Québec Court Of Appeal Rules On Consequence Of Voluntary Disclosure Of Privileged Information Made To Law Enforcement In The Context Of An Investigation

• Published date: 23 November 2022
• Subject Matter: Accounting and Audit, Litigation, Mediation & Arbitration, Audit, Accounting Standards, Forensic Accounting, Disclosure & Electronic Discovery & Privilege, Trials & Appeals & Compensation
• Law Firm: Osler, Hoskin & Harcourt LLP
• Author: Mr Stéphane Eljarrat, Frédéric Plamondon and Emily Lynch

On October 17, 2022, the Québec Court of Appeal in Centre universitaire de santé McGill c. Lemay¹ (Lemay) held that the voluntary disclosure of a solicitor-client privileged forensic accounting report to a police force in the context of a criminal investigation did not constitute a waiver of said privilege.

The Court's ruling brings much-needed guidance for organizations faced with the dilemma of how to best protect the solicitor-client privilege that attaches to an investigation report when it is determined that such information should be shared with certain parties, such as independent auditors or law enforcement.

Factual background

The dispute arose in the context of contracts that were awarded for the construction of the MUHC's new hospital center. In September 2012, the Unité permanente anticorruption (UPAC), a specialized Québec police force tasked with fighting corruption, executed a search warrant at the MUHC offices following allegations of collusion and corruption in the awarding of such contracts.

An external lawyer was retained to provide legal advice to the MUHC in relation to these allegations. In the execution of his role, the external lawyer entrusted an accounting firm with a forensic accounting mandate, the whole for the purpose of allowing him to provide legal advice to his client. A preliminary forensic accounting report, which is at the heart of this dispute, was produced by the accounting firm as a result (the Report).

Once finalized, the Report was given to the external lawyer and to MUHC's chief executive officer (CEO). It was then presented viva voce to the members of the MUHC's Audit Committee, without such members receiving a copy of the Report. The members of the Audit Committee were informed of the confidentiality of the subject being discussed during the presentation.

At the end of said presentation, the CEO informed the Audit Committee members that he intended to transmit the Report to UPAC in the context of its ongoing investigation, for the purposes of collaborating with this police force in the interest of transparency.

The Report was then transmitted to UPAC by the MUHC's external lawyer in November 2013.

Procedural history

In May 2014, an access request was made to the MUHC to obtain a copy of the Report. This request was denied in June 2014. The individual making the request then applied to the Commission de l'accès à l'information (CAI) for a review of this decision.

The CAI dismissed the application for review and...