Does Litigation Privilege Apply to Communications Amongst the Board of Directors?
Litigation privilege prevents a party to litigation from having to disclose documents that were made in anticipation of or for the purpose of litigation. Litigation privilege ensures the efficacy of Canada’s adversarial process by giving parties a “zone of privacy” to conduct investigations and prepare for litigation.[1]
While solicitor-client privilege is broader in scope, litigation privilege is distinct in that it is not limited to confidential communications between a solicitor and client. Litigation privilege does not require a solicitor to be a party to the communications whatsoever. However, the courts have noted that litigation privilege, in comparison to solicitor-client privilege, is “less absolute, more fact-driven and subject to challenge.”[2]
A pertinent question then arises: does litigation privilege protect communications among directors of a corporation or society?
Litigation Privilege Criteria
The short answer is it depends. For litigation privilege to apply, the party asserting privilege must establish for each document over which privilege is being claimed:
(1) that litigation was ongoing or was reasonably contemplated at the time the document was created; and
(2) that the dominant purpose of creating the document was to prepare for that litigation.[3]
The two-prong test is objectively assessed, meaning very little consideration is given to the party’s subjective thoughts. The first prong of the test is assessed by asking: “Would a reasonable person being aware of the circumstances conclude that the claim will not likely be resolved without litigation?”[4] The analysis of the second prong is fact-driven, focusing on the surrounding circumstances in which the document was created.[5] Considerations in this analysis include “when [the document] was created, who created it, …and what use was or could be made of it.”[6]
How to Protect Directors’ Correspondence
If directors intend to rely on litigation privilege to protect their correspondence, they must ensure that the documents are created in the face of litigation, and that the dominant purpose of the documents is for the impending litigation. It is prudent practice for directors to specify that the dominant purpose of the document is for litigation. Additionally, directors should avoid including disparaging or irrelevant comments in the correspondence to maintain the dominant purpose of litigation.
[1] Blank v Canada (Minister of Justice), 2006 SCC 39 at paras. 27 and 34.
[2] Stone v Ellerman, 2009 BCCA 294 at para. 27.
[3] Gichuru v British Columbia (Information and Privacy Commissioner), 2014 BCCA 259 at para. 32.
[4] Raj v Khosravi, 2015 BCCA 49 at para. 11.
[5] Ibid, at para. 17.
[6] Birring Development Co. Ltd. v Binpal, 2021 BCSC 1298 at para. 31.
Contact Heath Law in Nanaimo for any questions.