A recent Ontario decision by Justice Perell has analyzed when
class members will have waived privilege over solicitor-client
communications. The decision emphasizes the breadth of consequences
of certification for class members beyond the determination of
common issues. target=_blank
The class was made up of investors in a timeshare program that
was expected to provide tax benefits. The class had received tax
opinions from a law firm, Cassels Brock & Blackwell LLP. The
Canada Revenue Agency, however, disallowed the expected tax
The class then sought opinions from a second law firm,
Thorsteinssons LLP, with respect to litigating the CRA's
decision in the Tax Court of Canada.
The class later sought a third set of opinions from a third law
firm, Davies Ward Phillips & Vineberg LLP, this time with
respect to the investors bringing litigation against Cassels
An action for professional negligence and negligent
misrepresentation was started by the investors against Cassels
Brock, which was certified as a class proceeding.
The Motion For Production of Privileged Documents
Post-certification, the parties engaged in document production.
Initially, the representative plaintiff produced only 10 documents
in total, none of which were the communications either with
Thorsteinssons or Davies.
The defendant law firm, Cassels Brock, brought a motion for
production of the communications between class members and both
Thorsteinssons and Davies. For the purposes of the motion, the
documents were provided to the motion judge in a sealed
The Decision: Privilege Was Waived
The motion judge, Justice Perell, began his analysis by finding
that the communications with Davies were not relevant to the common
issues. The advice related to bringing the class action itself, not
to the events that were at issue.
On the other hand, the correspondence with Thorsteinssons was
found to be relevant to the common issues, in particular to the
issues of damages and mitigation. Class members had sought
Thorsteinssons' advice to salvage the situation and eventually
negotiate a settlement with the CRA.
While all the parties agreed that the communications were
privileged, Justice Perell went on to determine that the class
members had waived privilege over them.
The representative plaintiff had alleged professional negligence
against his former lawyer, Cassels Brock. By not opting out, the
class members were taken to have adopted the pleadings. Where there
are allegations of professional negligence, the class members
waived any solicitor-client privilege to the extent necessary for
the law firm to defend itself. Fairness dictated that this include
communications with other lawyers, as was the case here.
The decision shows the potentially wide implications for class
members of remaining in a class action, that they are taken to have
adopted the representative plaintiff's pleadings and all that
this entails as far as waiver of privilege is concerned. The
decision also takes a broad approach regarding the scope of waiver
when allegations of professional negligence are made against a
lawyer, an area of case law Justice Perell noted was still
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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