In a recent motion decision, M.D and Aviva Insurance Company, the LAT offers some guidance as to the limits of what must be provided when it comes to the ubiquitous demand for adjuster log notes.
Prior to the LAT dispute in which this motion arose, the claimant had filed for mediation at FSCO. The mediation application was filed on May 6, 2015 for a single issue: entitlement to an attendant care assessment. The FSCO dispute settled without a hearing on December 12, 2016.
It was not until January 23, 2018 that the claimant sought to formally dispute any other issues on the claim, at which point a LAT application was filed for two disputed treatment plans. Neither of these treatment plans were related to an attendant care assessment.
At the LAT case conference held in May 2018, the applicant requested adjuster log notes including the period of May 6, 2015 to December 12, 2016, the duration of the FSCO dispute. While the insurer had agreed to provide the adjuster log notes, the notes during the FSCO dispute were refused on the basis of litigation privilege.
Following the case conference, the insurer relented, and handed over the complete, but redacted log notes. The redactions included the entire 1.5 year period of the FSCO dispute, from date the application for mediation was filed all the way until settlement. The log notes were followed by a letter with brief reasons for each redaction stating the type of privilege claimed as well as confirmation of the time periods of each page of the redacted entries. All of the redactions, save one, were made based on litigation privilege, with solicitor-client privilege being the exception.
In addition to privilege, the insurer argued that these records which had been redacted were not relevant since they did not, and could not, relate to the current issues in dispute, as treatment plans for current issues had not been submitted until long after the FSCO issue settled.
The applicant’s response was to bring a motion to compel the production of the complete log notes, subject only to solicitor-client privilege. The motion was heard by Vice Chair Maureen Helt, who framed the issues as follows:
1. Were the log notes relevant to the issues in dispute?
2. Are the log notes for the period of the FSCO dispute covered by Litigation Privilege?
3. If the log notes are covered by litigation privilege, does that privilege continue to exist after the FSCO dispute settled?
The Vice Chair acknowledged the Tribunal has thus far consistently held that log notes are presumptively relevant, though after the LAT application is filed, the log notes become presumptively privileged and are generally not produced.
However, she also acknowledged that there must be a reasonable relationship between the records sought and the issues in dispute, to be relevant. Despite this, there was not a specific finding as to whether the redacted log notes would be sufficiently relevant to be required to be produced. Instead, the extensive redactions were addressed. The insurer was ordered to provide thorough explanations for the redactions made to inform the applicant the nature of the redactions (ie relevance, litigation privilege and the reason for the privilege). The insurer was also ordered to provide a summary of the contents of each redaction.
Presumably the more thorough explanation of each redacted entry would permit the applicant to later argue whether the individual redactions were justified on the basis of relevance. However, this roadmap to a future motion was not set out in the Vice Chair’s decision.
2 Are the adjuster log notes covered by Litigation privilege?
The Vice Chair was satisfied that the adjuster log notes were subject to litigation privilege for the period of the FSCO dispute. Litigation privilege was noted to create a presumption of inadmissibility for documents and communications whose dominant purpose was for litigation or in preparation for litigation. This “zone of privacy” around litigation communications is required to ensure an effective adversarial process.
Both parties and the Tribunal agreed that the appropriate test to be applied for litigation privilege is as stated in Lizotte v Aviva Insurance Company of Canada 2016 SCC 52:
1. The documents must have been created for the dominant purpose of litigation; and
2. The litigation or related litigation is either pending or may reasonably be apprehended.
Blank v Canada 2006 2 SCR 319, was cited by the insurer for its enlarged definition of “litigation” which includes separate proceedings that involve the same or related parties which arise from the same or related cause of action or “judicial source”.
The applicant argued that since the issues in the FSCO dispute were different than the LAT application, and the insurer was continually adjusting the file during this period, it follows that not all adjuster log notes were created for the dominant purpose of litigation.
The Vice Chair agreed that a blanket statement cannot be made to claim adjuster log notes as a whole are or are not protected by litigation privilege but rather each document will be subject to the dominant purpose test. With this in mind the insurer’s redactions were characterized as “heavy handed”. However, it was confirmed that the litigation privilege does apply to any log notes prepared during May 6, 2015 and December 12, 2016 that related to the issues in dispute that were before FSCO.
3. Does Litigation Privilege extend after matter settled at FSCO?
Both the applicant and the respondent turned to Blank v Canada on whether litigation privilege extends after the FSCO matter has settled.
The applicant submitted that when the litigation that gave rise to privilege ends, the privilege it gave rise to has lost its specific purpose and therefore it’s justification.
The respondent pointed out that in Blank the Court also said that where the litigation that gave rise to the privilege has ended, but related litigation remains pending or may reasonably be apprehended, litigation privilege can continue. This is particularly relevant in the context of accident benefits claims, where an applicant has an ongoing right to dispute denials for benefits before the Tribunal.
The Vice Chair accepted that litigation may reasonably be apprehended as long as the claim is open, given the potential for the denial of future benefits. At paragraph 40:
As noted in the submissions the purpose of privilege is to “create a zone of privacy” in relation to pending or apprehended litigation. When litigation ends but further litigation involving the same parties and the same cause of action (the action) continues, a continuation of that zone of privacy over the documents that were covered by litigation privilege previously remains
Since the reason the matter before the Tribunal now relates to the same motor vehicle accident and the same parties, litigation privilege continues to apply to the notes today for the period covering the FSCO dispute and does not cease to exist because the FSCO proceeding settled.
There are some clear takeaways that may be particularly helpful in the context of the current accident benefits dispute resolution system where case conferences are scheduled fairly quickly after a LAT application is filed. It is not uncommon to see several LAT applications on a single accident benefits claim either with issues withdrawn or otherwise resolved. Litigation privilege will presumptively apply after an application is filed and the insurer can assert privilege over log notes during the period covering earlier disputes. Log notes appear to need to be provided with clear redactions along with an explanation as to the grounds for the redaction and a brief summary of what the record contained. This privilege will extend for the remainder of the life of the claim.
As something of an aside to the main arguments, the applicant also argued for alternative relief that even if privilege existed, the unreasonable withholding or delayed payments would amount to “actionable misconduct” and so the Tribunal should order disclosure of documents despite privilege. This argument was fully rejected. The Vice Chair noted that the Tribunal has no statutory authority to awarded this type of order and no jurisdiction to order a separate hearing to determine whether there is a prima facie case of actionable misconduct. The Tribunal’s only authority in instances of bad faith claims of unreasonably denying or withholding payments, is to grant an award pursuant to O. Reg 664.