Protecting the Results of Your Internal Investigation
You have done the right thing by going to the time and expense of finding out what caused a major spill of chlorine from your facility. Workers have been interviewed and documents collected. A consultant retained by the company has produced a report that contains conclusions about what the company did right to prevent such a spill, in addition to what it failed to do. You intend to distribute the report to the company’s leadership so that, with the benefit of hindsight, steps can be implemented to minimize the risk of another spill in the future.
Some weeks later, an investigator with the Ministry of the Environment (MOE) telephones you. She advises that an investigation of the spill has commenced. As a first step, she wants you to produce copies of all documentation relevant to the spill, including the internal report she “believes” was completed on the company’s behalf. If the company does not produce the report, she says she will obtain a search warrant authorizing its seizure. What options have you?
Surprisingly, this is a scenario that crystallizes all too often in regulatory investigations. Although the report may have been completed in confidence, absent the company having retained and instructed a lawyer to complete the report for the purpose of providing legal advice, the report cannot be protected from disclosure through the shield of solicitor-client privilege.
Solicitor-client privilege is recognized in Canadian law as a principle of fundamental justice protected by the Charter. It is rooted in the constitutional guarantee of procedural fairness for companies and individuals who are under investigation by a law enforcement agency or have been charged with offences. In order for a potential defendant or defendant to properly exercise its rights to retain and instruct counsel and to be presumed innocent, it is essential that the defendant have the right to communicate information to counsel on a confidential basis without fear that the communicated information and legal advice be disclosed.
Privilege not only protects from disclosure legal advice between counsel and clients, but also the information counsel has collected for the purpose of crafting that advice. Counsel can be either external or in-house; it is not necessary that external counsel be retained from whom the request for a completed report originates. What is important, however, is that:
1. counsel sub-retains the consultant for the purpose of conducting a confidential investigation to provide counsel with the information he/she requires to provide advice to the company in relation to the legal issues arising from the potential offence;
2. confidential terms of reference are drafted for the investigation stressing both its confidential nature and purpose to assist the company in obtaining legal advice;
3. the consultant acknowledges receipt of the terms in writing;
4. employees who meet with the consultant are advised as to the confidential nature of the process; and
5. all copies of the final report and any other documents generated by the consultant over the course of the investigation, are marked “Privileged and Confidential” and provided to counsel.
In the hypothetical above, had the company followed this procedure, the sealed report could have been brought before a justice with the authority to sustain a claim of privilege by ordering that the MOE was not permitted access to the report
One important caveat: Privileged reports can only be used to protect documents created during the internal investigation. A claim of privilege cannot be used to prevent the disclosure of routine business documents generated as part of the transaction or event under investigation.