Canada: Cyber Risk Management – Legal Privilege Strategy – Part 1

An organization's cyber risk management activities may result in sensitive communications and documents that the organization's personnel expect will remain confidential. Nevertheless, in many circumstances an organization may be legally obligated to disclose those communications and documents unless the organization is able to assert a legal right — called "legal privilege" — to not make the disclosure. This two-part bulletin discusses legal privilege and cyber risk management. The first part of this bulletin discusses cyber risk reporting and disclosure obligations and the basic rules for legal privilege. The second part of this bulletin (available on July 27, 2016) provides practical recommendations for a legal privilege strategy for cyber risk management activities.

REPORTING AND DISCLOSURE OBLIGATIONS

Data Security Incident Reporting Obligations

Data security incident reporting obligations may be imposed by statute, contract or generally applicable common law or civil law, and may specify when, how and to whom notice of a data security incident must be given. Failure to give timely notice of a data security incident may result in serious adverse consequences, including statutory sanctions, liability for breach of contract or breach of a duty to warn and loss of insurance coverage.

For example, the Canadian federal Personal Information Protection and Electronic Documents Act will soon require an organization that suffers a breach of security safeguards that presents a "real risk of significant harm to an individual" to report the breach to the Privacy Commissioner, give notice of the breach to affected individuals and to certain organizations and government institutions, and keep and maintain prescribed records of the breach. The Alberta Personal Information Protection Act imposes similar data security breach notification obligations. Generally applicable common law and Québec's civil law may also require an organization that suffers a data security incident to warn individuals and other organizations if the warning would enable them to avoid or mitigate harm caused by the incident.

Commercial contracts often contain obligations to give notice of an unauthorized disclosure of confidential information and data. Cyber-insurance policies invariably require an insured organization to give the insurer prompt notice of any actual or reasonably suspected data incident suffered by the organization. The Payment Card Industry Data Security Standard, which is incorporated into contracts governing participation in payment card systems and applies to all organizations involved in payment card processing (including merchants who accept payment card transactions), imposes obligations to report incidents relating to the security of payment card data.

Other Disclosure Obligations

An organization's cyber risk management activities (including preparations for and responses to data security incidents) may be subject to contractual audits (e.g. by a business partner or service provider), regulatory investigations or proceedings (e.g. by a privacy commissioner or industry regulator) or civil lawsuits (e.g. by customers, business partners or shareholders). In those circumstances, the organization might be legally obligated to disclose all relevant documents and information, including documents that the organization's personnel expected would remain confidential.

For example, a party to a Canadian civil lawsuit is required to disclose to the other parties all documents in the party's possession, power or control that are relevant to the issues in the lawsuit. Similarly, Canadian privacy commissioners are authorized to conduct investigations and to compel organizations to disclose relevant documents and information. In each of those situations, the fact that a document was expected to remain confidential is generally not a lawful basis for refusing disclosure.

Legal Privilege — General Principles

In limited circumstances, an organization might be able to assert a legal right — called "legal privilege" — to refuse to disclose certain kinds of communications and documents. There are two kinds of legal privilege under Canadian law that might be applicable — "legal advice" privilege and "litigation" privilege. Each kind of privilege is different in purpose, scope and duration. Communications and documents might be protected by either or both kinds of privilege, depending on the circumstances. An organization that asserts legal privilege over a communication or document has the burden of proving that the privilege applies.

Legal Advice Privilege

Legal advice privilege (also known as "solicitor-client privilege") is a fundamental principle of justice and a substantive legal principle that is almost absolute. The privilege applies to confidential communications (written and oral) between a lawyer and client for the purpose of seeking or giving legal advice. The purpose of the privilege is to protect the lawyer-client relationship so that clients are able to confide in their lawyers to obtain proper legal advice. The privilege applies to communications between a lawyer and client, and usually not to communications with other persons. The privilege applies any time a client seeks legal advice from the lawyer, regardless of whether or not litigation is ongoing or anticipated. The privilege lasts unless and until it is waived by the client.

Litigation Privilege

Litigation privilege (also known as "work product privilege" or "lawyer's brief privilege") is a procedural rule of evidence that is not absolute. The privilege applies to communications and documents created for the dominant purpose of use in connection with ongoing or reasonably anticipated litigation. The purpose of the privilege is to provide a litigating party and its lawyers with a "zone of privacy" necessary for the proper functioning of the adversarial litigation process, so that lawyers may prepare for litigation without risking disclosure of their legal opinions, strategies and other work product. The privilege applies to communications and documents between a lawyer and client and to certain kinds of communications and documents between a lawyer and third parties (e.g. technical experts). The privilege applies only if a communication or document was made for the "dominant purpose" (but not the sole purpose) of use in connection with ongoing or reasonably anticipated litigation. The privilege lasts until the relevant litigation and any closely related litigation (i.e. the same or related parties and the same or related disputes) have ended or the privilege is waived by the client.

Waiver of Privilege

A client may waive the client's right to assert legal privilege over communications and documents. Waiver of privilege ordinarily requires the client to knowingly and voluntarily demonstrate, by words or conduct, an intention to waive privilege. Nevertheless, privilege can also be waived inadvertently or implicitly in circumstances where fairness and consistency require it. For example, legal privilege over a communication or document might be waived if some or all of the communication or document is disclosed to other persons.

LEGAL PRIVILEGE — SPECIFIC ISSUES

Investigation Reports

An internal investigation report might be protected from disclosure by either or both of legal advice privilege (to the extent that the report is a confidential communication between lawyer and client relating to the seeking or giving of legal advice) or litigation privilege (to the extent that the report was prepared for the dominant purpose of ongoing or reasonably anticipated litigation). The application of legal privilege to investigation reports can sometimes be complicated, because an investigation that begins with a business purpose (e.g. discovering the cause of an incident) might evolve into an investigation for a legal purpose (e.g. preparing for reasonably anticipated litigation relating to the incident). Also, in some situations, an investigation report might have discrete parts — some protected by legal privilege and others not protected.

In some situations, uncertainty regarding the application of legal privilege might be avoided by conducting two separate investigations of the same incident — an investigation for business purposes (resulting in communications and documents that are not privileged) and a separate investigation for legal purposes (resulting in communications and documents that are privileged).

In-house/External Lawyers

Legal advice privilege can apply equally to legal advice provided by an in-house lawyer or by an external lawyer, provided the advice is legal advice (as opposed to business advice) given by the lawyer in his or her capacity as a legal advisor (as opposed to as a business executive, investigator or other non-legal advisor). Similarly, litigation privilege can apply equally to communications and documents created by or at the request of an in-house lawyer or by an external lawyer, provided the communications and documents are for the dominant purpose of litigation (as opposed to another purpose). It is often easier to establish legal privilege over communications and documents created by external lawyers (who are usually retained to provide legal advice or to act as counsel in litigation) as opposed to communications and documents created by in-house lawyers (who often act as business executives or business advisors).

Disclosures to Government Agencies

An organization that suffers a data security incident might consider going beyond its legal disclosure obligations and voluntarily disclose investigation reports and related documents (e.g. expert consultant reports) to law enforcement, privacy commissioners and other government agencies. While there might be some practical benefit to those kinds of voluntary disclosures, it is important to bear in mind that the disclosures might result in a waiver of legal privilege over the disclosed documents. In addition, the recipient government agency might be subject to access to information laws that require the agency to make the disclosed documents and information available to a member of the public (including the media) who makes an access request.

LEGAL PRIVILEGE STRATEGY FOR CYBER RISK MANAGEMENT

Cyber risk management involves the creation of many kinds of sensitive communications and documents that might be protected by legal privilege, depending on the purpose of the communication or document and the circumstances surrounding the creation and use of the communication or document. A legal privilege strategy is designed to enable an organization to establish legal privilege where appropriate. The second part of this bulletin provides practical recommendations for a legal privilege strategy for cyber risk management activities.

About BLG

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Miller Thomson LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Miller Thomson LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
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).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions