Class dismissed: Competition Bureau’s privilege claims denied by FCA

Last April, the Competition Tribunal (Tribunal) rejected arguments that the Tribunal’s longstanding approach to public interest privilege should re-evaluated and found that class privilege protected documents from disclosure that the Competition Bureau (Bureau) had collected from third parties during its investigation. In a decision released on January 24, 2018, the Federal Court of Appeal quashed the Tribunal’s decision, signalling a major change to the treatment of public interest privilege in Canadian competition law.

Public interest privilege

Since its establishment, the Tribunal has allowed the Commissioner of Competition (Commissioner) to resist disclosure of information collected from third parties during an investigation on the basis of public interest privilege. In the 1994 decision of Director of Investigation and Research v AC Nielsen Co of Canada (Nielsen), the Tribunal recognized for the first time that the Commissioner’s public interest privilege was a “class privilege,” meaning it applies automatically to all such information collected regardless of individual circumstances. This was upheld by the Federal Court of Appeal. Since then, at least 10 Tribunal decisions and three Superior Court cases have confirmed that the Commissioner’s public interest privilege is a class privilege.  

Class privilege creates a prima facie presumption of inadmissibility once it has been established that a particular relationship fits within the parameters of an established category. Solicitor-client privilege, for example, is a class privilege. In contrast, a case-by-case privilege is applied only when the individual circumstances of the document or information in question warrants granting the protection. 

Background

The Commissioner brought an application alleging that the Vancouver Airport Authority acted with an anti-competitive purpose by deciding to permit only two in-flight caterers to operate at the Vancouver airport. During its investigation, the Commissioner obtained a number of orders under section 11 of the Competition Act (the Act) requiring four in-flight catering firms to produce various documents to the Commissioner. The Commissioner eventually served an affidavit of documents identifying 11,500 relevant documents but claiming public interest privilege on a class basis over 9,500 of them. The Commissioner later reduced its privilege claim to only 1,185 documents. The Vancouver Airport Authority brought a motion for these to be disclosed. 

The Competition Tribunal’s decision

The Tribunal followed the case law establishing that the Commissioner was entitled to claim public interest privilege as a class privilege, relying on two policy rationales: the expectation of confidentiality in those providing the Commissioner with information and the fear of retribution or reprisal for providing information. The Tribunal noted the Commissioner’s mandate is a public interest mandate and the Commissioner benefits from a presumption that actions taken in the administration of the Act are bona fide and in the public interest. The Tribunal also pointed to a number of safeguards that “temper the adverse impact” of the Commissioner’s public interest privilege, including that the Commissioner must provide summaries of the privileged information, which can be examined by a judicial member of the Tribunal if inaccuracy concerns are raised.

Importantly, the Tribunal rejected arguments that recent Supreme Court decisions such as R v National Post, narrowed the scope of class privilege. The Tribunal also rejected that the privilege claim gave rise to a breach of procedural fairness relying on the safeguard mechanisms listed above.

The Federal Court of Appeal’s decision

Unlike the Tribunal, the Federal Court of Appeal found the Supreme Court of Canada’s decision in National Post established that new class privileges can be recognized only if they are supported by policy rationales as compelling as the class privilege over solicitor-client communication. The high threshold for the recognition of class privileges means to date only four have been recognized—solicitor-client privilege, litigation privilege, informer privilege and settlement privilege. The court also cited the decision in Canada (Citizenship and Immigration) v Harkat where the Supreme Court refused to grant a class privilege covering evidence from security intelligence sources. In light of these authorities, the court noted, “It is perhaps not far from the truth to say that it is now practically impossible for a court to recognize a new class privilege.”

In any event, the court held the evidentiary record was not sufficient to provide a basis for a class privilege in this case. The Commissioner did not file evidence demonstrating that third parties would be less inclined to provide information to the Commissioner in the absence of a class privilege. In light of recent Supreme Court of Canada jurisprudence this could not be assumed and it was incumbent on the Commissioner to file such evidence. The court considered it significant the Commissioner was unable to point to any other regulator, competition or otherwise, domestic or foreign, that asserted the sort of class privilege the Commissioner was seeking.

The Federal Court of Appeal ordered the motion be reheard by the Tribunal because it did not assess whether any of the 1,200 documents were shielded from disclosure by a case-by-case or document-by-document privilege.

The skies ahead

The Federal Court of Appeal’s decision is likely to cause a significant change to proceedings launched by the Commissioner. No longer having a class-based privilege will mean the Bureau will need to review each document and justify each item it intends to withhold.

Parties defending themselves against proceedings launched by the Commissioner should receive more disclosure of what is in the Bureau’s hands, likely at an earlier stage of the proceedings. Although the Commissioner has always had to disclose records on which it intended to rely, it wasn’t uncommon for the Commissioner to claim public interest privilege over those documents at an early stage and only waive the privilege closer to trial. Privileged documents upon which the Commissioner did not intend to rely were never disclosed, regardless of potential relevance. This is precisely the tactic taken by the Commission in its prosecution against the Vancouver Airport Authority.

Despite zealously defending the principle of public interest privilege, the Bureau has indicated the Commissioner will not appeal this decision to the Supreme Court. While the Federal Court of Appeal’s decision is a game-changer to the law, the Tribunal’s forthcoming determination of the remitted claims for case-by-case privilege will be a major indicator of how the court’s decision influences the Commissioner’s investigation and prosecution practices. We expect many will be watching that decision with interest.