Law Times

Law Times • December 6, 2010 FOCUS PAGE 11 parties involved in confidential mediation and settlement talks that sensitive information dis- closed during those proceedings won't become public through access to information requests. WeirFoulds LLP lawyer Appeal court upholds confidentiality principles T BY ROBERT TODD Law Times he Ontario Court of Appeal has issued a rul- ing that will reassure The requester appealed the Jill Dougherty, who acted as counsel to the LCBO in Li- quor Control Board of Ontario v. Magnotta Winery Corp., says the decision confirms the basis on which governments, private organizations, and citizens have been engaging in talks aimed at keeping disputes away from courthouses. The ruling makes clear that all mediation, wheth- er conducted under mandatory mediation provisions within the Rules of Civil Procedure or con- sensually agreed upon by parties looking to come to a settlement, will remain confidential under the Freedom of Information and Protection of Privacy Act. "It's not going to be treated as something that will be subject to disclosure simply upon a FIPPA request," Dougherty explains. The issue arose in the context of ongoing litigation between Magnotta and the LCBO. The parties clashed in a pair of ju- dicial review applications and five defamation actions, two of which went to case manage- ment and mandatory mediation pursuant to the Rules. However, the two sides were unable to come to terms de- spite numerous efforts between 1997 and 2000 through media- tion and settlement talks. That prompted a decision in 2000 to bring all of the issues together into a single mediation. A mediation agreement that included a typical confidentiality provision governed the proceed- ings, according to the Court of Appeal decision written by Jus- tice Eileen Gillese. That made way for the submission of me- diation briefs, which included "highly sensitive and privileged information," she wrote. The consolidated media- tion led to a settlement, which counsel to the parties followed up on by drafting minutes of settlement and putting the fin- ishing touches on the terms of the deal. The minutes of settle- ment also included "extensive confidentiality provisions," the court noted. The LCBO subsequently re- ceived an application for mate- rial filed through the act. The unidentified requester asked for a copy of the full record of the mediated settlement. The LCBO offered up some of the requested material but pointed to exceptions within the legislation for withholding some of the information. These disputed records included doc- uments compiled by Magnotta and held by the LCBO. Mag- notta also opposed the release of the disputed records. LCBO's decision to withhold the material to the Office of the Information and Privacy Commissioner, which ruled against the agency in ordering disclosure of the information. The information and privacy office later denied a request for reconsideration by the LCBO, ruling that mediation isn't litigation as referenced under solicitor-client privilege provi- sions within the act. The LCBO, backed by Mag- notta and the intervening at- torney general of Ontario, suc- cessfully sought judicial review by the Divisional Court, which restored the agency's original decision to keep the disputed records private. But the information and privacy office appealed that ruling at the Court of Appeal, principally arguing that the act lacks an "express statutory ex- emption for settlement privi- lege," Gillese wrote. The relevant portion of the act, s. 19, consists of two branches. The first permits an exemption for records that are subject to solicitor-client privi- lege, while the second does the same for records "prepared by or for Crown counsel for use in giving legal advice or in con- templation of or for use in liti- gation." The Court of Appeal backed the Divisional Court panel's June 2009 ruling on the mat- ter, which was written by Jus- tice James Carnwath. In com- ing to its decision, the panel emphasized the importance of mediation within the litigation process. "All forms of [alternative dis- pute resolution], including both mandatory and consensual me- diation, are part of the litigation process and are equally deserv- ing of confidentiality and the protection of the Branch 2 ex- emption under s. 19 of FIPPA," wrote Carnwath, as paraphrased by the Court of Appeal. Carnwath also determined that the public interest in en- couraging the settlement of liti- gation prevails over the interest in transparency surrounding re- cords prepared by or for Crown counsel in relation to litigation. The judge also pointed to a more practical concern raised by what the Court of Appeal called the information and privacy of- fice's "narrow interpretation of the second branch." Carnwath suggested its view "would de- prive government institutions of the privilege attached to set- tlement discussions otherwise available to all other litigants. Moreover, the IPC's interpre- tation would discourage third parties from engaging in mean- ingful settlement negotiations with government institutions." However, the information and privacy office argued the act intended a more restrictive inter- pretation of litigation and that provisions should exclude media- tion and settlement discussions. "Essentially, the IPC's position Untitled-3 1 An earlier decision allowing for disclosure was of particular concern for government agen- cies, says Jill Dougherty. is that the second branch is co- extensive with litigation privilege for Crown counsel and litiga- tion privilege does not include settlement privilege," Gillese ex- plained. The Court of Appeal dis- agreed with that view largely due to the importance of alternative dispute resolution within the province's civil litigation system. Gillese also determined that the legislature clearly states in the act when it wants to exempt records based on privilege. She pointed out that the first and second branches of s. 19 immediately follow one another and that the second clearly refers to records "prepared by or for Crown coun- sel . . . for use in litigation." "Therefore, the second branch should not be taken to be limited to documents that fall within the common law litigation privilege," Gillese wrote. The Court of Appeal added: "No one would willingly enter- tain settlement discussions with a government institution if it knew its confidential discussions would be made public. This is particularly so as during the set- tlement process the parties may make admissions and offer con- cessions that would otherwise be to their detriment." Meanwhile, Dougherty says the Court of Appeal's ruling is in line with a number of the information and privacy office's own earlier decisions. However, it changed its approach to the issue in a decision submitted after the unidentified requester sought the LCBO-Magnotta mediation records. The information and privacy office's shift threatened to cause Trust [ confusion for government law- yers and those they face in me- diation and settlement talks. As a result, the Court of Appeal's ruling seems to have settled the matter and offered certainty for those looking to turn to alterna- tive dispute resolution in conflicts involving the Ontario govern- ment. "Obviously, when this de- cision came down from the IPC, it was something that I think it's fair to say was of concern to gov- ernment agencies," says Dough- erty. "The fact that the attorney general intervened in this matter was a reflection of, I think, the recognition that it was of concern to government agencies." Dougherty emphasizes that parties would simply not be as candid in resolution efforts pri- or to litigation if someone else could later use the information against them. "You may discuss things in your mediation brief for pur- poses of trying to reach a settle- ment that would be different from the way that you would deal with those matters in open court if the litigation proceed- ed," she says. The information and privacy office didn't respond to a request for comment. LT Every time you refer a client to our firm, you're putting your reputation on the line. It's all about trust well placed. Stacey L. Stevens | David F.MacDonald | Michael L. Bennett For over 70 years Thomson, Rogers has built a strong, trusting, and collegial relationship with hundreds of lawyers across the province. As a law firm specializing in civil litigation, we have a record of accomplishment second to none.With a group of 30 litigators and a support staff of over 100 people,we have the resources to achieve the best possible result for your client. Moreover, we are exceptionally fair when it comes to referral fees. We welcome the chance to speak or meet with you about any potential referral.We look forward to creating a solid relationship with you that will benefit the clients we serve. THOMSON, ROGERS Barristers and Solicitors 416-868-3100 Toll free 1-888-223-0448 www.thomsonrogers.com YOUR ADVANTAGE, in and out of the courtroom www.lawtimesnews.com 9/1/09 9:17:05 AM

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• Wireless Evidence
• Aggressive Bureaucrats
• Focus On ADR / Mediation