Federal Court Restricts Definition Of 'Commercial Activity' Under PIPEDA

State Farm Mutual Automobile Insurance Company v. The Privacy Commissioner of Canada et al., 2010 FC 736 On July 9, 2010, the Federal Court of Canada restricted the scope of the definition of "commercial activity" under the Personal Information Protection and Electronic Documents Act (PIPEDA), when it was asked to determine whether the provisions of PIPEDA apply to evidence collected by an insurer, on behalf of an insured, in a tort action.

Specifically, State Farm Mutual Automobile Insurance Company (State Farm) had used video surveillance to inquire about the activities of a third party (Plaintiff) who had brought an action against an insured of the insurer in connection with a motor vehicle accident (State Farm has a duty to defend such an insured pursuant to New Brunswick insurance laws). The Plaintiff subsequently made a request to State Farm that, pursuant to PIPEDA, all information collected in the course of its investigation be disclosed to him. State Farm indicated that PIPEDA did not apply and denied the request. The insurer had also claimed litigation privilege over the surveillance tapes and associated documentation. The Plaintiff subsequently complained to the Privacy Commissioner of Canada (Commissioner) who decided to proceed with an investigation in connection with the Plaintiff's complaints.

In this case, State Farm sought an application for judicial review to challenge the decision of the Commissioner to proceed with her investigation.

State Farm argued that such an investigation was not within the jurisdiction of the privacy legislation, which would compel the insurer to provide access to information that would otherwise be covered by solicitor-client privilege or litigation privilege. The Commissioner argued that because the relationship between the insurance company and the insured was for services paid, this was a "commercial activity" as defined in PIPEDA and therefore fell within the scope of her jurisdiction.

The Court found that, pursuant to...