Is that “Confidential” Investigation Report actually Confidential?

May 2016

Article by: Graeme McFarlane

If not set up properly, that “confidential” investigation report may not be so confidential after all. An Ontario arbitrator has ruled that an investigation report prepared by a lawyer is not covered by solicitor-client or litigation privilege as a matter of right. In Durham Regional Police Association v Durham Regional Police Services Boardthe arbitrator ordered production of an investigation report to the union which was dissatisfied with the employer’s handling of a harassment situation. However, a different result may have followed if the investigator’s terms of reference had explicitly reserved privilege. This case demonstrates the importance of carefully drafting the investigator’s terms of reference before embarking on a workplace investigation.

In the Durham decision, the employer received two harassment complaints against a manager. It appointed an external investigator who was a lawyer but not the employer’s usual labour relations counsel. The terms of reference for the investigation were set out in a retainer letter provided to the employer by the investigator. While the letter expressly mentioned that the resulting report would be confidential in order to encourage witness participation, it was silent with respect to the provision of legal advice and to any solicitor-client privilege.

The investigation proceeded and the investigator delivered a report in which she concluded that the complaints were substantiated. She subsequently met with the employer to discuss her findings and to provide advice regarding her recommended sanctions against the manager in question. The manager received a written warning, and he was required to undergo both human rights and supervisory skills training. The complainants were advised that an independent investigation had taken place, that their complaints had been substantiated, and the details of the corrective action imposed. However, they were told that the investigation report itself was privileged and confidential and would not be disclosed.

The union was not pleased with the employer’s actions and it filed a grievance alleging that the employer had failed to provide a harassment free workplace, had failed to adequately investigate the complaints, and had not provided the investigator’s report. The decision was limited to this latter issue.

The employer resisted the production of the report saying that it had hired the investigator to both conduct the investigation and to provide legal advice. It said that the investigator had to reach legal conclusions that were “inextricably linked” to any findings of fact. In the alternative, the employer said that the report was covered by litigation privilege because there was a strong likelihood that the events in question would lead to litigation (which they ultimately did).

The union argued that the report should be produced because the terms of reference appointed the investigator as an information gatherer rather than as legal counsel. It argued that the sole fact that a lawyer was involved did not convert the outcome into legal advice. Indeed, the union said that the fact that a union representative was present during many of the investigation interviews entirely defeated any claim of solicitor-client privilege. With respect to the litigation privilege point, the union argued that the report was not prepared with the primary purpose of preparing for litigation so the privilege did not attach.

The arbitrator held that the report should be produced. She quickly dealt with the litigation privilege issue by saying that she did not find the predominant purpose of the report to be related to litigation and therefore there was no such privilege. The analysis of the solicitor-client privilege issue was the real substance of the decision.

The arbitrator applied the four part test for solicitor-client privilege in Slansky v. Canada (Attorney General):

  1. it must have been between a client and solicitor;
  2. it must be one in which legal advice is sought or offered;
  3. it must have been intended to be confidential; and
  4. it must not have had the purpose of furthering unlawful conduct.

The arbitrator held the fourth aspect to be irrelevant and aspects one and three to have been met. She focussed on the second part of the test.

The arbitrator held that the second branch had not been met as the investigator was not providing legal advice as an independent third party investigator. Indeed, she noted that if the relationship were to be cloaked in privilege, the lawyer’s independence as an investigator would have been lost as she would have been primarily providing legal advice to the employer. She further held that if the employer wanted the report to have been covered by solicitor-client privilege it should have specified that in the retainer.

[The investigator] did not agree to provide legal advice when she agreed to advise the [employer] as to whether its policies were violated. As noted above, when a lawyer is retained to conduct an investigation in relation to providing legal advice the parties will be clear about that. In any case, merely advising whether an internal policy was violated is not necessarily legal advice. It might be legal advice if it is part of a discussion about liability and litigation strategy but this retainer does not contemplate that.

This case highlights the importance of carefully drafting terms of reference when engaging an investigator. If an employer wishes to keep a report confidential through the use of privilege, the retainer must be drafted in a way that preserves that right. Although it is often the case that an investigation must be started quickly, this is not an aspect to rush.