The recent decision in Plenert v. Melnik Estate, 2016 BCSC
403 provides an additional arrow in the quiver of insurers and
insureds seeking to claim privilege over investigative documents
and adjuster's reports prepared prior to the commencement of
The Plenert matter involved a motor vehicle accident in
which the Defendants commenced third party proceedings against a
road maintenance contractor, Emil Anderson Maintenance Co. Ltd.
("Emil Anderson"). At issue was whether Emil Anderson was
required to disclose preliminary reports and witness statements
prepared and obtained by its independent adjusters.
Emil Anderson argued that the documents at issue were produced
at a time at which litigation was in reasonable prospect and for
the dominant purpose of litigation – ie: they were protected
by litigation privilege. This claim of litigation privilege was
made despite the fact the initial e-mail reporting the incident to
the liability insurer was noted as being made out of an
"over-abundance of caution".
To bolster its position that all reports and witness statements
were protected by litigation privilege, Emil Anderson relied on
affidavits from its liability insurer and two independent adjusters
setting out their views that litigation was likely from the outset
and that the liability insurer only retains insurance adjusters to
conduct investigations and witness interviews in order to prepare
While Emil Anderson took the position that there was no
investigative stage in this matter, the Defendants argued that the
law established that there was a continuum to an investigation. The
Defendants stated that the documents at issue were prepared to
investigate the facts of the accident. Until those facts were
determined, litigation could not be said to have been in reasonable
 I think that, in third-party or tort claims (as opposed to
claims by an insured against his or her own insurer), there is no
preliminary investigative phase where privilege does not attach to
notes, reports and files of adjusters. In third-party insurance
claims, the sole reason for any investigation by or on behalf of an
insurer is because of the prospect of litigation. It is naive to
think otherwise; and the fact that the investigation may be used to
arrive at a pre-lawsuit settlement does not detract from the point
that I make. The prospect of litigation inherently includes the
prospect of settlement.
 I agree [...] that there is no purpose for the creation of
documents by an insurer in a tort context other than: (1) for
anticipated litigation; (2) for setting reserves; or (3) for
seeking legal advice. For completeness, I would add, as a corollary
to (1): for the purpose of settlement, which I see as inextricably
entwined with "anticipated litigation."
Despite the fact that there was clear evidence that the initial
reporting of the accident was out of an abundance of caution, not
the certainty or even likelihood of a legal action, not to mention
that the documents were prepared during the "early days",
Master Muir accepted Emil Anderson's claim of litigation
Master Muir held that the type and severity of the accident
along with the fact that another adjuster had made enquiries about
road maintenance were sufficient to make a finding that litigation
was in reasonable prospect at the time the documents were created.
She further relied on the affidavit evidence of the liability
insurer and independent adjusters to make a finding that the
dominant purpose for the creation of the documents was for
potential litigation. Master Muir concluded:
I do not go so far as to say that in all circumstances the
investigations of liability insurers will be privileged, but I am
satisfied that the documents in issue in this case are protected by
litigation privilege. There is no evidence that they were created
for multiple purposes. The evidence is that the only reason for the
investigation was to defend against potential litigation, which I
have found was reasonably in contemplation. That evidence is
supported by the limited role of the liability insurer in this
matter, which was to defend and indemnify Emil Anderson [...].
This decision will no doubt be of assistance to insurers and
insureds going forward in attempting to claim privilege over
adjusters' materials prepared even at the earliest stages of a
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