Privilege, Investigations, and Corporate Sustainability

This article, published in Global Investigations Review (10 May 2018), explores the emerging tension between government policy to mandate corporate human rights due diligence and judicial policy to limit privilege over internal investigations.

A dangerous fissure is emerging between legislative and judicial policy regarding internal investigations in discovery-friendly jurisdictions. Governments are increasingly willing to regulate extraterritorially the effect corporations have on human rights. The trend is reshaping the scope of corporate compliance programmes and internal investigations. At the same time, courts are ever more sceptical of the extent privilege applies in such investigations, leaving companies in the untenable position of increasing their exposure to litigation and reputational risk by complying with legislative policy.

The challenge for companies is that Canadian law (and UK law, from which Canadian courts draw guidance) on privilege over such investigations is retreating at precisely the same time that the scope of internal probes, and attendant risks, are expanding. Left unchecked, these duelling judicial and legislative trends – which are not unique to Canada or to human rights – risk tipping the scales of reason against ethical business. The virtuous company would become the architect of its own legal, financial, and reputational risks. It is therefore critical that courts adopt a more nuanced and reasonable stance on privilege to avoid undermining the legislative policy driving corporate responsibility regulation.