Corporations generally have an increasing burden to improve their social initiatives, environmental impact as well as accountability towards all third parties. Recently, the courts in Canada have rendered decisions that further increase the responsibilities of corporations in an area involving corporate integrity, corporate governance and general moral duties: the disclosure of privileged documentation with the authorities in the context of criminal investigations. The position of the Quebec courts on the issue of balancing the protection of the solicitor-client privilege and the moral duty of corporations to be transparent, especially in the context of investigation findings, could lead to an important development in trends across Canada and even the United States.
Attorney-client privilege
In Quebec, attorney-client privilege is enshrined in the Charter of Human Rights and Freedoms and thus has quasi-constitutional status. However, it is generally recognized that a secret once revealed is a secret no longer. This entails that a privilege is lost when the information, confidential to professional and client, is disclosed to a third party. This third party is then free to make what legitimate use he wishes of the information no longer confidential.
Due to the importance of attorney-client privilege, there are only a few narrow and strictly defined exceptions in which the communication of a privileged document to a third party does not have the effect of waiving the privilege and the confidentiality with regard to third parties[1]. Recently, the Quebec courts have been required to analyze the legal consequences of disclosing an investigation report to the authorities as part of a criminal investigation. Does such disclosure automatically result in the loss of attorney-client privilege with regard to all third parties?
Waiver of privilege and voluntary disclosure to law enforcement
Based on recent Quebec case law, the disclosure of a document subject to attorney-client privilege to police authorities to collaborate in a criminal investigation does not in itself result in the loss of confidentiality of the document with regard to other third parties. Indeed, the waiver of privilege in such a context will depend on the specific facts and context of a case. Any waiver of attorney-client privilege must be voluntary, clear and unequivocal, based on the factual context and circumstances applicable to each case. It will also be interpreted restrictively. Consequently, no particular formula, such as an explicit reservation of rights, is required when disclosing the report or document to the authorities in a criminal investigation.
In line with those rulings, it was decided that sharing privileged information with law enforcement, the Competition Bureau, or even a disciplinary board does not necessarily constitute a waiver of privilege against other third parties, because there is a moral duty to collaborate with those investigations. On the other hand, disclosing confidential information and reports outside the scope of investigations by the authorities and/or a moral duty of transparency, for example, in a proceeding or a detailed press release, still constitutes a risk with regard to a total or partial waiver of privilege.
Of note is that these findings are similar, if not identical, to those adopted by the Court of Appeal in England in the case of British Coal Corp v. Dennis Rye Ltd and another, the principles of which have been adopted in Canadian law. In this case, the court had to decide whether the communication of documents subject to attorney-client privilege to the police in the context of criminal proceedings concerning the same facts constituted a waiver of privilege. The Court answered this question in the negative, indicating that the disclosure of the documents was in accordance with the duty to assist in the conduct of the criminal proceedings, and could not be properly construed as an express or implied waiver of its rights.
It would therefore seem contrary to public policy that making documents available to regulators could have the effect of automatically removing the cloak of privilege which would otherwise be available.
Cooperation by corporations, privilege and confidentiality
A partial waiver of privilege to assist authorities in criminal investigations highlights the importance of the moral duty of corporations to disclose and share important and relevant information with the authorities without putting their rights and legal privileges in jeopardy. It also provides some assurances to corporations as to the preservation of legal privileges when they need to disclose certain information to third parties.
Moreover, police forces are required to maintain confidentiality in the conduct of their investigations, as explicitly provided for in section 28 of the Act respecting access to documents held by public bodies and the protection of personal information. Article 7 of the Code of Ethics and Professional Conduct for Public Administrators of the Anti-Corruption Commissioner also confirms UPAC’s duty of confidentiality.
Finally, increasing corporate collaboration with the authorities, by protecting the disclosure of privileged reports or documents in this particular context, could foster a national culture that attempts to reduce corruption, abuse of power and bribery, as well as increase accountability both in public and private corporate settings. This could in turn increase a country’s ranking with Transparency International, which is a global movement working in over 100 countries to end the injustice of corruption, and aiming to expose the systems and networks that enable corruption. Its mission includes demanding greater transparency, accountability and integrity in all areas of public life, as well as stopping corruption. Between 2023 and 2012, Canada’s score on the Corruption Perceptions Index declined from 84 to 76[2].
[1] For example, a disclosure made under duress or made by mistake
[2] Per the Corruption Perception Index, 100 is “very clean” and 0 is “highly corrupt”: https://www.transparency.org/en/cpi/2023