"Investigative Stage" Trumps ICBC's Litigation Privilege Claim

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.