…it is important that the fundamental professional standards be maintained and indeed improved. This is essential if the confidence of the public that the law is a profession is to be preserved and hopefully strengthened. Nothing is more important to the preservation of this relationship than the confidentiality of information passing between a solicitor and his or her client...

Sopinka, J. for the Majority of the Supreme Court of Canada in MacDonald Estate v. Martin, [1990] 3 SCR 1235 at para. 12.

The solicitor-client privilege attached to communication between lawyers and their clients is perhaps the most important hallmark of the legal profession. This allows clients to explore their options and “bare their souls” without fear of repercussion, in order to better understand their legal position, rights and obligations.

Typically, privilege must be guarded. However, in some circumstances, it may be beneficial to share privileged information with other parties in order to mount a joint front against a “common foe”. This is the concept of Common Interest Privilege (“CIP”).

CIP exists where one party voluntarily discloses its privileged record to another party who shares a common interest in the litigation connected to that record. In this situation, the party receiving the record also enjoys privilege, so long as the common interest exists at the time the document is disclosed. 1 To show a common interest, the parties must demonstrate that the third party with whom the information is shared has a sufficient common interest with the client holding the initial privilege.2

Obviously, the advantages of a unified defence in a prosecution under the Occupational Health and Safety Act are manyfold. Where there are two or more co-accused seeking to challenge the actus reus of the charges or to establish a cooperative due diligence defence, access to one another’s documents and witnesses may be critical. Even where one party has not yet been named as an accused, it is possible that the party may anticipate being named and can therefore claim CIP and begin sharing privileged information in contemplation of the possible litigation.

However, it is possible that two parties sharing privileged information, may become adverse in interest, such as when one accused party advances a “cutthroat defence” arguing all fault lies with the co-accused. In such circumstances, what happens to the privileged information that was shared? Can one party rely on it to the detriment of others?

The general rule regarding privilege has been that only the client (or his or her lawyer) may waive privilege intentionally3 or through inadvertent disclosure of that information.4 But in the circumstances of common interest, both parties hold interest. Does this mean that either one can waive that privilege if the parties subsequently become adverse? The short answer is no.

To begin, it is important to note that the possibility of a “cutthroat” defence in the future is not grounds to eliminate the privilege at the time it was made. For example, in 2010 the Ontario Superior Court held that “the possibility that parties might at some future point in time become adverse in interest is insufficient to denying the existence of a common interest privilege at present.”5 This assists the argument of the party resisting any application for production of evidence as it establishes that privilege existed at the time the record was shared with the party.

The critical concern for counsel contemplating sharing information is whether privilege persists when “friends” become “foes”. In Alberta, courts have held that even after the parties sharing common interest become adverse in litigation, CIP remains intact.6 Where one party created the record and then shared it with another party under CIP, only the party holding the original privilege could waive that privilege - meaning that the originating party retains privilege over documents distributed to persons with a common interest.7

This reasoning follows the general rule that privilege is lost only when waived by the party who holds the privilege. Therefore, CIP is not destroyed when the recipient develops an adverse interest. Privilege is maintained until waived by the party holding that privilege. The party who created the documents maintains its privilege when disclosing to another party through CIP, unless a waiver of privilege was intended. The party seeking to adduce the information cannot complain of unfairness since they never would have received the information without the common interest privilege.8

For these reasons, privilege can be maintained over documents shared with a party who later becomes adverse in interest, so long as common interest was established at the time of the sharing and was not subsequently waived.

It should be noted that CIP can only be used as a defence to prevent disclosure over information created by or for the party seeking to prevent its use. It cannot be used as a sword to assert privilege over a record created and shared by another party under common interest privilege, as the privilege still belongs to the party creating the record. For example, if one accused party shared an opinion that certain procedures did not establish a due diligence defence with a co-accused, the co-accused could not prevent the accused party from sharing that information with the Crown through CIP, since the privilege attaches to the party who created the opinion.9

This suggests to clients and their counsel that privilege can be maintained, even where the privileged record was shared with a party who is now adverse in interest to the client, and should encourage counsel to consider sharing information in a joint defence.

However, an additional word of warning is warranted, since disclosure may eliminate privilege even without a waiver. Justice Slatter in Pinder v. Sproule, 2003 ABQB 33, canvassed the law of loss of privilege due to disclosure even where a waiver has not occurred. In the case of common interest privilege, it is possible that the receiving party (or the originating party) may inadvertently or deliberately disclose the shared information without waiving privilege. The Court held that unless there is still a legitimate interest to be protected, or maintaining privilege would create unfairness or prejudice to a party, the Court may not maintain the privilege, taking into account the integrity of the justice system. Justice Slatter concluded that this reasoning would “cover most instances of the common interest privilege”.10

Given these considerations, it would be prudent to enter into confidentiality agreements respecting the limited use of shared privileged material. This provides courts with additional reasons to maintain privilege in the face of an actual disclosure by the formerly common interest party. Such agreements may also allow the aggrieved party to seek damages for a breach should any loss flow from the use of that information against the sharing party. While these agreements seem prudent, there appears to be no judicial consideration of such agreements and so any ability to rely on them is merely speculative.

In conclusion, a party is free to share privileged information with another party if it can establish that the two parties have a common interest and that privilege is not intended to be waived. That privilege extends beyond the period in which the two parties remain in that relationship and into periods in which the parties may become adverse to one another. However, where disclosure of the shared privileged records occurs, either inadvertently or through a deliberate disclosure by the now adverse party, a court may be reluctant to uphold the privilege.  

At the very least, parties should consider the potential for disclosure when entering into common interest sharing agreements. They should enter into confidentiality agreements with respect to shared materials so that there are reasons for maintaining the privilege in the face of any disclosure, or at least, an ability to claim damages for a breach of the confidentiality agreements should any loss or damage flow from the release of privileged information by a formerly common interest, now adverse, party.