defendants?

[23] In my view, by the very nature of the Third Party Notice and the allegations made in it, there has been a severing of the commonality of interest of the defendants.  In the result, therefore, there is no common interest privilege which can be maintained, and, accordingly, the statements taken from the four motorboat defendants are no longer privileged and must be turned over to the plaintiff.