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