The Ontario Securities Commission (“OSC”) released for comment on January 18, 2018 proposed revisions to its OSC Policy 15-601 Whistleblower Program (the “Policy”) to clarify the OSC’s position on how the Policy applies to in-house counsel.
Currently, the Policy indicates that in-house counsel are ineligible for a monetary whistleblower award for reporting misconduct to the OSC in situations where counsel learned of the applicable information while acting in a legal capacity for the employer at issue. However, there are exceptions to that ineligibility, for example, where, in-house counsel has reasonable basis to believe that:
- disclosure is necessary to prevent a substantial injury to the financial interest or property of the entity or investors, or
- the subject of the submission is engaging in conduct that will impede an investigation.
Since the Policy was issued in 2016, some people have expressed concern that the Policy’s wording permits in-house counsel to receive whistleblower awards in circumstances where disclosure of information would contravene the lawyer’s obligations to keep information confidential and maintain solicitor-client privilege. The OSC has stated that it was never the intention of the Policy to encourage or allow lawyers to forego these duties. Nevertheless, the OSC has decided to clarify the Policy.
The proposed changes are intended to make it clear that in-house counsel who receive information while acting in a legal capacity, and then report such information under the Policy in breach of their applicable local bar or law society rules, won’t be eligible for the monetary award.
As the OSC emphasizes in its Request for Comment, this change only applies to in-house counsel who received the relevant information while “acting in a legal capacity”. Therefore, lawyers should consider in what capacity they were acting for their company when they learned of the information. If they were fulfilling a non-legal role, it is possible that they would be eligible for the whistleblower monetary award upon disclosure and use of the information as provided in the Policy, since such disclosure would not breach solicitor-client privilege rules if the solicitor-client relationship did not exist in the circumstances. However, it often unclear in what capacity a lawyer is acting at any given time while in the role of in-house counsel, and so care should still be taken.