Class actions co-opt the cops
The walls have ears. Last week the Supreme Court of Canada opened the door for plaintiffs in a price-fixing class action to gain access to wiretap evidence collected in an ongoing criminal investigation. This is a huge victory for plaintiff lawyers.
Until now, plaintiffs would have to wait until criminal proceedings were concluded, then advance their civil claims using whatever evidence was produced during the criminal trial. This case, Imperial Oil v. Jacques, means plaintiffs have access to information that was previously thought to be the private reserve of the cops.
“The practical effect of this decision will be to make it easier for plaintiffs to obtain evidence of price fixing, and thus easier for them to prove their case,” says Michael Osborne of Affleck Greene McMurtry LLP in Toronto.
I’m not sure how happy I am about this. Class actions, in theory, allow bands of otherwise powerless little people to pool their resources so they can take on deeppocketed corporations. I might worry that we upset that balance when we allow the cops to become agents for class-action plaintiff lawyers in private legal actions. But what I think doesn’t matter. A majority of Supreme Court justices have spoken, and they say listen up.
The Supreme Court case considered a section of the Quebec Civil Code that allows litigants to compel a third party to produce documents relevant to a lawsuit. Civil procedure rules in other provinces, such as Ontario and British Columbia, have similar non-party disclosure rules. While the Supreme Court’s ruling looked only at the Quebec Civil Code provision, it’s a fair bet that the high court would take an equally liberal view of disclosure rules in the other provinces. The court said “the cardinal principle” in civil proceedings is the pursuit of truth. I think that policy view tips the scales in the direction of disclosure.
The evidence sought by the class-action plaintiffs comes from a Competition Act investigation into the alleged fixing of gasoline prices in Quebec. The so-called “Octane” pricefixing probe intercepted and recorded more than 220,000 private communications and resulted against charges against 54 persons. Some of those criminal actions are still before the courts.
The case tests whether there are some natural limits to third-party disclosure powers. It’s one thing if a party seeks the disclosure of some financial records held by a bank. It’s another when it comes to the cops, who collect their evidence through the exercise of special judicial powers. These third-party disclosure powers give private litigants the right to compel the police to serve as their agents.
The Criminal Code generally makes it an offence to disclose private communications. Yet Section 193(2)(a) of the code creates an exception that permits the disclosure of such material “in the course of or for the purpose of giving evidence in any civil or criminal proceedings or in any other proceedings in which the person may be required to give evidence on oath.”
Five justices, Louis LeBel, Richard Wagner, Marshall Rothstein, Thomas Cromwell and Michael Moldaver, say the Criminal Code exemption applies in the price-fixing case because the wiretap evidence will essentially be used to help prepare for the hearing. Chief Justice Beverley McLachlin, who supports compelling the third-party disclosure generally, wouldn’t go that far. “Assuming that my colleagues’ reasons can be read as characterizing Section 193(2) (a) of the Criminal Code, R.S.C. 1985, c. C-46, as empowering Canadian authorities to disclose intercepted private communications for use in civil proceedings (an assumption that I do not share), I must respectfully disagree.”
Justice Rosalie Abella was the lone dissenter. She wrote that electronic surveillance should have no role in civil proceedings unless it has already been made public in a criminal trial or unless the targets of the wiretaps have waived their privacy rights. Neither exception appears in the Quebec case, she wrote.
She also flagged a problem. Wiretap evidence is not accepted in criminal trials unless a judge is satisfied the recordings were obtained legal- ly. “It seems to me to be ironic to say that communications sedulously protected from disclosure in the criminal justice system can somehow shed those protections by crossing over to the civil-justice side of the street,” Justice Abella wrote.
Yet the majority judges think they are respecting a balance in the law.
In joint reasons for the majority, justices LeBel and Wagner wrote that trial judges have control over the evidence used in civil proceedings. A judge must limit unnecessary invasions of privacy, but also ensure parties get access to relevant documents. The policy goals are to ensure proceedings remain fair, the search for truth is not obstructed and the proceedings are not unjustifiably delayed, they said.
As part of the balance, the justices noted that the judge overseeing the Quebec action has placed limits on the access to the wiretap evidence. And generally speaking, they said, the trial judge in a civil action is empowered to consider whether the disclosure of the evidence might impact the rights of third parties in other proceedings. “A judge may not refuse to order disclosure solely because it is argued that fundamental rights were violated in obtaining the requested evidence,” justices LeBel and Wagner wrote.