Waiver of privilege raises a red flag in the discovery process. In Nova Chemicals (Canada) Ltd. v. Ceda-Reactor Ltd., 2014 ONSC 3995, the Court confirmed why waiver of privilege does not need to be intentional – it may be implied based on the circumstances. The Court described the application of the test for waiver of privilege as follows:
An express waiver of privilege will occur where the holder of the privilege (1) knows of the existence of the privilege and (2) voluntarily evinces an intention to waive it … Despite these requirements, an implied waiver of … privilege may occur where fairness requires it and where some form of voluntary conduct by the privilege holder supports a finding of an implied or objective intention to waive it.
The Court in Nova Chemical ultimately concluded that the defendant was not justified in asserting a privilege claim over documents its senior employee had disclosed to the plaintiffs years before the litigation commenced. Privilege was waived by that disclosure.
The Court said that it would be unfair to “deprive [the plaintiffs] of the ability to make continued use of evidence which came into their possession, without any fault or improper conduct whatsoever on their part, long before the plaintiffs’ ultimate decision to proceed with commencement of formal and expensive high stakes litigation”. The Court also determined that the effect of waiver could not easily be eradicated because the documents in question had been reviewed, digested and studied at length by the plaintiffs and their counsel.
Attention to the Court’s analysis of “fairness” in this case is instructive to counsel when determining whether incurring the cost to assert or oppose waiver of privilege makes sense in the circumstances of a case.