Copyright 2008, Blake, Cassels & Graydon LLP
Originally published in Blakes Bulletin on Environmental Law, December 2008
"In anticipation of litigation and in order for us as your legal counsel to have information necessary to provide you with legal advice, we request that you immediately undertake a complete investigation of this incident."
Do these words, written to a company by its lawyer, properly establish a privileged solicitor-client relationship to protect all of the documents generated by the company's investigation of an environmental incident from seizure by enforcement agencies?
Recently, the British Columbia Supreme Court confirmed such language does protect a company from having its investigation materials seized and used against it by regulatory officials. Moreover, the court ruled that when a prosecutor challenges the existence of the privilege, it is not necessary for the company to have the author of every document prepared in the investigation swear in court (by affidavit or viva voce evidence) that each document was prepared for the dominant purpose of anticipated litigation.
The Supreme Court decision is a helpful outcome of an incident involving a collision of two trains that led to explosions, flames and the leak of gasoline and diesel fuel. The in-house counsel for the railway company immediately commissioned an investigation using language similar to the above, modified only slightly to reflect his role as in-house counsel. After environmental officers then seized some of the investigation documents, the company and the Crown appeared in court for a ruling on whether or not the documents were protected from seizure and disclosure to the investigators by the lawyer's claim of privilege.
The prosecutor argued that the company could only successfully assert its privilege claim over the documents if the author of each investigation document (there were several) swore they were all prepared for the dominant purpose of anticipated litigation. However, the court rejected the prosecutor's invitation to impose such an unwieldy requirement to the successful establishment of the privilege claim. Instead, the court ruled that a reasonable person with knowledge of the circumstances of the incident would conclude that litigation was a likely consequence, and that litigation would be reasonably contemplated each time an investigation document was created.
The court's ruling is a common sense approach to determining a privilege claim over an internal investigation conducted after an environmental incident. The ruling dispenses with the requirement that every investigation document author need testify that the document was created for the purpose of the investigation and in anticipation of litigation. Once a company lawyer launches an investigation process after the incident and each document is noted as being made for that purpose, a reviewing court is prepared to reasonably assume such documents were prepared in anticipation of litigation.
It is important for companies to pay attention to this British Columbia Supreme Court ruling and ensure that a privileged investigation is launched as soon as possible after an incident. It is also important not to establish investigations for other reasons. Experience suggests that parallel investigations tend to become intermingled as they progress, often because the information needed for one is identical to that needed for the other. This blurs the line between privileged and non-privileged material, and may place the entire privilege claim in jeopardy. Absent any statutory requirements, other investigations (such as for the purpose of learning to avoid problems in the future) should be postponed until well after the legal investigation is completed and should not involve the creation of documents for which a claim of privilege is sought. Taking any other approach to investigating an incident runs a serious risk of compromising a fundamental requirement to a successful privilege claim – that the dominant purpose of the investigation was to obtain legal advice in anticipation of litigation.
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