In Defence Of Transactional Common Interest Privilege

On Oct. 31, 2019, The Lawyer's Daily published "Transactional common interest privilege: Not over till it's over," by Alexander Gay. Commenting on the Federal Court of Appeal's decision in Iggillis Holdings Inc. v Canada (MNR), 2018 FCA 51, Gay calls out Bay Street for its misplaced confidence that the threat to transactional common interest privilege created by the lower court's Iggillis decision (2016 FC 1352) has been neutralized by the Federal Court of Appeal's reversal of that decision. He suggests that transactional common interest privilege "undermines the administration of justice," and that it is only a matter of time before this "orphan privilege" is once again challenged in Canadian courts.

With the greatest of respect, the concerns expressed by Gay - and by the motions judge's decision in Iggillis - appear to be rooted not in the Canadian experience with the doctrine of transactional common interest privilege (or, as it might more usefully be called, the common interest waiver exception), but in concerns about the creation of some new privilege that would allow parties to shield from view the ordinary communications that occur in the course of a commercial transaction.

Properly understood, common interest privilege is not, itself, a privilege - it is a doctrine that allows parties who share a sufficiently common interest to share already privileged documents without losing the protection of that privilege. A common interest can exist by virtue of existing or contemplated litigation or, as was the case in Iggillis, a commercial transaction that both parties share an interest in consummating. Importantly, both transactional common interest privilege and litigation common interest privilege can involve the sharing of either litigation-privileged or solicitor-client privileged documents. However, it was only the transactional context of this sharing, rather than the litigation context, that was under attack in Iggillis. Notably, the motions judge's decision in Iggillis is an outlier in the Canadian legal landscape as being the only decision disclaiming the validity of the doctrine of transactional common interest privilege.

When we consider the policy rationale for transactional common interest privilege, it is important to recall that documents being shared under the rubric of common interest privilege must already be privileged in order to be protected. Far from undermining the administration of justice, protection of...