Earlier today, the Crown stayed charges against Nestlé Canada Inc. and one of the company’s former executives, in the long-standing prosecution of Canadian chocolate manufacturers under section 45 of the Competition Act. This follows the staying of charges a couple of months ago against the other accused parties in this matter, which included Mars Canada Inc., ITWAL Ltd., and certain individuals. One party to the alleged conduct had obtained immunity in the matter and another had pled guilty and paid a fine of C$4-million. The staying of the charges against all remaining defendants closes a case that has been ongoing since 2007.
The case is of interest in that it has provided some helpful guidance on the Crown’s disclosure obligations relating to information received from parties that participate in the Competition Bureau’s (Bureau) Immunity or Leniency Programs. These programs allow parties to obtain immunity from prosecution (no fines or jail terms) if they are the first to approach the Bureau to report criminal anticompetitive conduct, or lenient treatment in the case of leniency applicants (such as reduced fines and jail terms) who approach the Bureau later.
An important issue that arose in this case was whether information in the hands of the Crown and the Bureau obtained from immunity and leniency applicants, had to be disclosed to the accused. Immunity and leniency applicants had provided information to the Bureau as part of their cooperation obligations under the Bureau’s Immunity and Leniency Programs. This included information drawn from corporate documents and from interviews that had been conducted with officers and employees of the corporations.
In an application earlier this year, Justice I.V.B. Nordheimer had been asked to consider whether the information provided by cooperating parties was protected by settlement or solicitor-client privilege or whether such considerations were overridden by the accused’s constitutional right to full disclosure. The conclusions reached by Justice Nordheimer are consistent with the position that the Bureau has taken for years in its Immunity and Leniency Programs — namely, that cooperating parties can expect that information provided by them to the Bureau will be treated confidentially, except where disclosure to an accused is required as part of a prosecution. Justice Nordheimer held that the Crown’s legal obligations under Stinchcombe require it to produce to the accused all information in its possession that is not clearly irrelevant. Thus, cooperating parties cannot expect that such information will be protected from disclosure in the event that other parties to the alleged conduct are prosecuted.
This case represents an important reminder for businesses. Although contested prosecutions in Canadian competition cases are rare, immunity and leniency applicants must appreciate that the information they produce to the Bureau may ultimately be disclosed to the accused, notwithstanding the confidentiality assurances that apply when the information is originally provided.