The inadvertent disclosure of privileged documents is increasingly common in modern litigation. Both courts and leading texts have long recognized that “[w]ith rules of court now providing for the liberal production of documents … [the] accidental disclosure of privileged documents is bound to occur”: see Chapelstone Developments Inc. v Canada,2024 NBCA 96, quoting from the 1999 edition of Sopinka and Lederman’s text, The Law of Evidence in Canada.
Estate litigation is not immune to this danger. Whether inadvertent disclosure occurs due to a letter being faxed or emailed to the wrong party, or as part of the exchange of documents during the discovery process, it is imperative that counsel on both sides act swiftly when it appears that a document has been disclosed in error. In the words of Justice Ellies, “[t]he inadvertent disclosure of a privileged document by one side of a legal dispute to another is not unlike the transmission of an infection: the more quickly it is contained, the easier it may be to eradicate its harmful effect”: in White v. 123627 Canada Inc., 2014 ONSC 2682.
Both counsel who inadvertently disclose privileged material and opposing counsel who receive that material are subject to positive obligations upon realizing that an inadvertent disclosure has been made.
How to Proceed After Making an Inadvertent Disclosure
Once counsel who made the error realizes there has been an inadvertent disclosure, they should immediately assert privilege over the document, or documents, and request its return. While the loss of physical custody of a privileged document may result in the loss of privilege, inadvertent disclosure will not, in itself, automatically amount to waiver of privilege.
Upon being advised that privileged material was disclosed inadvertently, the recipient lawyer must promptly return the material, uncopied, and if possible, unread. If the document is not returned promptly, then counsel may bring a motion seeking its return, as illustrated by the proceedings in Dente et al v Delta Plus Group et al, 2023 ONSC 3376. If the recipient of the privileged material contests the motion, they are still required to cease any review or analysis of the document at issue until after the motion is heard.
How to Proceed After Receiving a Privileged Document Sent in Error
The process is similar if counsel realizes that they are in possession of privileged material. In Celanese Canada Inc. v. Murray Demolition Corp., 2006 SCC 36, the Supreme Court of Canada held that counsel is required to:
- Stop reviewing the material immediately;
- Return the documents promptly; and
- Notify opposing counsel of the extent of any review already undertaken.
More recently, in 0678786 BC Ltd v. Bennett Jones LLP, 2021 ABCA 62, the Alberta Court of Appeal clarified the protocol for counsel who receive privileged materials, directing that they are to:
- Seal up the privileged records;
- Not read them further, make no copies, and take no notes; and
- Return any copies or notes already made.
This protocol applies whenever there is a reasonable expectation that the documents are privileged. The Court of Appeal was also clear that if there is any uncertainty as to whether the documents are privileged, or whether privilege has been waived, the party in receipt of the documents is not permitted to use them. Instead, counsel should apply to the court for direction before taking any further steps.
This decision was also affirmed by the Supreme Court of Canada through the dismissal of an application for leave to appeal: see 0678786 BC Ltd, et al, v. Bennett Jones LLP, et al, 2021 CanLII 94827 (SCC).
Practical Implications
In Celanese Canada Inc., the Supreme Court emphasized that the mere possession of privileged material “creates a serious risk to the integrity of the administration of justice.” With this in mind, estate litigators who inadvertently receive privileged material should refrain from making use of such disclosure, and should not seek its formal production. Even using privileged materials indirectly – for example, to shape litigation strategy – may raise concerns about prejudice and fairness, leading to undesirable consequences.
Usually the appropriate remedy in “inadvertent disclosure” cases will be “an order requiring the document, which is clearly identified, to be deleted or returned and a direction that no use is to be made of it,” as noted by the Supreme Court in Celanese Canada Inc. However, the consequences can be much more severe if the privileged information is misused. For example, in Chan v Dynasty Executive Suites Ltd, 2006 CanLII 23950 (ON SC), a law firm was disqualified after conducting a detailed review of privileged documents that had been disclosed in error – despite repeated requests for their return. The Court found that there was a “real risk” that the confidential information would be used to the opposing party’s detriment, and that no remedy short of disqualification could adequately address the prejudice.
Similarly, in White v. 123627 Canada Inc., Justice Ellies removed counsel who kept a record that had been inadvertently disclosed and reviewed it extensively. These cases aptly demonstrate the high cost that may accompany a failure to return materials that were inadvertently disclosed, or the misuse of such material.
Given the potential consequences, it is clear that receiving inadvertent disclosure is not an opportunity to be leveraged by counsel, but rather, it is a risk that ought to be carefully managed by responding with restraint and integrity.
Thank you for reading, and have a great rest of your day!