When a fraud is suspected, the litigator often turns to a private investigator to gather evidence about, and to use against, the fraudster. Retaining and instructing an investigator must be undertaken with extreme caution to avoid ultimately prejudicing the case against the wrongdoer. Those retaining and instructing investigators should pay particular attention to issues surrounding privilege and privacy legislation.
The Old Days
Before the advent of privacy legislation, litigation counsel could often look to investigators to figuratively (and sometimes, literally) "dig into", "pry open", and "squeeze" various sources for sensitive and otherwise seemingly unattainable information. The proverbial "dumpster dive". A common practice was to retain a private investigator, provide the background facts and anticipated claim or pleadings, and then wait for the subsequent delivery of a package of information detailing assets, liabilities, behavioural and financial patterns, corporate connections, photographs and videos, and perhaps even criminal activity and a related criminal record. Very few questions were asked about how the information was obtained, and the investigators did not typically reveal either their sources or tricks of the trade. The investigator's written report, to the extent these were ever created (often counsel would only request an oral report) was assumed to be privileged and placed at the bottom of the file.
Times have changed. Private investigators may still be able to provide all sorts of valuable information, of course, but their shortcuts are fewer, there are many more bureaucratic and legislative hurdles on their way, and their conduct is under a far more rigorous eye. No longer can counsel turn a blind eye to the investigator's conduct and process in obtaining information, as the courts (and Law Society Benchers) are more apt now to hold lawyers to account for the acts of their agents.
For example, it wasn't too long ago when obtaining a criminal record was an easy favour between former colleagues in a police service and then was provided to counsel for a reasonable fee. To follow that practice now and stray outside the formal and restrictive process to obtain someone's criminal record (today a combination of legislation, regulation, and police service policy) exposes one to employment discipline (for a police officer, possibly loss of job), personally being sued, and the risk of having the record deemed inadmissible in the proceeding.
It is an important starting point to realize that investigations, reports, and the work product of investigators are not, in and of themselves, protected by privilege. However, where the investigator is retained for the dominant purpose of litigation, then the investigator's work may be protected from disclosure by litigation privilege. The key here is that the "dominant purpose" of the investigator's work must be litigation: see Blair v Wawanesa Mutual Insurance Co, 1998 ABQB 1025.
Without the protection afforded by litigation privilege, any investigation which uncovers facts may be subject to disclosure. Thus, in retaining and instructing an investigator, it is necessary to undertake steps which make clear that the dominant purpose of the retainer is real, or contemplated, litigation.
This can be done in a number of ways, including:
- having a lawyer retain the investigator;
- making clear in written instructions to the investigator that the work product is intended for use in litigation; and
- building a paper trail that supports the fact that litigation is being contemplated as against the alleged wrongdoer prior to retaining and instructing the investigator.
Courts have consistently held that when the dominant purpose of the private investigator's work is to prepare for or assist with litigation, the report and related materials will be protected from disclosure, except for where the privilege is waived. However, the converse is also true. Where courts have found that the investigator was retained for purposes other than litigation, the investigator's material can be disclosed: see Mosely v Spray Lakes Sawmills, 1996 ABCA 141. The instructions provided to the investigator must be clear and unambiguous that the report is intended for use in litigation. For example, where investigators have simply been instructed to conduct an investigation, without defining the purpose of the investigation beforehand, those reports have been ordered produced: see e.g. Whitehead v Braidnor Construction Ltd, 2001 ABQB 994.
In recent years, we have seen privacy legislation used as a shield against obtaining someone's personal information. Ironically, however, privacy legislation has also been gaining prominence as a tool used by those seeking to gain access to information held by private investigators. So far, these attempts have proved unsuccessful. Some litigants have attempted to use the Personal Information Protection and Electronic Documents Act, SC 2000, c 5 (PIPEDA) and associated privacy legislation to thwart attempts to investigate or to clothe investigative reports with privilege. For example, in State Farm Mutual Automobile and Assurance v Canada, 2010 FC 736, the defendant insurance company hired an investigator to investigate claims made by a plaintiff. The plaintiff sought disclosure of the investigative report as personal information subject to disclosure under PIPEDA. The argument was dismissed. The Court ruled that the investigation reports and related documents and videos prepared by, and for, the insurer or its lawyers to defend their defendant client in the civil tort action were not subject to PIPEDA. The Court also ruled that the Privacy Commissioner's authority to make inquiries about the information held by any private investigator was limited by assertions of litigation privilege.
Similarly, in United Food and Commercial Workers, Local 401 v Alberta, 2012 ABCA 130, a union videotaped people crossing a picket line. People who were recorded crossing the picket line filed complaints with the Information and Privacy Commissioner under the Personal Information Protection Act, SA 2003, c P-6.5 (PIPA). The Commissioner concluded that the Union was not entitled to videotape the picket lines. The Alberta Court of Appeal disagreed with the Adjudicator.
The Court of Appeal held that any such restriction of the union's activities, even if supported by PIPA, violated the union's right to freedom of expression pursuant to section 2 of the Charter of Rights of Freedoms, and that such restriction was not justified or proportional. As such the union was allowed to videotape the picket line.
A similar conclusion was reached in Druken v R.G. Fewer and Associates Inc.  N.J. No. 312, a decision of the Newfoundland Supreme Court-Trial Division involving a personal injury action. Investigators were retained to investigate the validity of the plaintiff's claims through surveillance. The plaintiff alleged that the surveillance was an invasion of privacy under Newfoundland's Privacy Act. The claim was dismissed as the Court held that the plaintiff did not have a reasonable expectation of privacy in his public actions. The Court also confirmed that the courts recognize surveillance as a legitimate tool in defense of personal injury claims, and the actions of the companies involved were reasonable. The surveillance was not without purpose, and the insurance company had a lawful right to pursue such surveillance. The Court further confirmed that video surveillance did not require the plaintiff's consent. The Court cautioned, however, that investigators had to act within the confines of, and subject to, the restrictions imposed by the laws and regulations governing conduct by investigators. The Court further cautioned that investigators have to act for a lawful purpose and to be under retainer to obtain such information.
A similar decision was reached in Amalgamated Transit Union Local No. 569 v Edmonton (City), 2004 ABQB 280, where an employee went on disability leave. His employer ordered video surveillance to demonstrate that the employee was performing strenuous physical tasks. The employee refused a "back to work" plan. At the subsequent labour arbitration, the Board of Arbitration admitted the video surveillance into evidence. The union argued that the surveillance ought not to have been allowed, because it breached the employee's right to be secure from unreasonable search and seizure pursuant to section 8 of the Charter of Rights of Freedoms. The Court of Queen's Bench of Alberta, on review, held that the Charter had not been breached as the employee had no reasonable expectation of privacy, given that the surveillance occurred in a public place and was a public activity engaged in by the employee.
Each of these decisions provides helpful affirmation that the lawful activities of private investigators are generally not caught by application of privacy legislation.
If properly instructed and retained, private investigators can be a powerful tool in weakening claims of potential plaintiffs, or building a case against a potential defendant. However, care must be taken to ensure that the investigator is retained and instructed in a way that makes clear that the purpose of the retainer is to gather information for use in real or contemplated litigation. Further, every effort must be undertaken to ensure that the investigator performs proper surveillance that does not infringe on the subject's privacy, for example by undertaking surveillance in public areas, by accessing only information that is publicly available, or to accessing information which the person retaining the investigator has a right of access (for example, an employer accessing the workplace computer of an employee). Taking those steps will maximize the chance that the resulting work product will be clothed by litigation privilege, not subject to attack under any applicable privacy legislation, and that your helpful information can ultimately be made admissible.