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BC Personal Injury Claims and Document Disclosure

Very important reasons for judgement were released today by the BC Court of Appeal dealing with the duties of counsel when it comes to listing privileged documents in BC Supreme Court Lawsuits.
In today’s case (Stone v. Ellerman) the Plaintiff was injured in a 2002 BC car crash.  Her case proceeded to trial and she was awarded almost $700,000 in damages.  The defendants appealed and today the BC Court of Appeal ordered a new trial on the basis that the trial was ‘fundamentally flawed when, partway through the plaintiff’s evidence in chief, and over the objection of the defence, the plaintiff was permitted to use a pain journal‘.   The reason why this created a ‘fundamentally flawed‘ trial was because the pain journal was not properly identified by the plaintiff’s lawyer.
Rule 26 deals with disclosure obligations in most BC Supreme Court lawsuits and subrule 26(2.1) 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 parties to assess the validity of the claim of privilge‘.
In the course of the claim the Plaintiff’s lawyer advised her to keep a pain journal, something often done in personal injury cases.  In listing the document as privileged it was described as “notes and documents, correspondence, minutes of evidence, memoranda being the work product of plaintiff’s legal advisers“. The trial judge held that this document was not properly disclosed, however, permitted the Plaintiff’s memory to be ‘refreshed’ at trial with this document.
The Defendants appealed and succeeded.  In granting a new trial the BC Court of Appeal gave the most comprehensive summary of this area of the law that I’m aware of.  Specifically, the court said the following with respect to lawyers disclosure obligations of privileged documents under Rule 26:

[21] The first question to be addressed is whether the pain journal was adequately described for purposes of Rule 26(2.1) by “notes and documents, correspondence, minutes of evidence, memoranda being the work product of plaintiff’s legal advisers”.

[22] It is clear that it was not. Nothing in that description would “enable other parties to assess the validity of the claim of privilege” (Rule 26(2.1)), or to anticipate that anything like a pain journal existed among the “notes and documents”, even in the most general terms.

[23] The information that must be included in the description of a document over which privilege is claimed will vary depending upon the document, but it must be sufficiently described so that if the claim is challenged it can be considered by a judge in chambers: Babcock v. Canada (Attorney General), 2004 BCSC 1311, 246 D.L.R. (4th) 549, citing Visa International Service Assn. v. Block Bros. Realty Ltd. (1983), 64 B.C.L.R. (2d) 390 (C.A.).

[24] In Saric v. Toronto-Dominion Bank, 1999 BCCA 459, Mr. Justice Hall, in chambers, cited Shaughnessy Golf and Country Club v. Uniguard Services Ltd. and Chahal (1986), 1 B.C.L.R. (2d) 309 (C.A.), for the proposition that the grounds for privilege have to be established in respect of each document which is said to be privileged.  He added (at para. 12) “a litigant, (and presumably the court), has to have some proper basis upon which to determine issues of privilege as they relate to documents”.

[25] It has been held that since Rule 26(2.1) came into force in mid-1998 the “bundling” of documents under a broad description is no longer sufficient and that each document must be listed separately.  In Leung v. Hanna (1999), 68 B.C.L.R. (3d) 360 (S.C.), solicitor-client privilege was claimed over documents that were described as “documents marked P3 [through P10], the same having been initialled by the handling solicitor”. Mr. Justice Burnyeat found that each document had been listed separately as the new sub-rule required.  He found that the descriptions themselves otherwise satisfied the requirements articulated in Hodgkinson v. Simms (1988), 33 B.C.L.R. (2d) 129, under the old rule, which permitted quite generic descriptions in favour of protecting privileged information. Burnyeat J. held that such descriptions – now of individual documents – remained sufficient under the new rule.

[26] In Bajic v. Friesen, 2006 BCSC 1290, a master in chambers explained the decision in Leung this way:

[3]        It is clear from the decision of Mr. Justice Burnyeat that the sanctity, if you will, of solicitor/client privilege in his mind trumps any attempt to describe documents in part 3 such that they provide any conceivable understanding to the other party as to the nature of the document. It would appear it then forces a party concerned with the description or lack of same in part 3 to bring an application to the court which then leaves the judge or master hearing the matter to review the document and then conclude whether or not it is appropriately within part 3.

[27] Some authority supports the proposition that where the privilege claimed is not solicitor-client privilege but rather litigation privilege, as in this case, the premium placed on protecting the information is lower and the description must be more detailed to facilitate challenge.  In Hetherington v. Loo, 2007 BCSC 129, Master Caldwell distinguished Leung v. Hanna on the basis that it dealt exclusively with solicitor-client privilege.  He reasoned as follows:

[8]        …The present case deals with a claim of privilege based upon the “dominant purpose of litigation” test and protection. While information such as the date and author’s identity may well be protected from disclosure under a claim of solicitor-client privilege, such protection is not necessarily afforded claims of privilege based upon the dominant purpose test. The latter protection is less absolute, more fact driven and subject to challenge. In the recent case of Blank v. Canada (Minister of Justice), [2006] S.C.J. No. 39, Fish J. said at [paragraph] 60:

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.

[9]        And at [paragraph] 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.

[10]      In order that proper assessment may be made as to the propriety of a claim of litigation or dominant purpose privilege it is necessary that sufficient particulars of the documents be given. In most cases dealing with documents involving adjusters files and certainly in this case, particulars as to date and author must be provided. When dealing with interview notes, transcripts, and statements, it may also be necessary to identify if not the actual subject, at least the category of subject (e.g. eyewitnesses, home-care worker, etc.) involved.

[28] Snow v. Friesen, 2008 BCSC 1664, is to the same effect.

[29] In this case, the pain journal is properly to be treated as within the lawyer’s brief, or litigation privilege.  The description in the plaintiff’s affidavit of documents failed to provide any information that would have made the defendants aware of a document in the “category of subject” of the pain journal or enabled them to assess the validity of the claim of privilege.  It follows that for the purposes of Rule 26(14) the plaintiff failed to make discovery of the pain journal “as required by this rule”.

[30] Nondisclosure notwithstanding, the judge retained the discretion to permit the use of the pain journal for the purposes of the plaintiff’s examination-in-chief.  Factors basic to the exercise of this discretion are whether the defendants would suffer prejudice if the use of the journal was permitted, and whether there was a reasonable explanation for the plaintiff’s failure to disclose it.

[31] Other factors relevant to the exercise of the discretion are whether excluding the document would prevent the determination of the issue on its merits: Hoole v. Advani, [1996] B.C.J. No. 522; and whether, in the circumstances of the case, the ends of justice require that the document be admitted: Jones, Gable & Co. v. Price (1977), 5 B.C.L.R. 103; Wu v. Sun, 2006 BCSC 1890; and Adamson v. Charity, 2007 BCSC 671.

[32] In Carol v. Gabriel (1997), 14 C.P.C. (4th) 376, Mr. Justice Henderson excluded a surreptitiously recorded videotape of an independent medical examination.  He said:

[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.

[33] Mr. Justice Henderson found that the defendant would not be prejudiced in any way by the admission of the videotape, because the alleged discrepancies between the tape and the report were minor and would not have affected his assessment of the doctor’s credibility.  However, he ruled the tape inadmissible in the absence of any reasonable justification for failing to disclose it earlier.

[34] This approach has been followed in subsequent cases: see Ball v. Gap (Canada) Inc., 2001 BCSC 824, 8 C.P.C. (5th) 258; Golden Capital Securities Ltd. v. Holmes, 2002 BCSC 516; Sturzenegger (c.o.b. Zurich Trucking) v. K. Peters Industries Northern Ltd., 2003 YKSC 72; Kursar v. BCAA Insurance Corp., 2006 BCSC 586; and Wu v. Sun, 2006 BCSC 1890.

[35] It appears that the judge failed entirely to consider whether there was any reasonable explanation for the plaintiff’s failure to comply with the disclosure rule.  The law leaves no doubt that this is a central factor to be considered, nor any doubt that the fact that a document may be subject to lawyers’ brief privilege or litigation privilege does not provide a reasonable explanation for failing to disclose it in accordance with the requirements of Rule 26: Hoole v. Advani, and Ball v. Gap (Canada) Inc. (both supra).

[36] In Golden Capital Securities Ltd. v. Holmes (supra), the plaintiff claimed litigation privilege over some tape recordings made by a witness to a conversation between the witness and the defendants.  The tapes and transcripts thereof were not provided by the plaintiff to defendants’ counsel until just before the witness appeared to testify, some seven days after the trial commenced.  The plaintiff sought to have them admitted into evidence.

[37] Applying Carol v. Gabriel (supra), and noting that the burden was on the plaintiff, the judge sought a reasonable explanation for the lack of timely disclosure.  The judge rejected as a reasonable explanation the claim that the recordings were subject to litigation privilege.  While prejudice was not required to be found in order to rule the documents inadmissible, the judge found that in this case there was potential prejudice.  The defendants missed the opportunity to examine the recordings, prepare objections that might be proper, discover and respond to any problems with the recordings themselves and were unable to cross-examine witnesses who had already testified about the content of the recordings.  The judge noted that the content of the recordings had been the subject of the witness’s testimony so the plaintiff was not deprived of the opportunity to put that aspect of his case before the court.  The witness would have had to testify from memory had he not recorded the conversations or had the tapes been lost, and so the plaintiff had the benefit of the tapes to the extent of having had his memory refreshed by them.  The tapes were excluded from evidence.

[38] In my view, there was in the case at bar significant prejudice to the defence in being refused the opportunity to make a full and reasoned objection to the late production of this document.  Had the document been disclosed in a timely way, it would have undoubtedly affected defence counsel’s preparation for trial.

[39] If the pain journal had been identified in the plaintiff’s list of documents in a manner that complied with Rule 26(2.1), the defence would have been able “to assess the validity of the claim for privilege”.  If not satisfied that the document was properly protected by the claim of litigation privilege, the defence could have applied under Rule 26(8) to compel production of the document for inspection.  Upon being satisfied that the document was not privileged, the court could have ordered its production for inspection and copying under Rule 26(10). If the claim for privilege had been maintained, the defence would have known of the document’s existence, if not its content. Knowledge of its existence might well have affected settlement negotiations and would have enabled defence counsel to anticipate the document’s possible presentation at trial.

[40] With respect to contrary opinion, it is no answer to non-compliance with Rule 26 to argue that the pain journal was not used for an improper purpose at trial, or that the defence chose to cross-examine on its contents.  Those considerations are quite irrelevant to the questions of whether there was non-compliance with the rule, whether there was prejudice to the defence, and whether the judge exercised his discretion judicially.

[41] Nor is it any answer to suggest that the plaintiff was not required to produce the document until privilege was waived.  That argument ignores entirely the other provisions of Rule 26, which enable opposing counsel to challenge the claim for privilege before trial.

[42] The object of the discovery rules is to prevent trial by ambush.  The object of the Rules in general is “… to secure the just, speedy and inexpensive determination of every proceeding on its merits” (Rule 1(5)).  Discovery of documents that fails to comply with the Rules is antithetical to these ends.

[43] The judge appears to have given little or no consideration to the prejudice suffered by the defence.

[44] It is unfortunate that the trial judge did not avail himself of defence counsel’s offer to provide authorities on how the judge should exercise his discretion in the circumstances.  Defence counsel was obviously taken by surprise at the production of the pain journal in the midst of the plaintiff’s evidence in chief.  It was entirely reasonable for defence counsel to seek an opportunity to research and consider the law before making submissions to the court, and it may well have been of considerable assistance to the court.

[45] The pain journal proved to be of central importance to the plaintiff’s evidence.  As the judge observed in ruling its use permissible “her memory of events isn’t good” and without something to prompt her she “is unable to give me any of the detail that makes up the total picture.  What she gives me is conclusory opinions”.

[46] The proposition that keeping a pain journal on counsel’s advice is sufficiently common practice as to exempt such a journal from the disclosure rules is unsupported by any authority. The judge’s suggestion that one ought to assume that a pain diary is being kept in all personal injury litigation is also inconsistent with the fact that the burden of providing a reasonable explanation falls squarely on the party who has failed to make disclosure in accordance with the rules.

[47] It may be apparent in retrospect that it was necessary for the plaintiff to refer to her pain diary in order to recall events long past, and it is arguable that to have prevented her from doing so may have interfered with the proper decision of the issues at trial on their merits and with full information.  However, permitting use of the document with no notice to the defence gave the plaintiff an unfair advantage.

[48] One cannot say with certainty that the judge would have reached a different conclusion on the use of the pain diary if he had considered all relevant factors, in particular whether there was a reasonable explanation for the delay in its disclosure.  However, the simple claim that the document was subject to litigation privilege is not an explanation, and no other explanation was presented to the judge.

[49] In the absence of a reasonable explanation for the late disclosure, and without an adequate consideration of the issue of prejudice, the judge ought not to have permitted the use of the diary.

[50] In my respectful opinion, permission to use the document in the circumstances described amounted to a miscarriage of justice.

[51] I would allow the appeal, set aside the judgment and order a new trial.

Personal Injury Claims, Settlement Agreements and Repudiation

When offers are made for the settlement of ICBC or other BC personal injury claims the parties involved must take care not to ‘demonstrate an unwillingness to be bound by the agreement’ otherwise they risk the settlement agreement being repudiated.  Reasons for judgement were released today illustrating this principle.
A bit of background is necessary before getting into the facts of this case.  Typically in BC Personal Injury Cases from car accidents ICBC insures both the Plaintiff and the Defendant.  This is so because ICBC is a statutory insurer with certain monopoly privileges so they insure almost all vehicles in British Columbia.  In some circumstances, of course, other insurance companies are involved (for example when the offending party is an out of Province motorist).
In today’s case the Plaintiff was insured with ICBC for ‘no-fault benefits’ (also known as Part 7 benefits) and the operator of the offending vehicle was insured with Progressive.  The Plaintiff ran into problems with both companies and started a lawsuit against ICBC for no-fault benefits which were allegedly outstanding and also made a tort claim against the motorist insured with Progressive.
The tort case apparently settled for “79,605.50 plus costs of no more than $19,767.13″.  The parties then apparently settled the costs amount with Defence Counsel writing to Plaintiff’s counsel stating
I have instructions to accept your offer to settle the costs.  The adjuster will be forwarding to your office a cheque in the sum of $97,936.70 Cdn to cover the settlement including costs.  The funds will be sent on your undertaking not to release any part of them to the plaintiff until the Release and Consent Dismissal Order that I plan to fax to you today are fully executed, and on your further undertaking to return the executed documents to me as soon as reasonably possible
A few days later counsel for the Plaintiff responded stating that the Plaintiff “was not prepared to execute the release because it referred to a “Part VII action”.  It stated that the defendant was released from all claims:”
The parties tried to resolve their differences but could not.   The Plaintiff brought an application for an order to enforce the settlement agreement that was allegedly reached.  Mr. Justice Williamson refused to do so finding that the Plaintiff had repudiated any settlement agreement that may have been reached.  The courts key reasoning is set out at paragraphs 14 – 20 of the judgement which I reproduce below:

[14]            The plaintiff relies upon Cellular Rental Systems Inc. v. Bell Mobility Cellular Inc., [1995] O.J. No. 721 (Ct. J. (Gen. Div.)). At para. 24 of that decision, Chapnik J. stated:

It is well established that settlement implies a promise to furnish a release unless there is agreement to the contrary.  On the other hand, no party is bound to execute a complex or unusual form of release: although implicit in the settlement, the terms of the release must reflect the agreement reached by the parties.  This principle accords with commons sense and normal business practice.

[15]            And further, at para. 36, the learned judge stated:

The onus is on the party claiming repudiation to show that the disagreement consequent upon the settlement constitutes a repudiation of it.  Subsequent disputes should be resolved by application to the court or by common sense within the framework of the settlement to which the parties have agreed and in accordance with the common practices which prevail amongst members of the bar.  It will be rare for conduct subsequent to a settlement agreement to amount to repudiation.

[16]            In so stating, Chapnik J. referred to a decision of McEachern C.J.B.C. in Fieguth v. Acklands Ltd. (1989), 59 D.L.R. (4th) 114, 37 B.C.L.R. (2d) 62 (C.A.).  In Fieguth, the Chief Justice noted that once there has been an agreement, one party can tender whatever documents thought appropriate to complete the agreement without actually rescinding the settlement.  At page 121, the Chief Justice stated:

If such documents are accepted and executed and returned then the contract, which has been executory, becomes executed.  If the documents are not accepted then there must be further discussion but neither is released or discharged unless the other party has demonstrated an unwillingness to be bound by the agreement by insisting upon terms or conditions which have not been agreed upon or are not reasonably implied in these circumstances.

[17]            Here, the release documents were not accepted.  There was further discussion.  The question is, in the words of McEachern C.J.B.C. as stated above, has one party demonstrated an unwillingness to be bound by the agreement by insisting upon terms or conditions which have not been agreed upon or are not reasonably implied?

[18]            I conclude that is the circumstance here.  The parties appear to have agreed to settle the matter for $97,936.70 Cdn.  However, when the necessary documents, in particular the release, was forwarded to counsel for the plaintiff, the plaintiff declined to execute the release unless something was done about the plaintiff’s right to continue with the other action against ICBC. 

[19]            I have referred to the December 1, 2008, email from counsel for the plaintiff to counsel for the defendant.  In my view, the wording of it is clear.  It states “my client will sign a full release once she has been compensated for Part 7’s in the sum of $7,000”.  In other words, the plaintiff took the position that she would not complete the November 19 agreement unless she was paid an additional $7,000 or, presumably, the defendant agreed that she could continue her action against ICBC.  I conclude that to take such a position is to repudiate the agreement allegedly reached on November 19. 

[20]            In the circumstances, the plaintiff’s application is dismissed.  The defendant will have its costs.