Disclosing documents to law enforcement. What happens to privilege?

Does the voluntary disclosure of a privileged document to the police, in connection with a criminal investigation, result in the loss of the privileged and confidential nature of the document towards third parties? It is on this question that the Quebec Court of Appeal ruled in the case Centre universitaire de santé McGill c. Lemay¹. 

In this decision, the Court of Appeal establishes that it is possible to cooperate with a police investigation by voluntarily disclosing privileged documents to law enforcement without waiving the privilege with respect to other third parties.

The context and the disputed privileged document 

The document at issue was a forensic accounting report produced by an accounting firm at the request of the McGill University Health Centre’s counsel². This report was protected by solicitor/client privilege, as it was prepared at the request of counsel and for the purpose of legal consultation³. 

The McGill University Health Centre, wishing to cooperate with the investigation, subsequently provided this document to police authorities. Following this voluntary disclosure to law enforcement, an access to information request was made by a third party to obtain a copy of the report. This request was denied, which led to the dispute⁴. 

Waiver of privilege and voluntary disclosure to law enforcement

At the outset, the Court of Appeal reiterated the general principle that disclosure of privileged information to a third party usually entails a waiver of privilege⁵. Justice Mainville, who wrote the reasons for the decision, specifies however that this principle should not be understood as to imply a loss of confidentiality towards anyone whenever a privileged document is disclosed to a third party⁶. The precise scope of a waiver of privilege will depend on the context and facts of each case.  

After recalling the broad principles applicable to waiver of privilege, Justice Mainville, discussing the specific issue of voluntary disclosure to law enforcement, referred to the teachings of the English Court of Appeal in British Coal Corp. v. Dennis Rye Ltd and another (No. 2). In that case, it was decided that disclosure of privileged documents to the police in the context of a criminal proceeding did not constitute a waiver of privilege in civil proceedings⁷. 

Noting that there is "no obstacle in Quebec law to the reasoning adopted in British Coal," Mainville J. concluded, on the basis of the context and facts of the case, that by sending the report to the police, the McGill University Health Centre did not intend to waive privilege with respect to all⁸. In support of this conclusion, the court notes that the report was seen by a limited circle of internal persons and that the report, although provided to law enforcement without an explicit reservation of privilege, was always treated as privileged, showing an intention to preserve its confidentiality despite its transmission⁹. 

Cooperation and privilege

This recent Quebec Court of Appeal decision can be seen as confirmation that it is possible, depending on the circumstances, for businesses to cooperate with criminal investigations and to disclose, among other things, privileged documents to law enforcement without fear of waiving privileges against any other third party. This is an important decision and, to our knowledge, the first time the Quebec Court of Appeal has ruled on this specific issue. 

It also provides some assurance to companies as to the preservation of legal privileges when they need to disclose certain privileged information to third parties, such as their external auditors. 

Finally, at a time when various legislative tools and programs exist to promote cooperation with criminal investigations¹⁰, it will be interesting to see what impact this decision will have in the years to come.