Canada: Privacy In Cross-Border Litigation

Last Updated: December 12 2007
Article by Lisa Talbot and Kate Wilson

Published in the November 2007 issue of the Lexpert Guide to the Leading U.S./Canada Cross-border Litigation Lawyers in Canada

Privacy Compliance In The Context Of Canadian Litigation: Reaching A Reasonable Accommodation

Since 2004, Canadian businesses have been subject to the Personal Information Protection and Electronic Documents Act (PIPEDA), federal legislation that regulates the collection, use and disclosure of personal information in the context of commercial activity. This statute applies across Canada, except in three provinces (British Columbia, Alberta and Quebec) where provincial legislation deemed to be "substantially similar" to the federal Act displaces PIPEDA. For the rest of the country, however, including Ontario (which is home to Toronto, Canada’s largest commercial and financial center), PIPEDA is the source of privacy-related obligations for the private sector.1

This relatively new privacy regime has important implications for the practice of litigation in Canada. Given the volume of cross-border litigation between Canada and the United States, it will be helpful for U.S. counsel to be aware of the privacy rights and obligations in Canada. Litigation counsel need to be familiar with both their clients’ and their own obligations under privacy legislation before, during and after litigation. For counsel practicing in jurisdictions that are not subject to a similar general privacy regime, the Ontario experience can help illustrate the potential impact on litigation of the adoption of broadly applicable privacy legislation.

Overview of PIPEDA

Under PIPEDA, "personal information" is broadly defined and includes any information about an identifiable individual. Before organizations may collect, use or disclose someone’s personal information, they must obtain the consent of that individual. PIPEDA sets out various other obligations, including a general obligation to limit collection, use and disclosure of personal information.

Canada’s consent-based privacy regime, with its emphasis on limiting collection, use and disclosure of personal information is at first glance incompatible with the litigation process, in which broad collection, use and disclosure of information, including personal information, is often required. Furthermore, it is questionable whether the adversarial nature of litigation is compatible with a consent-based privacy regime. To add to this tension, in many jurisdictions, including Ontario, the trend has been toward increased disclosure of information through the discovery process – a trend that is distinctly at odds with the obligation under PIPEDA to minimize collection, use and disclosure. How then can privacy rights and obligations be reconciled with a party’s rights and obligations in the context of litigation?

PIPEDA provides no general exception to the consent requirement in the context of litigation. Instead, it offers a series of discrete and sometimes awkward exceptions that apply separately to the collection, use and disclosure of personal information. We outline a few of the exceptions most relevant to the litigation process and offer some additional means of ensuring that litigation-related use of personal information does not contravene the Act.

Breach of an Agreement or Contravention of a Law

PIPEDA is unhelpfully silent regarding whether personal information may be collected, used or disclosed during the course of an initial investigation, when litigation may be contemplated but not yet initiated. The Act does, however, allow an organization to collect personal information without consent in two contexts: to investigate a breach of an agreement or a contravention of a federal or provincial law. This exception is available only if the collection of the information with the knowledge or consent of the individual concerned could reasonably be expected to compromise the availability or accuracy of the information sought.

The reference to "breach of an agreement" makes this a broad exception. It potentially covers a wide range of preliminary investigations in the commercial context where an agreement may have been breached. In addition, the reference to "laws of Canada or a province" has been interpreted to include not only federal and provincial laws, but also the common law, thereby further broadening the scope of the exception.2

Having collected personal information under this exception, an organization can then disclose it to a named investigative body (which could be a professional governing body) or to a government institution, as long as the organization reasonably believes that the information relates to a breach of an agreement or a contravention of a law. The investigative body is then permitted by a separate exception to disclose the information as required in the course of its investigations.

Although the exceptions partially overlap, they do not relate seamlessly. Organizations engaged in investigative activity arguably face an unrealistic burden to match collection, use and disclosure of personal information to a particular exception at each step of an investigation.

Collection of a Debt Owed to the Organization

PIPEDA also allows for disclosure of personal information without an individual’s knowledge or consent if the organization seeks to recover a debt owed by the individual. The emphasis in this exception is on disclosure rather than collection, since the organization already possesses sufficient personal information to collect the debt, but needs to disclose that information to a third party – such as a collection agency. The privacy policies of many organizations expressly alert customers to the disclosure of personal information without consent in these circumstances.

Disclosure to a Lawyer Representing the Organization

An organization may disclose personal information without an individual’s knowledge or consent to a lawyer retained to represent the organization. The wording of this exception suggests that it would not cover a preliminary discussion with external counsel who has not yet been retained. For the exception to apply to in-house counsel, the wording suggests that the lawyer must be acting in a legal, as opposed to business, capacity. Although disclosure of personal information within an organization would not normally require consent, the exception for in-house counsel would be relevant where an organization wanted to disclose personal information to in-house counsel of an affiliated organization. PIPEDA does not grant any special status to affiliated organizations, and exchange of information between affiliates is considered disclosure between third parties.

Collection, Use and Disclosure as Required by Law

PIPEDA provides for related exceptions for collection, use or disclosure of personal information without consent where required by law. A strong argument can be made that this exception covers the collection, use and disclosure of personal information involved in preparing the statement of claim that initiates the litigation process. Even though a plaintiff "chooses" to begin litigation, it is still bound by the Rules of Civil Procedure as to how this is done. For example, in Ontario, a pleading must contain "a concise statement of the material facts on which the party relies for the claim or defense." Arguably then, a party to litigation, whether plaintiff or defendant, is entitled to disclose personal information in its pleadings to the extent that that personal information forms part of the concise statement of the material facts on which it will rely for its claim or defense. If this scope is observed, the use of personal information in a plaintiff’s pleadings can be said to be required by law and therefore permitted under the Act. For all subsequent steps in the litigation process, where the Rules clearly require the collection, use or disclosure of information, a party will be able to rely on the "required by law" exception to justify these actions without the individual’s consent.

Implied Consent

Once court proceedings have been initiated, it is easier to justify the collection, use and disclosure of personal information. In addition to the exceptions identified above, there is judicial support for the idea that in initiating proceedings, a plaintiff implicitly consents to the collection, use and disclosure of personal information by the defendant for the purpose of defending against the claim.3

The defendant can therefore claim that disclosure of personal information in its statement of defense is both required by law and permitted on the basis of the implied consent of the party who initiated the litigation. This implied consent argument, which is based on a broad interpretation of what constitutes consent under PIPEDA, provides an alternative to the narrowly framed exceptions to the consent requirement in the context of litigation.

It is unclear how far the notion of implied consent extends. There are indications that the Office of the Privacy Commissioner (OPC), the body that administers and enforces PIPEDA, may be reluctant to embrace a broad application of implied consent in the litigation context. Recently, plaintiffs in a civil suit complained to the OPC when they discovered that the defendant’s counsel had requested a credit check on them without their knowledge or consent in order to determine whether it made financial sense for the defendant to bring a counterclaim against them. Even though litigation had already been initiated by the plaintiffs/complainants, the OPC was unwilling to allow the collection of that personal information on the basis of implied consent.


Since PIPEDA’s enactment, the OPC has taken a keen interest in the privacy implications of surveillance activity.4 Outside the litigation context, surveillance will not breach PIPEDA in the following circumstances:

  • The surveillance is demonstrably necessary to meet a specific need.
  • It is likely to be effective in meeting that need.
  • The loss of privacy is proportionate to the benefit gained.
  • There is no means less intrusive of privacy to achieve the same end.5

In the context of litigation, surveillance of a plaintiff in a public place has been upheld on the basis of the plaintiff’s implied consent to the collection of personal information by the defendant, without reference to the four-part test.6 It is unclear whether similar surveillance undertaken in a more intrusive manner would be upheld on the same basis.7 Even where the implied consent argument would appear to apply, the four-part test serves as a useful reminder of the conditions under which surveillance has been deemed acceptable from a privacy perspective in other contexts.

Personal Purpose and Agency

Surveillance and other information collection activities undertaken on behalf of an individual defendant have also been upheld on the basis of agency.8 The work of an investigator or any "expert" who collects personal information on behalf of an individual for litigation purposes is not regarded as commercial activity that would trigger the application of the Act, but rather as collection of personal information for a client who in turn collects, uses or discloses the information for a "personal purpose" (i.e., the litigation). PIPEDA does not apply to the collection, use or disclosure of personal information for personal or domestic purposes. Under the "personal purpose" argument, even though the client clearly pays and retains the investigators, lawyers or experts who act as agents, the commercial aspect of their relationship does not alter the fact that the client’s purpose in requesting assistance is limited to bringing or defending litigation. The personal purpose argument applies only when the party seeking to rely on it is an individual, not an organization.

Despite judicial support for this argument, it is unclear to what extent it is accepted by the OPC. In the credit check case mentioned earlier, one of the parties relied on the personal purpose argument in asserting that its actions were not governed by PIPEDA. The OPC did not address this argument directly but did hold that the law firm’s decision to order a credit check on its client’s behalf was governed by PIPEDA and required the consent of the individual unless one of the exceptions applied. This decision suggests that the OPC expects to see reference to one of the specific exceptions to the consent requirement under the Act as opposed to a more general reliance on one of the arguments that have received judicial support. Since OPC decisions are not binding, however, parties are likely to continue to rely on arguments that the courts have supported, especially since they tend to provide parties with more flexibility in their dealings with personal information in a litigation context.

Compliance with the Rules of Court Relating to the Production of Records

A lawyer who is preparing an affidavit of documents in a file will review the scope and emphasize the importance of the disclosure obligation under the Rules with his or her client. Under Rule 30.02(1) in Ontario, "Every document relating to any matter in issue in an action that is or has been in the possession, control or power of a party to the action shall be disclosed … whether or not privilege is claimed in respect of the document." Complying with this Rule means that documents containing personal information may have to be disclosed. PIPEDA specifically permits disclosure in this context by allowing an organization to disclose personal information without knowledge or consent in order to comply with the rules of court relating to the production of records.

The Rules in Ontario also include their own limits on this disclosure in the form of the deemed undertaking rule. Rule 30.1.01(3) provides that all parties and their counsel are deemed to undertake not to use evidence or information obtained in the discovery process for any purpose other than the proceeding in which the evidence or information was obtained. This purpose-based rule is compatible with PIPEDA, which generally requires that consent to the use of personal information be tied to a particular purpose.

The deemed undertaking rule is subject to waiver, however, and it has previously been waived to allow a party to bring a complaint under PIPEDA regarding a party’s personal information practices. In a recent decision, the Ontario Superior Court waived the rule to allow a party to the litigation to bring complaints under PIPEDA regarding a private investigator’s collection of personal information without consent.9 The defendants became aware that questionable collection of personal information had taken place when they reviewed the plaintiff’s affidavit of documents. This ruling suggests that while courts will resist allowing privacy law requirements to interfere with the litigation process, the collection, use and disclosure of personal information in relation to litigation can still carry significant consequences under privacy legislation.10

Third Party Orders to Produce

Information that is important to a party’s case may occasionally be available only from third parties. Where the third party is an organization subject to PIPEDA and the information sought contains personal information, the organization is unlikely to provide that personal information unless ordered by a court to do so. The requested information could be as simple as contact information of a potential witness, but in the absence of a court order, the organization’s disclosure of the information without consent may not fall within any of PIPEDA’s exceptions. Where timeliness is critical, a party should anticipate such a response from an organization and be prepared to obtain a court order so that the organization’s disclosure is permitted under the Act.

A party may also be surprised to discover that in certain circumstances, obtaining a court order in favor of disclosure is more than a perfunctory matter. The Federal Court of Appeal recently set conditions for an order disclosing the names of individuals who were allegedly engaged in large-scale illegal downloading of music from the Internet.11 The Court held that where plaintiffs in such a case show they have a bona fide claim (in this case of copyright infringement), they have a right to know the identity of the persons involved for the purpose of bringing an action.12 The Court also suggested that the public interest in disclosure must outweigh the legitimate privacy concerns of the person sought to be identified if a disclosure is made. In granting such an order, a court should attempt to minimize the infringement of privacy rights involved. This might involve specific directions regarding the kind of information to be disclosed and the manner in which it can be used.

The Effect of a Breach of PIPEDA on the Admissibility of Evidence at Trial

A possible violation of PIPEDA has been rejected as a basis for barring the admissibility of evidence. The proper relationship between PIPEDA and the Rules seems to be that a breach of PIPEDA "has no direct impact on the issue of admissibility of evidence."13 A party that has concerns about privacy violations in the collection of personal information during the litigation process has recourse not within the litigation process but under PIPEDA, which provides that a complaint can be made to the OPC. While privacy concerns play a secondary role in a case where the evidence is clearly relevant and its probative value exceeds its prejudicial effect, these concerns may play a larger role and may indirectly affect the question of admissibility if either of these factors is less clear.14

Reconciling Access Rights and Litigation

A key principle behind PIPEDA is that of individual access to one’s personal information. This right of access has important implications for organizations that may be parties to litigation and for the law firms that store personal information on their behalf. At first glance, the access right under PIPEDA appears threatening in the context of litigation because it imposes no requirement that the request be relevant. Because of this broad scope, the access right can be used as a strategic tool in the litigation process by allowing a party to have earlier and fuller access to information than the discovery process under the Rules provides.

A review of decisions released by the OPC demonstrates that personal information access requests are being used in this way. The OPC has refused to treat access requests differently because litigation is contemplated or ongoing. Instead, the two processes of discovery and of access requests are viewed by the OPC as complementary processes, neither of which should affect the other.

It may be surprising to learn that law firms can be subject to such requests. The OPC’s experience with complaints made against law firms suggests that law firms frequently challenge the jurisdiction of the OPC to investigate complaints made against them and are sometimes surprised to find that they are subject to the Act in much the same way as other organizations. And like other organizations, law firms must appoint a Privacy Officer who will be accountable for the privacy practices of the firm, including its responses to requests for access.15

Exceptions to the Right of Access

Under PIPEDA, an individual has a prima facie right of access to any of his or her personal information held by an organization. The reality, however, is that various exceptions to this right of access allow organizations, including law firms, to maintain the confidentiality of much of the personal information in their custody.

An organization is not obliged to provide access to the information requested if it is protected by solicitor-client privilege or if it was generated in the course of a formal dispute resolution process. In addition, if the information was collected without consent because it related to the investigation of a breach of an agreement or the contravention of a law, the organization can also refuse to provide access to this information in response to a request. These three exceptions provide considerable protection from disclosure. The Federal Court of Appeal has held that the Privacy Commissioner cannot compel production of information protected by solicitor-client privilege for the purposes of ascertaining whether the claim of privilege is made out. The Federal Court does, however, have the ability to undertake such a review.16

Legislative Review of PIPEDA

PIPEDA contains a requirement for a five-year review of the legislation, and that review is now largely complete. The Canadian Bar Association participated in the public hearings held as part of this process and submitted, on behalf of its membership, that PIPEDA should be "neutral in regard to the litigation process" and that "[t]he current exceptions relating to litigation are too narrow" to ensure such neutrality. The resulting committee recommendations do not include the kind of exception reform that the CBA proposed, and it appears unlikely that this round of legislative review will yield significant changes to the current litigation-related exceptions. Despite this, early signs from the courts suggest that the litigation process and privacy compliance will remain parallel systems, each operating quite independently of the other. Rather than confine themselves to the awkward exceptions provided in the Act, courts will turn to broader arguments such as implied consent or personal purpose to justify the necessary collection, use and disclosure of personal information in the context of litigation. It is hoped, however, that the gradual emergence of judicial commentary on the interaction between PIPEDA and the litigation process, as well as the broader and more practical approach taken in jurisdictions with more recently enacted privacy legislation (such as British Columbia and Alberta), will eventually encourage federal legislators to consider replacing the current patchwork of exceptions with a more workable over-arching exception to the consent requirement in the context of litigation.


1. Ontario does have provincial privacy legislation, but it deals only with the protection of personal health information. Personal Health Information Protection Act, S.O. 2004, c. 3, Sched. A.

2. Ferenczy v. MCI Medical Clinics, [2004] O.J. No. 1775 (S.C.) at para. 33 [Ferenczy].

3. Ferenczy, supra note 2 at para. 31.

4. See, e.g., PIPEDA Case Summary #1 "Video surveillance activities in a public place". Online:

5. Eastmond v. Canadian Pacific Railway, 2004 FC 852.

6. Ferenczy, supra note 2.

7. See, e.g., Shred-Tech Corp. v. Viveen, [2006] O.J. No. 4893 (S.C.) [Shred-Tech], in which a private investigator posed as a prospective customer and secretly filmed within the business premises of a defendant. In the context of partially allowing a motion seeking an order waiving the deemed undertaking rule in relation to this

evidence, Gordon J. noted that he anticipated there would be "a serious challenge" on the question of admissibility at trial (para. 9).

8. Ferenczy, supra note 2 at paras. 30 et seq.

9. Shred-Tech, supra note 7.

10. Ferenczy, supra note 2 at para. 15.

11. BMG Canada Inc. v. John Doe, [2004] F.C.J. No. 525 (C.A.).

12.Ibid. at para. 42.

13. Ferenczy, supra note 2 at para. 15.

14. See, e.g., Shred-Tech, supra note 7.

15. See, e.g., PIPEDA Case Summary #367 "Need to establish procedures for handling access to personal information requests stressed." Online:

16. Blood Tribe Department of Health v. Canada (Privacy Commissioner), [2006] F.C.J. No. 1544 (C.A.); leave to appeal to the Supreme Court of Canada granted, [2006] S.C.C.A. No. 489.

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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