Class Dismissed! Federal Court of Appeal Rejects Class-Based Public Interest Privilege

February 9, 2018

The Federal Court of Appeal (“FCA”) recently ruled that records provided by third parties to the Competition Bureau (“Bureau”) used in investigations are not covered by a blanket (or “class”) public interest privilege. Whether public interest privilege applies now must be determined on a case-by-case basis. The decision has important ramifications for litigants and third parties.

Background

In September 2016, the Commissioner of Competition (“Commissioner”) filed an application against Vancouver Airport Authority (“VAA”) under the abuse of dominance provisions of the Competition Act (the “Act”). At the documentary production stage, the Commissioner withheld approximately 9,500 documents on the basis of public interest class privilege, a number that was ultimately reduced to 1,200 documents. VAA brought a motion to the Competition Tribunal (“Tribunal”) seeking disclosure of the withheld documents, submitting that the alleged class privilege did not exist.

The Tribunal dismissed VAA’s motion on the basis of prior cases that recognized a public interest class privilege. VAA appealed the decision to the FCA.

The FCA’s decision

In its decision, released on January 24, 2018, the FCA allowed VAA’s appeal, holding that the Commissioner does not have a public interest class privilege over third party records, and remitting the disclosure motion back to the Tribunal.

Justice Stratas, writing for the Court, rejected the existence of public interest class privilege for several reasons:

  • Prior cases were determined on the basis of a different standard of review. Stratas J.A. noted that prior cases in which the FCA upheld public interest class privilege were decided at a time when Tribunal decisions were assessed on a lower, more deferential standard of review. Accordingly, the FCA did not affirm the existence of a class privilege – it merely accepted that the existence of such a class privilege was a reasonable decision open to the Tribunal. As held by the FCA in Superior Propane, and later confirmed by the Supreme Court in Tervita Corp., the Tribunal’s determinations on questions of law should now be evaluated on a standard of correctness.
  • Supreme Court of Canada has closed the door on recognizing new class privilege categories. As a result of the Harkat decision, in which the Supreme Court held that security intelligence informants were not protected by a class privilege, Stratas J.A. found it was “now practically impossible” for a court to recognize a new category of class privilege, absent legislative action.
  • No legislative intent to create new class privilege. Stratas J.A. found it noteworthy that public interest class privilege was not enshrined in the Act, considering its other confidentiality protections, such as those: requiring inquiries to be private; allowing third parties to claim solicitor-client privilege; and requiring the Bureau to keep confidential information provided voluntarily pursuant to the Act. This indicated that lesser measures could adequately protect confidentiality, without the need for a more sweeping public interest class privilege.
  • Class privilege not necessary for relationship with third parties. To establish a class privilege, the Commissioner would need to show that anything less than blanket confidentiality protection would substantially impair its relationship with third party sources. The Commissioner argued that, in the absence of such a blanket privilege, third parties might fear reprisals, deterring them from bringing complaints. However, no evidence was filed in support of this position. Stratas J.A. found the Tribunal erred in appearing to assume that the prerequisites of the class privilege were met without any evidence, and noted that there were alternative means to protect third party information, such as redactions, confidentiality undertakings, sealed volumes of documents or in camera sessions

Implications

The Bureau stated that it will not appeal the FCA’s decision.

The Bureau can still assert public interest privilege on a case-by-case basis. To claim this privilege over a document in legal proceedings, the Bureau would need to satisfy the four part “Wigmore” test, including establishing that the public interest in confidentiality outweighs the public interest in truth-seeking. The Bureau may also use the other mechanisms at its disposal under the Act, such as confidentiality orders, to protect documents from public disclosure.

The decision has several implications. Parties litigating against the Commissioner will almost certainly have access to a wider range of records. It is possible that documents supplied by third parties to the Commissioner may also be produced to litigants, at least in redacted form – although disclosure was always a possibility given the privilege belonged to the Commissioner and could be waived. That said, the decision brings the Bureau’s practices in line with other jurisdictions, including the U.S.

The decision is also important as it comes at a time when the law of privilege is in flux. In another case anticipated to be released in the coming months (Iggillis Holdings Inc. v. Canada), the FCA is expected to weigh in on common interest privilege.

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