Source: http://bc-injury-law.com/blog/tag/investigative-stage
Timestamp: 2019-04-19 18:15:46+00:00

Document:
Reasons for judgement were released today by the BC Supreme Court, New Westminster Registry, assessing the merits of a claim for litigation privilege.
In today’s case (Buettner v. Gatto) the Plaintiff was injured in a collision and advanced a claim for damages. The Plaintiff retained counsel. Liability was initially admitted and then denied by ICBC. The Plaintiff brought an application for production of various relevant documents and ICBC refused disclosure on the grounds that litigation was reasonably contemplated once Plaintiff counsel was assigned.
 If this argument is correct, all that any or all adjusters must do in any or all motor vehicle cases is determine, at the instant that the incident is reported, that he or she is going to deny liability and/or the presence of damages without the need to show any basis or accountability for such decision. Having done so, that will virtually ensure that litigation will be required to resolve any claim for loss. Thereafter, having created the virtual certainty of litigation, the defence will be able to reasonably argue that any and all investigations done from the instant that the incident is reported is for the dominant purpose of the conduct of the litigation which they ensured by the arbitrary denial of fault or damage.
The dominant purpose test is more compatible with the contemporary trend favouring increased disclosure.
While the solicitor-client privilege has been strengthened, reaffirmed and elevated in recent years, the litigation privilege has had, on the contrary, to weather the trend toward mutual and reciprocal disclosure which is the hallmark of the judicial process.
 Inherent in the reasonable prospect/dominant purpose test must be the expectation or requirement that there be at least some evidence of bona fides, due diligence or accountability on the part of the party seeking to rely on the prospect of litigation, which was created by their own actions, to support their claim of litigation privilege. Absent such requirement the test itself becomes meaningless. This is particularly of concern where, as here, the same insurer provides coverage for both parties and, presumably, owes each a duty of some form of meaningful investigation and determination of facts before reaching a decision on an issue as important as fault or liability for a motor vehicle accident.
 I find that there is no evidentiary basis provided to support the decision of Ms. Hilliam to deny liability. Her unsupported decision cannot be used as justification for her to conduct a proper investigation into the facts of this motor vehicle accident while cloaking that investigation in a claim of litigation privilege. The time line and analysis of the court in Hamalainen is applicable to this case and to the evidence here, save as to the assertions of Ms. Hilliam which I reject. As in Hamalainen, the claim of litigation privilege regarding documents 4.7 to 4.12 inclusive, which documents were created prior to the June 17, 2013 form letter communicating the denial of liability, fails and all such documents are ordered produced forthwith and unredacted.
Reasons for judgement were released today by the BC Court of Appeal discussing “the continuum between the information-gathering and litigation stages” in the context of an application for production of privileged documents.
In today’s case (Raj v. Khosravi) the Plaintiff was involved in a motor vehicle collision. Both he and the at fault motorist were insured with ICBC. The Plaintiff met with an adjuster to advance his claim. After the initial meeting the ICBC adjuster commissioned the services of a private investigator who produced a report.
 In my respectful opinion, the judge erred in characterizing the Meeting as part of the information-gathering process, thereby foreclosing a finding that litigation was “in reasonable prospect” when the Report was commissioned. The master, correctly in my view, described the Meeting as “information gathering for the purposes of defending an anticipated claim for lost income” (para. 27). Litigation may be “in reasonable prospect” at any point along the continuum between the information-gathering and litigation stages of an inquiry if an evidentiary basis is established that a party has more than just suspicions about the legitimacy of litigation occurring. The two stages are not mutually exclusive for such a finding. Moreover, this aspect of the test, as noted in Hamalainen, will not be particularly difficult to establish. The evidence in this case established that by the date of the Meeting the information regarding the nature of the accident and the parties involved had been sufficiently established for ICBC to admit liability on behalf of Mr. Khosravi. In my view, an evidentiary basis was established for the master’s finding that litigation was “in reasonable prospect” when the Report was commissioned.
 Similarly, the master found that the dominant purpose of the Report was to assist ICBC in the conduct of Mr. Raj’s anticipated tort claim. She did so by accepting Mr. Kalisch’s evidence that there was no other purpose for the Report other than Mr. Raj’s tort claim, as any potential Part 7 claim by Mr. Raj would only become a reality if and when Mr. Raj provided written confirmation that he had no WCB coverage. While the Report might be relevant to a potential claim for Part 7 benefits in the future, such a claim at the time of the Meeting was not a purpose for the Report’s production. The lack of confirmation that Mr. Raj did not have WCB coverage, and therefore could not make a Part 7 claim at that time, corroborated Mr. Kalisch’s evidence that he had no purpose other than the anticipated tort claim for ordering the Report. Again, in my view it was open to the master on this evidence to find that the dominant purpose of the Report was to defend Mr. Raj’s anticipated tort claim.
 In my respectful view, the judge erred in finding that there was a dual purpose for the production of the Report. The evidence of Mr. Kalisch, as accepted by the master, was that the only purpose for the Report’s production was the anticipated tort claim. Even if a dual purpose could be found to have existed, in my view the judge erred in finding that the dominant purpose of the Report was not litigation because Mr. Khosravi had not eliminated the competing Part 7 claim (para. 49). Mr. Khosravi was not required to eliminate all potential purposes for the Report in order to establish that its dominant purpose was litigation.
Reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, ordering a Defendant in a personal injury lawsuit to disclose an incident report created following the incident at question.
 As noted, the first part of the test, whether the document was prepared in contemplation of litigation, must be satisfied before the court goes on to consider the dominant purpose of the creation of the document. Master Baker considered the first part of the test in light of the affidavits that were provided and as a matter of fact. He properly considered, in my view, that when Ms. Soroka prepared her incident report she was attempting to discover the cause of the accident, whether there were witnesses, and the nature of the injuries sustained by Ms. Smith. She said that her first concern was customer safety.
 As with any claim of privilege, the trier of fact must assess whether the assertion that the document was prepared in contemplation of litigation is reasonable. He cannot simply rely on the statement that the document was prepared in contemplation of litigation. If that were so the mere assertion would determine whether the document was privileged.
 Master Baker assessed the circumstances at the time the report was written and concluded that it was not reasonable to accept that Ms. Soroka prepared the incident report in contemplation of litigation.
 As I stated, the Master applied the appropriate test and reached a reasonable conclusion. The Master’s view that litigation was not a reasonable prospect at the time the incident report was created is not clearly wrong.
 Having reached that conclusion, it was not necessary for Master Baker to consider the dominant purpose test. He did not conflate the two-part test as Air Canada suggests. Air Canada did not clear the first hurdle.
I previously discussed the Two Hats of ICBC and suggested fixing the conflict of interest this creates. Reasons for judgement were released earlier this year by the BC Supreme Court, Vancouver Registry, demonstrating this conflict of interest in action in the context of a litigation privilege claim.
In the recent case (Raj v. Khosravi) the Plaintiff was involved in a motor vehicle collision. He was insured with ICBC and met with an adjuster to advance his claim. After the initial meeting the ICBC adjuster commissioned the services of a private investigator who produced a report.
 I am also of the view that the defendant’s claim for privilege must fail, in regards to a dominant purpose analysis. Again, assuming that we’ve gotten over the litigation privilege hurdle, here this investigation, by the adjuster’s own admission, had more than one purpose. As such, the onus of claiming and eliminating the competing purpose rests on the defendant.
 I agree with the submission of the plaintiff that, during the entirety of the evidence of the adjuster, both in affidavit and during his cross-examination on his affidavit, there is a strong suggestion, a clear suggestion, that the purpsoe of this investigative report was a true dual purpose report.
 Again, the information obtained by the adjuster, at his interview with the plaintiff on November 14, 2006 was information necessary to potentially adjudicate a tort claim, and potentially adjudicate a Part 7 claim. In discovery, the adjuster confirmed that he had retained the investigator during the meeting with the plaintiff, that “the intention is to get information that is going to contradict what I was told in the initial appointment”.
 What he was told in his initial appointment related to both Part 7 claims as well as tort claims. The adjuster seemed to draw no distinction in the investigation, as to which of those two claims is to be covered or emphasized. As such, the onus of showing that the dominant purpose of the report was litigation cannot be met, on the evidence.
 Based on what I have said, I will allow the appeal of the master in regards to the report of the investigator, dated December 15, 2006 and order that it be disclosed.
To my understanding this decision is not publicly available but, as always, I’m happy to provide a copy to anyone who contacts me and requests one.
As recently discussed, claims for litigation privilege can fail when a defendant’s insurer collects statements and information shortly after a collision in what is deemed to be the ‘investigative stage‘. The simple reason being that such documents typically are not created for the dominant purpose of litigation.
This analysis, however, does not necessarily translate easily to statements obtained by Plaintiffs following a crash because Plaintiffs do not share the same investigatvie responsibilites that insurers do. This reality was highlighted in reasons for judgement published earlier this year by the BC Supreme Court, Vancouver Registry.
In the recent case (Cliff v. Dahl) the Plaintiff was injured in a 2007 collision. She hired a lawyer to assist her with her claim. The lawyer hired an investigator who obtained statements from multiple witnesses to the collision.
 The Master had before him an affidavit of plaintiff’s counsel which, sketchy as it is, did say that the information was gathered and the statements were gathered for the purpose of preparing for the plaintiff’s case in this action, as opposed to investigating the plaintiff’s case, and the Master apparently inferred from that that litigation was the dominant purpose. Sketchy as that evidence was, I cannot say that the Master was clearly wrong in drawing that conclusion.
 Defence counsel refers to a statement of the Master in which he says in effect that it is very hard to see how statements gathered by plaintiff’s counsel once retained would not meet the dominant purpose test. That is probably too broad a statement and certainly if the Master said that it was a general rule of law, that would be a question of law to be reviewable but in my view that is not the basis of the Master’s decision. He made a finding on the evidence before him.
 In that regard, I note that while the evidence from plaintiff’s counsel is sketchy, plaintiff’s counsel in this situation is in a somewhat different position from the insurance adjusters whose determination of dominant purpose is often at issue in other cases such as Hamalainen, supra.
 The point at which a plaintiff’s counsel moves from the stage of investigating and considering the possibilities of litigation to a firm decision to proceed and the subsequent efforts that have a dominant purpose of litigation depends of course on the information in counsel’s possession. Much of that information must necessarily come directly from the plaintiff and the plaintiff’s counsel must balance the need to show the dominant purpose of the document or the witness statement with the restrictions placed upon him or her by solicitor/client privilege.
 I infer from the material before me that the Master reviewed the evidence and found it sufficient to establish a dominant purpose. Whatever decision I might have made had the matter come before me, I cannot say that the Master was clearly wrong.
 Those are my reasons for judgment and so the appeal is dismissed.
Of note, this result was revisited after the witness subsequently became a party to the litigation.
A trend developing in BC Caselaw is the demonstrated difficulty ICBC has trying to withhold documents in a personal injury lawsuit based on their ‘investigative’ responsibilities. Reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, further addressing this topic.
In this week’s case (Gilbert v. Nelson) the Plaintiff was injured in a 2005 collision with a vehicle. The Plaintiff was 13 at the time and was riding a bicycle. Following the collision ICBC investigated the collision and obtained engineering reports and a further report from an independent adjuster. In the course of the lawsuit the Defendant had access to these documents. The Defendant refused to produce them claiming litigation privilege.
 Saying that litigation is a certainty is not the test for the dominant purpose.
 What I do observe from the facts before me is that no counsel was consulted or retained by the defendant or his insurer until after the notice of civil claim was issued in July, 2010. While the retainer of counsel is not an absolute test as to whether or not documents were created for the dominant purpose of litigation, it is but one factor in this case that indicates that the defendant and his insurer were not preparing for litigation nor directing the course of the defence of a possible law suit, until a notice of civil claim was issued some five years post accident. One would have thought that the defendants would have sought to establish the dominant purpose by showing on a balance of probabilities that the dominant purpose of the documents was to obtain legal advice or to aid in the conduct of the litigation.
 Most certainly the defendant and his insurer had followed a course of investigating the accident, and its dynamics, but other than telephone conversations Ms. Fall had with Mr. Gilbert on June 13 and 15, 2005, there is no evidence before me that the defendant or his insurer made a formal declaration to the Gilbert family by way of letter that liability for the accident was being denied. In my view, a reasonable person would expect no less especially after the family was told that an assessment of liability would be made after receipt of the traffic analyst’s report which was anticipated to be received by Ms. Fall in August, 2005.
 In all of the circumstances, I find that the defendant hasn’t met the onus on him to satisfy me that there exists over either the CWMS notes or the reports currently listed in Part 4 of the Defendant’s List of Documents a litigation privilege, such that disclosure of the documents up to the date of the first letter from counsel for the plaintiff should not be made to the opposite party. The only caveat will be that all references to reserves are to be redacted.
 The plaintiff shall have his costs for preparation for, and attendance at the hearing.
Further to my previous article on this topic, reasons for judgement were released last week by the BC Supreme Court, New Westminster Registry, addressing the circumstances when a defence litigation privilege claim will fail due to records being created during ICBC’s “investigative stage” following a collision.
In last week’s case (Bako v. Gray) the Plaintiff was injured in a 2008 collision. In the course of the lawsuit the Defendant listed several documents as privileged. These included an ICBC adjuster’s notes and further the notes of an independent adjuster hired by ICBC. The Plaintiff brought an application to produce these records. The Defendant refused arguing these records were subject to litigation privilege and that they were created for the dominant purpose of preparing for litigation.
I DON’T HAVE ANY CONCERNS RE: CREDIBILITY, BASED ON WHAT I HAVE SEEN TO DATE.
SO LONG AS MR BAKO REMAINS UNREPRESENTED, AND CONTINUES TO WORK, THE RISK EXPOSURE OF THIS FILE IS MODERATE.
I AM GOING TO RETAINED DON UNRAU, INDEPENDENT ADJUSTER, TO ACT AS MY LIAISON WITH THE PLAINTIFF.
 These entries clearly indicate that as of late November 2008, Mr. Matheson’s focus was on information gathering and settlement, with both being done quickly and before Mr. Bako retained counsel; when litigation type issues did arise they were referred to as “precautionary” or “just in case”, neither of which is at all consistent with his sworn assertion that he “believed this matter would result in litigation” when he first received the file.
 Based on my review of the materials, it is of little import whether Ms. McIntosh or Mr. Matheson had charge of the files between November 10, 2008 and March 16, 2009, or for that matter, September 22, 2009 when the Writ was filed and sent for delivery to ICBC. Nothing in the materials supports Mr. Matheson’s assertion that he had a reasonable basis to determine and that he did determine that there was a reasonable prospect of litigation in this case.
 Save and except for references to reserves, the CWMS notes are ordered to be produced in unredacted form up to and including September 22, 2009.
 All references to the independent adjuster in November of 2008, centered on him simply being a “liaison” between Mr. Matheson and Mr. Bako, at least for so long as Mr. Bako remained unrepresented; the report is dated shortly after Mr. Bako did retain counsel. Again, I see no support for any conclusion other than that his involvement was related directly to Mr. Matheson’s stated intention to settle the file before Mr. Bako retained counsel. The report is ordered produced.
Given ICBC’s monopoly over vehicle insurance in BC they typically have to perform multiple roles following a collision including investigating the issue of fault in order to make internal decisions regarding the premium consequences for the customers involved in the crash. Documents prepared during this ‘investigative‘ stage generally need to be produced during litigation and claims for litigation privilege will fail. Reasons for judgement were released this week further demonstrating this fact.
In this week’s case (Fournier v. Stangroom) the Plaintiff was injured in a 2007 collision. In the early days following the crash and well before litigation got underway ICBC retained an engineering firm to inspect the Plaintiff’s vehicle. The engineering firm communicated their findings to ICBC. In the course of the lawsuit the Defence lawyer commissioned an expert report from the same firm but did not exchange it with the Plaintiff’s lawyer.
 On August 9, 2007 the initial adjuster on the file requested MEA or one of their engineers to examine the plaintiff’s vehicle in order to determine whether the plaintiff was wearing his seatbelt at the time of the collision. The engineer did so, communicated with the adjuster the following day with questions and subsequently reported to the adjuster on September 13, 2007. That adjuster referred to that report as being sufficient for his purposes; the next adjuster, Ms. Madsen referred to the “verbal report” as being “sufficient for the purposes of handling the claim SHORT OF LITIGATION” (emphasis mine).
 In early 2011 defence counsel commissioned MEA to prepare an expert report, apparently regarding the seatbelt issue, for possible use at trial; he says that since such a report has now been requested, the engineer’s file material, notes and such are not producible unless and until the report is received and provided to plaintiff’s counsel 84 days before trial.
 In cases such as this one, the adjuster or adjusters have duties of investigation on behalf of both the plaintiff and the defendants; there must, almost of necessity, be an initial period of adjusting or investigating to discover the factual matrix within which the adjusters will perform their duties and assess the file and the claims or roles of the interested parties. Absent such period and process of investigation the adjuster can have no reasonable basis upon which to conclude that there is a reasonable prospect of litigation and that all or part of what is done from any given point in time forward is done for the dominant purpose of litigation. In this regard see Hamalainen (Committee of) v. Sippola (1991) 62 BCLR (2d) 254 (BCCA).
 These engineers were approached within the first 3 weeks following the collision, clearly within the period of initial investigation and was even seen by at least one of the adjusters as being used for purposes of handling the file short of litigation. The investigative material, notes, correspondence and other such recordings of the engineers were not created at a time when litigation was a reasonable prospect; neither were they created for the dominant purpose of litigation. The fact that counsel has now requested an expert report from MEA does nothing to change that any more than a request to a G.P. or plaintiff’s medical expert that he or she provide an expert report renders that practitioner’s clinical records privileged.
 The MEA investigative material, notes, correspondence and working papers which arose between August 9, 2007 and September 13, 2007 inclusive are not subject to a valid claim of litigation privilege; they are ordered to be listed and to be produced to plaintiff’s counsel within 14 days. If there are any other MEA materials which arose between September 14, 2007 and the date when defence counsel commissioned their expert report, those are to be listed with the required clarity, date and description in order that any further claim of litigation privilege can be properly assessed.
Two decisions were released this week by the BC Supreme Court dealing with the issue of litigation privilege in BC personal injury lawsuits. The first case stressed the importance of lawyers properly identifying and listing documents, the second dealt with evidence gathered by an insurance company during the “investigative stage” following a motor vehicle collision.
 It is counsel’s duty to determine relevance and claims of privilege; see G.W.L. Properties Ltd. v. W.R Grace & Co.,  B.C.J. No. 2387. There is an obligation to describe documents in sufficient detail to enable other parties to assess the validity of the claim of litigation privilege; see Hetherington v. Loo et al, 2007 BCSC 129 and Nanaimo Shipyard Ltd. v. Keith et al, 2007 BCSC 9. The dominant purpose test is still the appropriate test to be applied in determining litigation privilege but is “more compatible with the contemporary trend favouring increased …mutual and reciprocal disclosure which is the hallmark of the judicial process”; see Blank v. Canada (Minister of Justice), 2006 SCC 39. This is all well settled law.
In the second case (Pshelensky v. Dion) the Plaintiff was involved in a 2006 collision. Within a week of the crash the Plaintiff hired a personal injury lawyer to represent her. Shortly after this the Defendant’s insurance company obtained a statement from the Defendant and witnesses to the crash. After the lawsuit started the Defendant refused to produce a copy of the statement arguing that since the Plaintiff hired a lawyer a lawsuit was reasonably contemplated when the statements were taken and they were protected by “litigation privilege“.
 I take the view that the two statements taken from the driver and passenger of the defendant motor vehicle were essentially taken to determine the cause of the accident and, of course, to determine who might be at fault.
 In my view the defendants rely upon the fact that the plaintiff retained counsel early on in these proceedings or shortly after the accident to suggest that litigation was contemplated. I do not agree with this proposition for in my view it was far too early in the proceedings to make a final determination as to whether or not litigation would be inevitable.
 I further take the view that the statements taken from Badr and Dion were so close to the time of the accident that they were very early in the continuum before the dominant purpose became one of furthering the course of litigation. Accordingly I find that both statements are not privileged and should be released to the plaintiff applicant.
This is just one in a series of recent cases making it clear that when an insurance company is investigating why a crash happened it will be very difficult to keep statements from the Plaintiff in a subsequent lawsuit. You can click here to read my archived posts further dealing with the issue of litigation privilege in the context of BC personal injury lawsuits.

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