In R v Nestlé Canada Inc the Ontario Superior Court of Justice held that communications between corporations and the Competition Bureau during the proffer stage of the immunity programme or the leniency programme should not be protected by settlement privilege.

This case has clear implications for any parties considering cooperating with the bureau to obtain immunity or leniency for possible conduct in breach of the Competition Act.


Nestlé concerned criminal charges of price fixing contrary to the Competition Act following a bureau investigation. The criminal case was brought against Nestlé Canada Inc based in part on information provided to the bureau by Cadbury Canada Inc and Hershey Canada Inc through the bureau's immunity and leniency programmes.(1)

Issues arose in the case concerning whether information provided to the bureau during the proffer stage of the immunity and leniency programmes must be disclosed to the accused in criminal proceedings. During that stage, parties seeking immunity or leniency must disclose to the bureau the results of internal investigations into possible Competition Act violations. Cadbury and Hershey had each provided this information to the bureau in the hope of obtaining immunity (in the case of Cadbury, which was first to approach the bureau) or leniency (in the case of Hershey, which sought leniency as the first party to cooperate after Cadbury).

In or around June 2014, after having disclosed certain materials provided by Cadbury and Hershey during the proffer stage to Nestlé, the crown discovered that it had not obtained waivers of privilege from Cadbury or Hershey – it thereafter sought to have the accused return these materials and delete any record of them. The accused declined, claiming that it was entitled to the production of proffer materials. The crown thus brought an application seeking a determination as to whether the information provided during the proffer process was privileged;(2) Cadbury and Hershey intervened, arguing that it was.


Justice Nordheimer of the Ontario Superior Court of Justice considered the purpose of the immunity and leniency programmes, which encourage individuals to 'come clean' on anti-competitive conduct in which they have participated. He noted that the fundamental purpose underlying settlement privilege is to protect the negotiating parties from prejudice or risk. Prior case law has held that settlement privilege can attach to communications between parties and the crown during criminal plea negotiations, but only insofar as the information disclosed can be used against the pleading party (and not with respect to another accused).

In this case, the crown had acknowledged that the information in question would be of interest to the accused. Further, Cadbury and Hershey were unable to articulate any specific prejudice that they would suffer as a result of disclosure.

The court ruled that settlement privilege does not apply to the factual information communicated by the intervenors to the bureau, noting that:

"It was front and centre to both Cadbury and Hershey that the fundamental purpose, of both the Immunity Program and the Leniency Program, was to obtain evidence that would allow the Bureau to prosecute other persons involved in the anticompetitive activities."

As these programmes' purpose is to gather information on other offenders, Cadbury and Hershey should have known that disclosing the information provided was the necessary consequence of coming forward.(3)


Parties considering whether to take part in the bureau's immunity and leniency programmes should be aware that documents and information disclosed during the proffering process will likely be subject to disclosure to parties that are prosecuted for related conduct in breach of the Competition Act.

While this ruling has caused some to suggest it could have a chilling effect on parties' willingness to come forward and participate in these programmes, the benefits of obtaining immunity or leniency in many cases will outweigh any risks associated with disclosing communications. The commissioner of competition has stated publicly that he does not expect these reasons to disincline parties to come forward, in part because the immunity and leniency programmes also indicate that disclosure of the information provided is likely to occur.(4)

It also remains to be seen whether a similar ruling on the privilege attaching to proffer materials would be made in the context of a civil claim in which the accused's rights under the Charter of Rights and Freedoms were not in issue. In Nestlé the related class action was settled by the time the privilege application was decided, so the intervenors were not at risk of making disclosures that might compromise their interests in that proceeding.

However, where a class proceeding is ongoing and a plaintiff or other party seeks production of the proffer materials of a defendant, the defendant claiming settlement privilege may have a stronger argument, particularly since the materials are likely to be used against it.

Kevin Ackhurst

D Michael Brown

Andrew McCoomb

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