Internal Investigations And Disclosure Of Sensitive Information: What Protections Can Legal Privileges Offer?

• Published date: 18 May 2020
• Author: Ms Sophie Melchers and Caroline Bélair
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Corporate and Company Law, Trials & Appeals & Compensation, Privilege
• Law Firm: Norton Rose Fulbright Canada LLP

Introduction

Companies conduct internal investigations for a variety of reasons. Internal complaints, legal actions or regulatory investigations, for instance, may trigger internal investigations. Internal investigations may assist companies with fact-gathering, risk evaluation, and identifying appropriate responses.

While internal investigations achieve laudable goals, they may also create legal risks when sensitive information surfaces during the investigation. The information gathered may indeed be relevant in the context of civil, regulatory or even penal proceedings.

Depending on the specific facts of each internal investigation, some or all of the documents generated during the investigation may be privileged, such that a company may refuse to disclose them.

It is therefore important to design and conduct internal investigations in light of the various legal privileges that may apply.

We review below three privileges that may apply to documents generated during an internal investigation:

• solicitor-client privilege (also called legal advice privilege)
• litigation privilege
• case-by-case privilege (application of the Wigmore criteria)

Privileges relevant to internal investigations

Solicitor-Client Privilege

Solicitor-client privilege allows for full and frank communications between those who need legal advice and those who are able to provide it. Such confidential communications between client and solicitor are seen as fundamental to the proper administration of justice and are protected from disclosure in perpetuity.¹

Solicitor-client privilege applies when the following three criteria are met:

• there are communications between solicitor and client;
• that entail seeking or providing legal advice; and
• that are intended to be confidential by the parties.²

Solicitor-client privilege may apply to a broad range of communications relating to legal advice. Not every communication needs to be framed as a specific request for or giving of legal advice.³ For example, solicitor-client privilege has been found to apply to:

• investigative files created for the purpose of obtaining legal advice;⁴
• reports prepared by company representatives so counsel can provide legal advice;⁵
• a lawyer's investigation report when the lawyer's investigative work was inextricably tied to legal advice, rather than simply fulfilling a fact-finding function;⁶
• interviews conducted by a lawyer with employees of a corporation to investigate allegations of harassment by an employee, for the purposes of providing advice on disciplinary measures;⁷
• emails between employees that discuss legal counsel's advice;⁸
• in some cases, communications between lawyers and third-party experts. In the common law provinces, the third party must serve as a "channel of communication" between the client and legal counsel or play a function that is essential to...