Are lawyers sitting ducks for breach of privacy claims?

As a lawyer, you are also a spy.  The extent to which you may wish to look the part is up to you.

(version française)

As a law student in an intellectual property firm, I was often instructed to collect evidence out in the real world, not only to prosecute counterfeiters but also to help prove clients’ rights in administrative hearings.  Every day, commercial lawyers snoop on companies in merger deals, litigation lawyers perform credit and asset checks to advise clients before launching suits, and matrimonial lawyers chase after sources of alimony and child support.  Anyone with a PC can look at a website’s HTML code to see if a client’s adversary or trade competitor has used meta-data which may infringe various contractual or statutory rights.  Even mild-mannered research lawyers troll through records check up on parties’ litigation history, from the anonymity of their bank tower offices.

Are we all now also tortfeasors?  The buzz over the Ontario Court of Appeal’s recognition of a tort in invasion of privacy has made lawyers raise their eyebrows during these early days of 2012.

How privacy law will hit the civil courts

The news value of the decision in Jones v. Tsige, 2012 ONCA 32, released January 18, 2012, has been the Canadian court’s recognition of a cause of action already adopted in other jurisdictions.  Until now, privacy law in Canada has largely been restricted to statutory remedies administered by commissions and agencies.

While it is difficult to determine whether the court in fact opened a floodgate of litigation, it is inevitable that social media and other cyberspace phenomena will cause people’s activities to rub against legal boundaries.  In the United Kingdom, with its army of nosy neighbours, the consumer demand for the product of privacy breaches has reached its apogee and mass-media fall-out in the phone-hacking scandal.

In Canada, unless the invasion is combined with a more tangibly injurious tort, such as defamation or conspiracy, damages will tend to be modest.  (Class action lawyers, prick up your ears!) As a freestanding tort, it also runs into the problem that standard general liability insurance policies provide coverage for the “offence” of breach of privacy only if the breach includes publication of private information.  Until the standard IBC form catches up, there won’t be many deep pockets to pay for judgments.  On the other hand, the absence of deep pockets should make professionals worry.  (If you get lost while on safari, the guides are off-limits until the food runs out.)

Effect on legal practice

What many have not noticed, however, is the potential for abuse of the remedy in tort to cast a chill over lawyers’ activities.  For any number of reasons, the very stuff of our work engages boundaries separating zones of privacy and public scrutiny.   This seems particularly applicable to litigation, but the rules of court or administrative tribunals provide legitimate cover for many intrusive activities.  Where lawyers may be more exposed is in traditional solicitor activities, such as inquiries conducted to perform due diligence in corporate and commercial transactions.

To see how lawyers’ activities might be affected, one has to study how the court in Jones formulated the elements of the tort, at paragraph 71:

“The key features of this cause of action are, first, that the defendant’s conduct  must be intentional, within which I would include reckless; second that the defendant must have invaded, without lawful justification, the plaintiff’s private affairs or concerns; and third, that a reasonable person would regard the invasion as highly offensive causing distress, humiliation or anguish. However, proof of harm to a recognized economic interest is not an element of the cause of action. I return below to the question of damages, but state here that I believe it important to emphasize that given the intangible nature of the interest protected, damages for intrusion upon seclusion will ordinarily be measured by a modest conventional sum.”

The main battleground will likely be the validity of the “lawful justification” for the activity.  For example, a common activity of lawyers in the insurance personal injury field is private surveillance on an accident victim.  Defendants and insurers will argue that a personal injury claimant implicitly consents to the intrusion by placing in issue his or her physical or psychological ability to perform daily activities.

This might be correct, except intrusion into private affairs permitted in litigation is circumscribed by the rules of court for discovery, or by administrative rules of a body like FSCO in automobile litigation.  How much privacy does a claimant give up, for having brought a claim to enforce his or her legal rights to compensation or other relief?  Beyond the scope of a formal legal proceeding, how early would such an implied waiver apply?  After the lawyer’s demand letter?  Do the claim forms in auto insurance cases include a waiver of clandestine surveillance?

Insurance reporting

Provided there is no intent on the part of the lawyer to invade a party’s privacy for an injurious cause, or a reason not directly related to the lawyer’s scope of retainer, they can report claims for breach of privacy to their professional liability insurer.  In Ontario, the standard LawPro policy recognizes this risk to a limited extent, and certainly more than ordinary liability insurance.   Unlike the standard liability insurance form, the insurance protecting lawyers recognizes “invasion or violation of privacy” as a type of “INJURY” without the necessity for publication, provided the alleged invasion of privacy is directly consequential to professional services.  The way coverage is so circumscribed is by an exception to an exclusion, which states that the policy does not apply:

“to any CLAIM in any way relating to or arising out of INJURY to any person, or to mental anguish, shock, humiliation or sickness, disease or death of any person, or destruction or loss of any tangible property, including the loss of use thereof, unless as a direct consequence of the performance of PROFESSIONAL SERVICES;”

So watch out.  Investigating that fee-delinquent client will not be covered if the client turns around and sues.

Strategies to prevent being sued

The postmortem of a merger that went bad, or a real estate deal involving hidden defects, are examples where due diligence activities may come under scrutiny and solicitors might be drawn in the crossfire.

In commercial and family litigation, it is often part of an aggressive lawyer’s toolkit to attack not only the opposing party but also the opposing lawyer.  Motions to remove opposing lawyer from the record, Law Society complaints, and other “tricks of the trade” abound, sometimes not with the best of intentions.  In recent years, parties have sued expert witnesses for negligent reporting of medical evaluations, opposing lawyers for being too aggressive, and even court officials for their conduct while in office.   On examination for discovery, parties may obtain information about surveillance and other investigations.  Look out for your opponent in a civil suit to start checking up on the propriety of the investigator’s conduct.

It has always been part of our professional standards to conduct inquiries out of a law office in an above-board, non-deceptive way.  Lawyers should closely consider whether investigators, auditors and other experts retained to be part of the lawyer’s brief, are properly instructed.  How aggressive is the investigator?  Are they using sources such as former colleagues in the police, to obtain information?  Many of these activities could already be in breach obligations to various stakeholders under the Rules of Professional Conduct, if the lawyer’s agent in the field is not properly instructed.  With the decision in Jones, it will not be long before parties consider it tactically advantageous to sue an opposing lawyer for a breach of privacy, as part of ongoing litigation.

The flip side of this is the negligence suit brought by an unsatisfied client, who may feel a lawyer lost a case because of a failure to delve intrusively enough into another party’s case.  In this respect, the tort establishes a zone of defence: lawyers should not be found negligent for having failed to breach another party’s right to privacy.

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Comments

  1. Having read the Jones decision, I honestly don’t see it opening up a tortfeasor’s can of worms for lawyers. Fundamentally, it just definitively established the elements for a tort of privacy in Ontario:

    “The key features of this cause of action are, first, that the defendant’s conduct must be intentional, within which I would include reckless; second that the defendant must have invaded, without lawful justification, the plaintiff’s private affairs or concerns; and third, that a reasonable person would regard the invasion as highly offensive causing distress, humiliation or anguish.”

    The court goes on to say that a statement of these elements won’t open the proverbial floodgates of litigation beyond where they have heretofore developed. In fact, the court went on to note competing claims in other matters (for example, freedom of speech in defamation claims).

    No, lawyers aren’t “sitting ducks”. Facts-wise, other than in reference to the elements I excerpted above, the Jones case does not offer us much guidance on the matter of litigation searches that might infringe on privacy. Had the Jones decision pertained to facts involving a litigation search, I’d find the question more relevant.

    Now, if my client were suing a fellow bank employee for breach of privacy arising from the other employee’s improper use of the employer’s private database, well, that’s another story. That’s where Jones is your leading case…

  2. The privacy office has already cited law firms for PIPEDA breaches for doing credit checks in advance of litigation. Frankly, other provinces have recognized the tort of invasion of privacy without the legal profession crumbling into dust, so I wouldn’t worry too much.

    • Thanks, David. PIPEDA and similar Acts generally deal with information stored by organizations, and yes there have been some law firms ensnared for pre-litigation credit investigations. The privacy regulatory regime to date did not encompass the host of intrusive investigative practices employed in areas such as Family Law and Personal Injury Law, which go beyond stored financial information but actually intrude into everyday personal activities, offshore financial institutions not covered by PIPEDA, etc. The court in Jones went beyond the stored information paradigm and opened up privacy as a right to seclusion. Seclusion is a word used 27 times in Jones. Seclusion goes beyond stored information and is essentially a right to be left alone.

      A further consequence in litigation could be a host of interlocutory steps arising from one party’s lawyer obtaining private information outside the discovery rules. Lawyers have been removed from the record for stumbling on privileged information in Anton Piller searches, so I can foresee removal motions based on non-sanctioned receipt of private information. Can evidence be excluded on the basis that it was obtained through unlawful means? Will a lawyer’s failure to give proper advice to an investigator’s use of a telephoto camera result in critical evidence being ruled inadmissible – leading to a negligence suit?

      As far as I know, there has been no appellate judgment from another province recognizing the stand-alone tort. In Jones, the court stated, at para. 33: “… there appears to be no appellate decision from another province definitively establishing a common law right of action for intrusion upon seclusion …”

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