ICBC Law

BC Injury Law and ICBC Claims Blog

Erik MagrakenThis Blog is authored by British Columbia ICBC injury claims lawyer Erik Magraken. Erik is a partner with the British Columbia personal injury law-firm MacIsaac & Company. He restricts his practice exclusively to plaintiff-only personal injury claims with a particular emphasis on ICBC injury claims involving orthopaedic injuries and complex soft tissue injuries. Please visit often for the latest developments in matters concerning BC personal injury claims and ICBC claims

Erik Magraken does not work for and is not affiliated in any way with the Insurance Corporation of British Columbia (ICBC). Please note that this blog is for information only and is not claim-specific legal advice.  Erik can only provide legal advice to clients. Please click here to arrange a free consultation.

Posts Tagged ‘privilege’

Court Finds ICBC's "Claim Payment Proposal" Extends Limitation Period

March 28th, 2013

When you can’t agree with ICBC as to the value of your claim they sometimes provide a “Claim Payment Proposal” which, unlike a conventional settlement, does not resolve a claim but leaves the door open to litigation.  Reasons for judgement were released this week by the BC Supreme Court, Vernon Registry, considering the effect of such a proposal on a limitation period.

In this week’s case (Coombs v. LeBlond Estate) the Plaintiff was injured in a 2008 collision.  The Plaintiff and ICBC could not agree on the value of the claim and ICBC provided a Claim Payment Proposal.  The Plaintiff eventually sued for damages but did so after the expiry of his limitation period. ICBC applied  to dismiss the lawsuit on this basis.  The Plaintiff argued that the Claim Payment Proposal, despite being marked ‘without prejudice‘ was an admissible confirmation of the cause of action extending the limitation period.  Mr. Justice Betton agreed and dismissed ICBC’s application.  In doing so the Court provided the following reasons:

[23]         The act of marking a document with the clause “without prejudice” alone is insufficient to determine whether a document is privileged. Rather, the two conditions stated in Belanger must be present for a “without prejudice” letter to be privileged. There must be:

(a)      a dispute or negotiation between two or more parties, and;

(b)      terms of settlement offered.

[24]         There is no issue with condition (a) in the present case. The privilege issue turns on whether terms of settlement were offered by ICBC in their letter.

[25]         In my view, neither the letter of December 8, 2008 nor the attached claim payment proposal contain such terms. The defendants stress that there are terms attached, but they are not, in my view, terms of settlement.

[26]         In Rogic the first letter attaching the full and final release clearly communicated that the terms of settlement would be payment of $5,000 in exchange for a full and final release. If that release was signed, the action was concluded; accordingly, the letter was not admissible.

[27]         The second letter, as was noted in paragraph 32, did not contain any such terms and was admissible; however, it did not constitute a confirmation of a cause of action.

[28]         The defendants also cite Strassegger v. Harrison Hot Springs Resort Hotel Ltd., [1999] B.C.J. No. 1878 (S.C.) in support of their position. I find this case is not helpful to the defendants’ cause. Strasseggerwas decided on the ground that the correspondence could not be relied upon as confirmation of the action, not whether the document was privileged: see paragraph 11.

[29]         Here the effect of the letter, the cheque, and the claim payment proposal is to confirm the cause of action. It also informs the plaintiff as to ICBC’s view that the money represents a reasonable offer of settlement. It does not, however, impose any terms for the settlement of the action. It provides only that there be an acknowledgement of the receipt of the monies and that they would be deducted from any future recovery.

[30]         In my view, even if the plaintiff had executed the claim payment proposal, the terms contained in it are not the sort of terms contemplated by the Court of Appeal in Belanger or this court in Rogic as being terms of settlement of the dispute or negotiation.

[31]         Accordingly, the application of the defendants is dismissed.


Some Threats OK, Others Not So Much in Settlement Negotiations

March 21st, 2012

In BC the law provides wide protection over confidential settlement discussions to permit parties in a lawsuit to have full and frank resolution attempts.  Typically settlement discussions made on a ‘without prejudice’ basis are protected by the law of settlement privilege and are not admissible in a subsequent trial.

There are exceptions to this general rule, however, and one such exception relates to communications with”threats of an egregious nature“.  Reasons for judgement were released yesterday by the BC Supreme Court, Vancouver Registry, demonstrating this.

In yesterday’s case (Monument Mining Limited v. Balendran Chong & Bodi) the parties were involved in a defamation lawsuit.  In the course of the lawsuit various settlement offers were exchanged.  The Plaintiff sought to introduce these into evidence.  The Defendants opposed arguing these were protected by settlement privilege.  Mr. Justice Goepel concluded the letters contained egregious threats and therefore privilege was lost.  In admitting the letters into evidence the Court provided the following reasons:

[25] In Evergreen Building Ltd. v. IBI Leaseholds Ltd., 2006 BCSC 1190 at para. 16, 58 B.C.L.R. (4th) 294, Kelleher J. said at para. 16:

[16]      Privilege is lost not by making a threat, but by threatening to do something of an egregious nature. For example, a threat to commence an action or to bring a motion does not destroy the privilege attaching to a settlement communication. On the other hand, a threat to commit perjury is not privileged.

[26] I find that the July 12 Letter does contain threats of an egregious nature. The July 12 Letter warns that if the settlement proposal is not accepted, the Clients may  bring claims against Monument, Avocet and their respective directors alleging fraud and other misdeeds and may inform the AIM, the TSX and Haywood Securities Inc. of the alleged fraudulent conduct. Such actions could be devastating for a publically traded company.

[27] Monument and Avocet were not parties to the D8 Litigation.  The reservation of rights set out in the July 12 Letter served no legitimate settlement purpose. The intent of the reservation of rights was to put improper pressure on entities not involved in the D8 Litigation. The threat is of such character that the public interest in its disclosure outweighs the public interest in protecting settlement communications.  Settlement privilege does not extend to the July 12 Letter.

[28] In the result, the Settlement Letters are admissible and will be marked as exhibits 37, 38 and 39 respectively.


Documented "Prior Inconsistent Statements" Need To Be Listed Under the New Rules of Court

November 8th, 2011

Reasons for judgement were released last week by the BC Supreme Court, Vancouver Registry, dealing with document listing obligations under the new Rules of Court.

In last week’s case (Tran v. Kim Le Holdings Ltd.) the Plaintiff sued for damages as a result of personal injuries.  In the course of trial the Defendant called a witness who gave evidence as to the circumstances of the Plaintiff’s injury which were not favourable to the Plaintiff’s case.  The same witness had provided the Plaintiff’s lawyer a statement years before the trial with a different version of events.  The Plaintiff failed to disclose the existence of this document in her list of documents.  The Plaintiff argued that the new Rules of Court don’t require such statements to be listed as they only go to credibility which is a collateral matter.

Mr. Justice Harris disagreed finding that statements containing prior witness inconsistencies can go beyond the issue of credibility and therefore need to be listed.  The Court provided the following reasons:

[13] Counsel submits, first, that a prior inconsistent statement is not a document that could be used to prove or disprove a material fact. It is a document relevant only to credibility. Therefore, it is not required to be listed. Secondly, counsel submits that until the contradictory evidence was given by the witness, counsel had no intention of using the document at trial. The use of the document has only become necessary because of the surprise in the evidence that was given.

[14] I turn to deal with this point. I must say that I am sceptical that the plaintiff’s argument is correct. It is common ground that the document here is covered by litigation privilege, which necessarily ties it into relevant issues in the litigation. Rule 7?1(6) governs the listing of privileged documents. It is not obvious to me from the wording of the rule that the scope of the obligation set out in Rule 7?1(6) is qualified or limited by Rule 7?1(1).

[15] More importantly, however, prior inconsistent statements can be used, in my view, to prove or disprove material facts. Depending on how a witness responds to the statement when put to the witness, the effect of the use of the statement may well go beyond merely affecting credibility. The witness may adopt the content of the statement insofar as it relates to material facts; in that sense, at least, statements can facilitate the proof of material facts. Statements can facilitate the proof of material facts even if the witness does not adopt them, because findings on material facts may be affected by findings on credibility. But if a witness does adopt a prior inconsistent statement and accept the truth of it, that statement may be used as proof of the truth of its contents, and thereby be used to prove or disprove material facts.

[16] A fine parsing of the obligation to list documents is, in my view, contrary to the policy of disclosure which is exemplified by the Stone decision in the Court of Appeal.

Mr. Justice Harris agreed that while the document should have been listed, it could be used in cross examination as the failure to list was done in good faith and further there was no real prejudice to the Defendant.  In doing so the  Court applied the following factors in exercising its discretion:

[19] What is clear, however, from these cases is that my discretion has to be exercised on the basis of the following principles:

(a)      whether there is prejudice to the party being cross-examined ?? in this case, of course, it is a witness who is being cross-examined, but the relevant prejudice is to the defendants;

(b)      whether a reasonable explanation of the party’s failure to disclose has been provided;

(c)      whether excluding the document would prevent the determination of the issue on its merits; and

(d)      whether, in the circumstances of the case, the ends of justice require the documents to be admitted.

[24] It is evident that there is a policy against insulating a witness from cross-examination on prior inconsistent statements, because to do so would undermine the search for truth. It is also evident that requiring listing can be seen in some respects as being inconsistent with the purpose of litigation privilege. Both of these points were accepted in the Cahoon decision, in the context of a discussion of the limitation, or explanation, of the scope of the Stone decision…

[33] I observe further, with respect to prejudice, that the defendants could readily have determined whether or not the witness had given a statement. The fact of the existence of the statement was within the knowledge of the defendants. It is not a situation quite like Stone where there would simply be an assumption by counsel that a pain journal had likely been kept and that the fact of the existence of the document could not be verified without the document having been listed. In my view, this mitigates the prejudice, to some degree, that is associated with the use of the document.

[34] Weighing and balancing these conflicting principles, I have reached the conclusion that, in the interests of justice, counsel ought to be permitted to use the document for the purpose of cross-examination.


Plaintiff Independent Medical Exams and Litigation Privilege Discussed

October 4th, 2011

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.


Counselling Record Production Request Denied as Irrelevant and Privileged

June 30th, 2011

Concise reasons for judgement were recently released discussing the scope of document production limits under the New Rules of Court.  In today’s case (RCL v. SCF) the Plaintiff was seeking damages following a motor vehicle collision.  He had a history of emotional difficulties stemming in part from childhood abuse.  He received counselling regarding this from the Elizabeth Fry Society.  The Defendant requested a Court Order for production of these records.

Master Young refused the application as going beyond the narrower document production test under the New Rules of Court and further held that even if the documents were relevant they were privileged under the Wigmore criteria.  The Court provided the following reasons:

[1] The application is being brought under our new Rule 7-1(1). The relevancy test in the Supreme Court Rules has now narrowed to one of direct relevance, to use the words of the section, “to prove or disprove a material fact”, and it is no longer a chain of inquiry test related to any matter in question. I am not satisfied that these records will assist in proving any material fact.

[2] The defendant already knows that the plaintiff was abused as a child; that this event caused him emotional pain; that he attempted suicide; that he sought help from the Elizabeth Fry Society; that he missed work prior to the motor vehicle accident; and that he suffers from borderline personality disorder and depression. I also note a record that his brother passed away shortly before this accident. The defendant has obtained volumes of clinical records. I do not see how the detail of the counselling at Elizabeth Fry or the details of the abuse are going to add anything to the information they already have. It is clearly a request based on a chain of inquiry that there might be something relevant in those records.

[3] Everyone agrees that the Wigmore criteria that is set out in the Slavutych v. Baker decision is the relevant test to determine if the records are privileged, and I am not going to repeat those four criteria, but criteria 1 to 3 were conceded to exist, and there was some debate in submissions about whether criteria 4 has been met, and that says that (as read in):

The injury that would inure to the relationship by the disclosure of the communications must be greater than the benefit thereby gained for the correct disposal of the litigation.

[4] I agree with Mr. Williams that the case of M. v. Martinson is directly on point. Paragraph 4 of the Wigmore criteria has been interpreted in the broad sense as one of a public policy issue. Would the public interest and the proper administration of justice outweigh in importance any public interest that may be protected by upholding the claim for privilege? As Master Joyce (as he then was) said at para. 18 (as read in):

I find there is great public interest in encouraging victims of abuse to seek counselling and to be assured of the confidentiality of that communication. The public interest is served if that confidentiality is fostered to the greatest possible degree.

[5] What of the interests of justice? Is the central issue in this case before me today in this lawsuit the same as might be contained in those records? I think not. There have already been several other sources outlining this plaintiff’s prior psychological problems. These records are at best peripherally related to the material issue. I am not convinced that in the interests of justice, I should breach that confidential relationship at all, not even to review those records myself and certainly not under this new narrow test for document production in our Rules of Court.

[6] So on that basis, I am denying the application.


Details Please: Privileged Documents and Disclosure Requirements of the New Rules of Court

April 13th, 2011

In 2009 the BC Court of Appeal released reasons for judgement addressing the details necessary when listing privileged documents.  The first reasons I’m aware of addressing this issue under the New Rules of Court were released this week by the BC Supreme Court, Vancouver Registry, demonstrating that the law remains unchanged.

In today’s case (Anderson Creek Site Developing Ltd. v. Brovender) the Plaintiff sued various defendants claiming damages for alleged unpaid accounts.   The Defendants listed many privileged documents in the course of the lawsuit.  The Plaintiff brought an application seeking that these be described with greater detail.  Mr. Justice Verhoeven granted the application and in doing so provided the following useful summary describing the necessary details when listing a privileged document under Rule 7-1(7):

[110] Rule 7-1(7) requires that:

The nature of any document for which privilege from production is claimed must be described in a manner that, without revealing information that is privileged, will enable other parties to assess the validity of the claim of privilege.

[111] The description in the list of documents is not sufficient to respond to that requirement.

[112] The defendants argue that the description that they have given on their list of documents is not materially different than the plaintiff’s own description. That may be. That application is not before me at the moment.

[113] It is hard to know in a given case how much description is required to answer the requirement in Rule 7-1(7) without revealing privileged information. It depends on the nature of the case and the nature of the document. In this case, I would expect most documents to be transactional documents. There may be other documents as well.

[114] As a minimum, in order to have any assessment of the validity of a claim of privilege, in the circumstances of this case, it seems to me that what is required to be described are four things: first, something about the nature of the communication, that is whether it is a letter or an e-mail or memorandum or something else; second, the date upon which it was created or sent; third and fourth, the author and the recipient. With that information, it may be possible for the plaintiff to assess the claim of privilege. There may be further disclosure that is necessary at that stage; I cannot tell.

[115] So that application will be allowed to that extent. The defendants will produce a more detailed list of privileged documents disclosing that information. The plaintiff will be at liberty to reapply for a better list, in order to challenge the claim of confidentiality.


Keep it to Yourself! Solicitor-Client Privilege and Unintended Waiver

March 2nd, 2011

As previously discussed, the law in Canada permits people to seek confidential legal advice.  Confidential communications between a lawyer and client are a “fundamental civil and legal right“.  This right permits individuals to not only get the advice they need but also to claim ‘privilege‘ over these discussions and to not disclose them in the course of a lawsuit.

This privilege can be waived, however, if the person receiving the advice chooses to discuss the nature of the privileged communications.  This was demonstrated in interesting reasons for judgement released this week by the BC Supreme Court, Vancouver Registry.

In this week’s case (Biehl v. Strang) the Plaintiff apparently advanced the Defendant Mr. Strang $1.6 million.  The lawsuit involved allegations of unjust enrichment and whether there was an enforceable contract as between the parties.  The Plaintiff sued two individual and two corporate defendants.

In the course of the lawsuit one lawyer prepared a statement of defence on behalf of Mr. Strang and the corporate defendants.  Eventually a new lawyer was brought on to represent the corporate defendants.  Mr. Strang, by the time he attended examination for discovery, was self represented.

At his discovery Mr. Strang was asked if he agreed with the contents of the Statement of Defence.   He disagreed with some of the contents.  He was then asked whether he was “giving instrucitons (to his then lawyer) about the drafting of the statement of defence“.   He did not object to this question and replied that he did not give instructions as to the contents of the defence.

The Plaintiff’s lawyer then brought a motion for access to the former lawyer’s records arguing that the Defendant’s lack of objection in discussing this topic constituted a waiver of privilege.   Madam Justice Arnold-Bailey agreed and ordered limited production of otherwise privileged documents.   The court reviewed the law of solicitor-client privilege and waiver at length at paragraphs 31-68 of the reasons for judgement.  In concluding that privilege had been waived the Court provided the following reasons:

[69]    To summarize, in the present case Mr. Strang and the corporate defendants jointly retained Mr. Johnson to represent them.  In the course of doing so, Mr. Johnson prepared and filed a joint statement of defence.  Mr. Strang, by his answers to questions at examination for discovery, denied that he had provided instructions to Mr. Johnson as to the statement of defence and impliedly waived solicitor-client privilege in relation to instructions provided to Mr. Johnson regarding the preparation of the statement of defence.  I have found that Mr. Strang waived his own privilege but not that of the corporate defendants.  However, the corporate defendants will waive privilege as to the preparation of the statement of defence if they call Mr. Johnson.  They seek to do so for the limited purpose of determining whether Mr. Strang approved the statement of defence.

[70]    The position of the plaintiff is that he is entitled to all the material in the possession of Mr. Johnson and his law firm that is relevant and material to the preparation and content of the statement of defence.

[71]    The position taken by the corporate defendants is too narrow; the position taken by the plaintiff is too broad.  The somewhat unusual facts in this case dictate a very cautious and considered approach.  The record is clear that as of the June 2010 discovery of Mr. Strang, he and the corporate defendants no longer jointly retained Mr. Johnson, the lawyer with whom they had privileged communications.  This speaks to a waiver of privilege by Mr. Strang that is very limited in scope.  Mr. Strang ought not to be considered to have waived solicitor-client privilege over anything more than the matters he spoke directly about.

For a more in depth look at this topic you can review the Canadian Bar Associations recently released paper on Solicitor Client Privilege in Canada.


BC Court of Appeal: No Litigation Privilege During Investigative Stage

June 10th, 2010

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.


Getting the Insurance Company's Documents; Litigation Privilege and the Trend of Increased Disclsoure

May 24th, 2010

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.


Document Disclosure and Litigation Privilege – A Potentially Difficult Test to Meet

March 14th, 2010

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.