Courts extend privilege to non-lawyer deal team members

December 16, 2011

Earlier this year, the Ontario Superior Court heard a motion that considered whether solicitor/client privilege extends to documents shared with non-lawyers who participated in structuring a complex commercial transaction. The ruling in Barrick Gold Corp. v. Goldcorp Inc. is brief but expands on a point made in Camp Development Corp v. South Coast Greater Vancouver Transportation Authority.

In Camp Development, the B.C. Supreme Court held inter alia that solicitor-client privilege extends to communications between the defendant’s solicitor and another member of the client’s transaction team who was not a lawyer (a project manager). In that case, it was not that the project manager served merely as a conduit or “channel of communication” between solicitor and client (that being one way in which a third party could traditionally fall under the umbrella of solicitor-client privilege) but rather that his function was “essential to the existence and operation of the solicitor-client relationship”, a slightly different criterion arising from the leading case of General Accident Assurance Co. v. Chrusz. As implied in Camp Development, this is essentially a “deal team” exception, recognizing the “practical reality in major commercial projects where teams of individuals with focused expertise are assembled.”

In Barrick, meanwhile, the plaintiff contested a claim of privilege over documents containing the advice of various advisors from (for example) BMO and GMP Capital. Ultimately, the Court found that the non-lawyer advisers were

appropriately regarded as part of the "team" for the purposes of requesting, obtaining and/or receiving legal advice.

The documents make clear the particular input of a relatively small number of non-lawyer individuals outside the companies, whose input was necessary and appropriate to the consideration, structuring, planning and implementation of very complex transactions in a very short timeframe.

While accepting the general principle of Chrusz, Justice Campbell added:

I do not accept that there is to be expected a “deal team” extension of solicitor/client privilege in every complex commercial transaction where there is not a specific protocol that has been executed. In each instance the context, the parties and that framework for the establishment and maintenance of privilege must be established to the satisfaction of the Court.

To be privileged, then, the solicitor's advice should be targeted to those members of the team whose input is essential to the proper performance of the solicitor's role. An example given in the ruling is that of a former senior employee of one of the defendant companies, whose “institutional knowledge and wisdom” was required in order to develop the legal strategy for the transaction, in the view of Justice Campbell.

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