The Precarious Nature of Investigation Records
The Alberta Court of King’s Bench, in Prosser v Industrial Alliance Insurance, 2024 ABKB 87 (“Prosser”), recently considered the issue of whether records created from a workplace investigation into harassment claims are covered by solicitor-client or litigation privilege. In this case, the investigation was conducted by an external human resources consultant.
This decision provides useful guidance for both employers and employees as to when a court will order the disclosure of third-party investigative records.
The Court also provides important direction about the circumstances where privilege may be implicitly waived, the purpose and boundaries of affidavits sworn by assistants on the advice of lawyers, as well as the obligations of corporate representatives to properly inform themselves in responding to questions and undertakings.
Background
The Defendant, Industrial Alliance Insurance (“Industrial Alliance”), terminated the Plaintiff for just cause in response to two allegations of harassment from fellow employees. Prior to termination, Industrial Alliance retained legal counsel for advice. A third-party human resources consultant was then retained to conduct an investigation in accordance with the employer’s Respectful Workplace Policy.
As part of the court action, the Plaintiff brought an application for disclosure of records including: the transcript and records of the Plaintiff’s interview; particulars of each employees’ allegations; witness transcripts; and interview notes (collectively referred to as the “Investigation Records”). Of note, the Plaintiff did not seek disclosure of the investigation report.
Industrial Alliance claimed that the Investigation Records were privileged, because the investigation was conducted both in contemplation of litigation and for the purpose of placing information before its legal counsel for advice.
Finding
The Court found that Industrial Alliance had not established that the Investigation Records were protected from disclosure by either litigation privilege or solicitor-client privilege.
Litigation Privilege
Records and documents may be protected by litigation privileges when the dominant purpose for which they are created is for use in contemplated or pending litigation. In reviewing Industrial Alliance’s affidavit of records, as well as two affidavits sworn by its corporate representative in response to the application, the Court noted that:
[74] Privilege claims in affidavits of records must ‘state the actual privilege being relied upon with respect to that record and describe the record in a way that, without revealing information that is privileged, indicates how the record fits within the claimed privilege. In this case, Industrial Alliance failed to prove that the Investigation Records were created for the purpose of obtaining legal advice or for the dominant purpose of contemplated litigation. The Court pointed to the absence from the affidavits of,
[78] … [A]ny suggestion that the Investigation, as opposed to the final Investigation report, was conducted for the purpose of obtaining legal advice or that underlying records such as witness interviews were created for the purpose of transmitting same to counsel or for the dominant purpose of contemplated litigation. Further, the Court noted the absence of evidence that the investigator:
- was used by the law firm as its “instrument to gather information”,
- worked closely with the law firm to investigate the facts; or,
- was included in privileged deliberations.[1]
Solicitor-Client Privilege
The Court acknowledged earlier Alberta decisions where solicitor-client privilege was upheld. These were circumstances where:
- witness statements of non-privileged events, or the assembly of existing records, “came into existence or were assembled for the sole purpose of communicating same to the lawyer in pursuit of legal advice” (emphasis added); or,
- the lawyer conducted the fact-finding investigation for the purpose of providing legal advice.[2]
The Court stated that,
[48] In my opinion, these cases do not necessarily apply to any fact investigation conducted by non-lawyer third parties into sources internal to the client, such as interviews of the client’s employees, where one of the purposes is to communicate the information to a lawyer to obtain legal advice and another purpose is in furtherance of non-privileged corporate operations such as required governance or financial operations. (emphasis added)The Court also indicated that fact-finding investigations by lawyers do not qualify for privilege unless they are related to the provision of legal advice. Even then, the Court noted that “solicitor-client privilege … does not necessarily apply to all aspects of a lawyer’s investigation”.[3]
Purpose of an Investigation
Prosser points out an important distinction between claims for privilege in circumstances where facts have been assembled for the sole purpose of acquiring legal advice and circumstances where an investigation serves more than one purpose. This is important in the context of workplace investigations, where it is not unusual for an inquiry to have two genuine purposes that are both privileged and non-privileged. For example, an investigation may be intended to ascertain information:
- which will be transmitted to legal counsel for the purpose of obtaining legal advice; and,
- for the purpose of conducting non-privileged corporate operations, such as gathering information for corporate governance and human resources purposes.
In this event, legal privilege will not necessarily override the other purposes.[4]
In Prosser, the Court found that Industrial Alliance failed to establish that the dominant purpose of the workplace investigation was to provide legal counsel with information to aid in the provision of legal advice, or that the investigator’s function was essential to the maintenance or operation of the solicitor-client relationship.
Additionally, it was noted that even if the Investigation Records were privileged, the Court would have found that this privilege was waived, because Industrial Alliance did not only deny the Plaintiff’s allegations in its Statement of Defence, but also relied on the Investigation Records to justify termination of the Plaintiff and claim that the investigation had been fair and reasonable.
Key Takeaways
The guidance provided by the decision in Prosser merits careful consideration by employers as workplace investigations are becoming more common. Terminated employees are increasingly likely to litigate and, in that process, seek disclosure of investigative records and reports.
Prosser stands for the principle that investigation records created by a third party for the sole or dominant purpose of communicating information to a client’s legal counsel, in order to provide legal advice, are likely privileged. However, if investigation records are created for additional, genuine purposes, such as the administration of a respectful workplace policy, then the records may not be protected by privilege.
In cases where privilege is claimed, courts can be expected to carefully scrutinize the affidavit of records, other affidavit evidence, the Statement of Defense, and retainer letters between lawyers and third-party investigators to determine the purpose for which records have been created and how they are being used.