Companies undertaking internal investigations must take a number
of steps in order to ensure that documents produced in the course
of those investigations will be subject to privilege. Not all
internal investigations are privileged, even if carried out with
the knowledge of corporate counsel. Only those undertaken for the
dominant purpose of preparing for litigation or which entail the
seeking or giving of legal advice benefit from legal
Canadian cases such as Saturley v. CIBC World Markets
Inc. and Société Air France v. Greater
Toronto Airports Authority have held that when the results of
an investigation may have a bearing on business decisions or
changes to internal procedures, even where the report is prepared
with the involvement of in-house counsel, those alternate purposes
may lead to a determination that the investigation was not
undertaken for the dominant purpose of preparing for litigation.
American cases such as U.S. ex rel. Baklid-Kunz v. Halifax
Hospital Medical Centre have similarly suggested that
correspondence with in-house counsel which copies non-lawyers may
be deemed to have been for the purpose of business advice rather
than to seek or provide legal advice.
Similarly, investigations undertaken by non-lawyer third parties
such as auditors or private investigators will often not be
privileged. Under General Accident Assurance Company v.
Chrusz, solicitor-client privilege will attach to
communications with non-lawyer third-parties only "[w]here the
third party serves as a channel of communications between the
client and solicitor" or where the third party is performing a
function which is "essential to the existence or operation of
the client-solicitor relationship." Courts will similarly look
to whether a report was prepared by or at the behest of legal
counsel in determining whether it was undertaken for the dominant
purpose of preparing for litigation.
Best practices in order to maintain privilege in internal
investigations involve ensuring that investigations are requested
or initiated by legal counsel, documenting the purpose of the
investigation as it relates to the legal advice or litigation,
marking documents as privileged and confidential, ensuring
communications flow through counsel, avoiding dissemination of work
product flowing from the investigation, and minimizing the
involvement of non-lawyer employees and third parties.
While that agreement mandated export measures on Canadian softwood lumber exports destined for the United States, it also protected those lumber exports from the potential imposition of onerous import measures by the U.S.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).