A challenge faced by corporate parties in civil litigation is that the evidence of its employees will in most cases determine its liability. A company may have reasonable or appropriate policies and procedures in place, but where the evidence demonstrates that employees were not appropriately trained or directed, or had failed to follow standard policy, liability exposure may result.
Because employees can present the weakest link in a defence, they inevitably may become the focus of opposing counsel’s inquiries. This paper will consider the Rules of Court and supporting law in place governing access to employees and their records. Also considered is the circumstance when opposing counsel has accessed a former employee and asserted litigation privilege over statements taken.
Examinations of an Employee as a Representative
Rule 7-2 (5) governs discoveries of corporate parties. An examination is limited to one representative of the corporate party. Even in multi-party actions, only one representative may be examined unless there are separate issues between the defendants.[1]
Typically the representative put forward by a corporate party is an individual involved in management who may speak to the general operations of that company, interpret the business records, and summarize the activities of the various employees involved in the events relating to the litigation. The advantage in selecting such an individual is two-fold. Firstly, the representative in most cases, or ideally, will be knowledgeable, sophisticated and well-spoken in corporate affairs; Secondly, the representative will likely be removed from the actual events (i.e attending an accident scene) and will serve as a conduit for any requests left at the discovery.
However, the examining counsel has the prima facie right to select a representative of the corporate party for the examination.[2] Counsel may select a past or present director, officer, employee, agent or external auditor of the party, [3] without any justification for their choice of representative.[4]However, in choosing a representative, counsel may be disentitled to examine a further representative later if the first should prove unsatisfactory[5].
The Court does have discretion, on application of the opposing party, to substitute another name.[6]However it is not enough to say that another representative has more knowledge. The exercise of discretion must turn on a balance of prejudice. In the absence of overwhelming prejudice, the court should defer to the choice of the examining party. A lack of knowledge must be linked to prejudice before it will defeat the primary choice.
An opposing counsel also has the option of seeking a second examination. Should the representative put forward by the corporate party prove insufficient in responding to matters raised on discovery, counsel may successfully apply for a secondary examination with a specific employee as the representative.[7] It is necessary to demonstrate that questions asked have not been answered, or that answers given are incomplete, unresponsive or ambiguous, or that follow-up questions have similarly not been answered in a clear, complete and responsive way.[8] The Court will consider the nature and relevance of the evidence sought and the most practical, convenient and expeditious result.[9] It must be shown that the first witness is incapable of giving the evidence either through his own knowledge or by informing himself.[10]
In those instances where the examining party selects an employee, it should be noted that there is nothing in the rules that gives the examining party the right to insist that the witness to be examined for discovery be “authorized” by the corporate litigant who produces the witness, or to insist that the witness gives answers that are “binding” on the corporate litigant.[11]
During an examination, it is appropriate for an employee to be asked to give an opinion on matters relating to the employee’s own professional conduct where that conduct is in issue.[12] If the employee has expertise to form such an opinion he or she may also be asked of his opinion at the present time and whether he held it before. The employee cannot be asked to go away and form an opinion. However, the employee may be asked to go away and inform him or herself of an opinion which another person in the organization held or holds, but the employee may not be asked to go away and inform him or herself about the corporation’s opinion if that will require employees to sit together to form policy as to which opinion should be corporate opinion.
Hypothetical questions may also be put to the employee, provided they relate to the case and are not overly broad or vague[13]. Objections may only be limited to where the questions are not clear, if they involve questions of law, or if they are vague, confusing, misleading or overly broad.
Pre-trial examination of an employee as a witness
Rule 7-5 governs the pre-trial examination of witnesses. It applies to past and present officer and employees of a corporate party.[14]
Opposing counsel is permitted to approach a corporate party’s officers and employees for the purpose of interviewing them in relation to the litigation. A corporate party and its counsel must not fetter any such access, but are permitted to seek involvement in same. This scope of involvement can include:
- notifying the employees of their right to participate in any such interviews and ability to request all inquiries in writing and respond to same in kind[15]
- relaying any communications from the employees to opposing counsel, if the employees are agreeable to same[16]
- attending any interviews of the employees by opposing counsel, if the employees are agreeable to same[17]
If the employee provides a responsive statement, the applicant is not entitled to submit further questions arising out of the responses of the proposed witnesses which are in the form of cross – examination.[18]
A difficulty for corporate parties is where an employee refuses to respond at all to the inquiries or has given a conflicting statement. In which case, Rule 7-5 permits counsel to seek a discretionary order requiring the employee to attend a pre-trial examination.
An application under rule 7-5 requires that notice of the application be given to the employee and also served on all interested parties.[19] Counsel must show by affidavit evidence that the evidence of the employee may be material, and that the employee has refused or neglected to give a responsive statement, either orally or in writing, or has given conflicted statements.[20]
The fact that the employee has not made himself available to be interviewed does not amount to a refusal to give a responsive statement.[21] However, provided written responses may not satisfy the Court that the employee was being responsive.[22] The Court may order an examination where it finds the corporate party appears to be exerting control over the witness[23].
Should an application be brought, a Court may find the corporate party to have no standing for opposing[24]. Exception may be where the corporate party seeks to bring to the court’s attention any evidence demonstrating responsiveness,[25] or where the information sought from the witness may be privileged;[26] or where the corporate party argues the conduct of counsel in pursuing the pre-trial examination demonstrates harassment[27]. Consideration should then be given to the corporate party retaining separate counsel for the employee;
In the event that a pre-trial examination is ordered, a corporate party will similarly have no standing for objecting to any questions asked of the employee. However, the corporate party will have opportunity to cross-examine the employee after the examination by the party who obtained the examination order. Thereafter, the party who obtained the order is entitled to a further cross examination of the employee.[28]
An examination conducted of an employee under Rule 7-5 has a limit of 3 hours in total for all parties on record.[29] The scope of inquiry is broader under this rule than under Rule 7-2 (Examinations for Discovery). It is not limited to matters in issue between the parties question but covers all that is relevant to all parties in the action including other defendants or third parties. Questions may also be directed to the witness even though the answer may be in the nature of an opinion as given by an expert.[30] Unlike an examination under Rule 7-2, the employee can only speak to matters within his or her knowledge and cannot be required to inform herself.[31]Testimony of witnesses also cannot be read into evidence at trial but may only be used to impeach such a witness at the trial.[32]
Production of Employment Records
Employment records can serve to assist an opposing party on several fronts. Resumes may show inadequate experience; employee training materials or a lack of recorded attendance at training seminars may demonstrate a lack of knowledge; disciplinary records may indicate a history of performance problems; health records or disability benefits may demonstrate physical or mental health issues possibly affecting job performance; and a termination notice may suggest the employee’s alleged performance in an incident had resulted in his dismissal.
Although employment records can be fruitful, a general disclosure is not required nor will an application for production succeed with a supportive evidentiary basis.[33] An applicant must satisfy either the party being demanded or the Court with an explanation indicating the reason why such additional documents or classes of documents should be disclosed under Rule 7-1(11)[34].
A Court is unlikely to permit disclosure where there is no evidence from the applicant of requesting information directly from corporate party or the employee regarding his employment history, training or experience. A Court is also likely to hold that potentially private and irrelevant items contained in an employment file make the request to have the whole file overreaching, and that even where production of an employment file is made, the defendant should examine the file and disclose relevant sections only.[35] Partial disclosure may be permitted where the employment records are required to assist in locating a former employee.
Disclosing Statements of former Employees
A corporate party cannot prevent an opposing counsel from interviewing former employees or taking audio or signed statements. However, an opposing party is obliged to disclose the signed statement to a corporate party where that employee had provided authorization.[36]
If authorization is not provided, a corporate party may still apply for an order requiring production even where litigation privilege has been asserted by the opposing counsel[37]. Litigation privilege does not attach where the former employees were intimately involved in matters relating to the litigation, and where their statements deal with the surrounding circumstances. There can be no expectation of confidentiality arising from communication, and fairness requires the corporate party not be taken by surprise by statements made by one of it own employee or former employee.[38]However, the Court is unlikely to order disclosure where the sought statements are merely summations or notes of adjuster’s interviews of the employees[39], or where the interviewed employees had little to no involvement in the matters being alleged.
For counsel conducting interviews of employees, both existing and former, the Canadian Bar Association’s Code of Conduct requires counsel to notify the individuals before recording.
Under Chapter XVI, Responsibility to Lawyers and Others, and under the heading Avoidance of Sharp Practices, the Code specifically states that
The lawyer should not use a tape-recorder or other device to record a conversation, whether with a client, another lawyer or anyone else, even if lawful, without first informing the other person of the intention to do so.
[1] Dann v. Dhaliwal, 2012 BCSC 1817 – Court held Rule 7-2(5) did not give a party an unlimited right to discover the representative of its choice. In the case of multiple parties who have a commonality of interest, they will in the first instance usually be restricted to examining a single representative of the corporate party whom they are adverse in interest. If that representative fails to provide adequate information, the discovering parties may apply for leave to examine a second representative. Also see Jordan Developments Corp. v Canaccord Capital Corp, 2005 BCSC 378 and Nesbit v. Midland Walwyn Capital Inc. (1994), 90 B.C.L.R. (2d) 231 (S.C.) in which the Court concluded that when there are two actions arising out of a common matter and the respective plaintiffs are represented by separate counsel, they are not entitled as of right to examine separate representatives of the corporate defendants. Also see Executive Inn Inc. v. Pfeffer, 2005 BCSC 1677, in which the corporate plaintiff sued two separate defendants. The defendants were represented by different counsel. After the first defendant had completed its examination of a corporate officer, the second defendant applied to examine a different officer. Garson J., as she then was, allowed the separate examinations because she found that there was not a commonality of interests between the defendants. The claims against them were based on different legal analyses and she found that the scopes of discovery of the two defendants may be quite different.
[2] Rule 7-2(5) (c)(ii); MacDonald v. Roth (2000), 83 B.C.L.R. (3d) 171 (S.C.)
[3] Rule 7-2(5) (c)(ii)
[4] Hollinger Canadian Publishing Holdings Co. v. Mostad Publications Ltd., 2007 BCSC 1927
[5] Westcoast Transmission Co. v. Interprovincial Steel and Pipe Corp. (1985), 59 B.C.L.R. 42 (S.C.)
[6] MacDonald, supra – Court noted that the most common ground for substitution is a demonstration of conflict of interest between a chosen representative and the corporate party. Standing alone, this is not a sufficient ground, but may be taken into consideration by the Court in determining whether the balance of prejudice favors substitution. Another ground is if there are allegations of fraud where it may seriously prejudice the corporate party if these allegation cannot be canvassed through the person with the greater knowledge. Also see Landmark Properties Ltd. v. Crown Trust Company (1984), 49 B.C.L.R. 268 in which the court did not permit an examination of a former officer considered likely to harbor feelings of hostility toward the defendant and thereby considered capable of prejudicing the defendant in having the officer’s statements put into evidence at the trial; However also note Bank of British Columbia v. North Shore Motors Ltd. (1979), 12 C.P.C 292 where evidence of hostility on the part of the person sought to be examined did not constitute a complete bar to the discovery of that person.
[7] Conseil scolair francophone de la Colombie-Britannique v. British Columbia 2012 BCSC 582 – Court determined that discretion to allow a second representative to be examined should only be exercised where the court is satisfied that the firs representative is unable or unwilling to inform himself and the court is satisfied that the discovery cannot be reasonably conducted on the basis of the examine informing himself.
[8] Westcoast Transmission Co., supra.
[9] Rogers v. Bank of Montreal (1986), 1 B.C.L.R. (2d) 132
[10] Bland v. International Sealand Shipping Service Ltd. (1980), 18 B.C.L.R. 40
[11] Dillingham Construction Ltd. v. British Columbia Hydro and Power Authority (1990), 44 B.C.L.R. (2) 243 (S.C) – Plaintiff had applied for an order that the defendant authorize its discovery representative to give evidence at the continuation of an examination, with the evidence of representative binding on the defendant. The Court determined there was nothing in the rules that required a corporate litigant to “authorize” any witness to give answers “binding” on it. Nor was there any duty on the witness to seek, much less to obtain, any such authorization.
[12] Bilfinger Berger (Canada) Inc. v. Greater Vancouver Water District, 2013 BCSC 1892
[13] Forliti (Guardian ad litem of) v. Woolley (2002), 21 C.P.C (5th) 246 (B.C.S.C.)
[14] Lord v. Royal Columbian Hospital (1980), 23 B.C.L.R. 17 at p. 19; Yemen Salt Mining v. Rhodes – Vaughan Steel (#2) (1977), 3 B.C.L.R. 98. However, note the decision of Corwest Fabrications Ltd. v. Hodgosn’s Steel & Iron Works Ltd. (1977), 3 B.C.L.R. 97, held at the same time as Yemen in which Berger J. considered Rule 28 (now 7-5) did not apply and that an offer or employee of a party of record could only be examined under rule 7-2. This decision, however, does not appear to have been followed.
[15] Rintoul v. Granger, 2008 BCSC 1852
[16] Rintoul, supra– Court held that the fact a witness had chosen to communicate through counsel does not amount to a refusal to give a responsive statement.
[17] Cabezas v. HMTQ, 2015 BCSC 449
[18] Continental Securities v. McLeod (1994), 94 B.C.L.R. (2d) 375
[19] Rule 7-5 (4); Yemen Salt Mining, supra.
[20] Rule 7-5 (3)
[21] Rintoul, supra.
[22] Coates v. Triance, 2010 BCSC 294 – Court allowed application by Plaintiff to conduct a pre-trial examination of an ICBC adjuster who procured a settlement with the Plaintiff which she subsequently sought to set aside. Plaintiff’s counsel had requested responses to 200 questions. The Court found the answers provided by the adjuster to be not responsive in a way which could help the plaintiff learn sufficient information to be able to assess the merits of the issue of whether or not there was an enforceable settlement and release.
[23] Lou v. Fenkarek, 1994 B.C.J. 1617; Cowburn v. Northern Health Authority, 2004 BCSC 1381 – the example given is where a party comes forward after a witness has been unresponsive and offers to act as a conduit to provide the witness a statement, or perhaps more accurately to act as a filter to provide the witness’s statement.
[24] Salt Mining Corp. v. Rhodes-Vaughan Steel Ltd. (1977), 3 B.C.L.R. 1 (S.C.) – Berger J. held at pg 2 “I think that in the ordinary case there is no basis for any other party to claim the right to speak to the application for an order under Rule 28. There may well be exceptions. But the case at bar is not one. In the ordinary case, only the proposed witness may speak to the application. Also see Black v. Gust et al, 2000 BCSC 991
[25] Cabezas, supra
[26] Preuse v. Miller (1986), 69 B.C.L.R. 104 – Plaintiff commenced action under the Family Compensation Act in relation to a motor vehicle accident that killed her son. Plaintiff applied for a pre-trial examination of her son’s probationary officer on the basis that the officer had material evidence relating to her deceased’s son personality traits and desire to rehabilitate. Court permitted submissions from the defendant counsel who argued the information obtained by the officer is privileged under the Correction Act and the officer should not be compelled to testify. Court allow examination to proceed but restricting scope of examination to exclude information obtained while the officer was acting in his capacity under s. 6(1) of the Correction Act, which involves preparing a pre-trial report for the prosecutor.
[27] Yemen Salt Mining, supra–Court gave the example of the opposing counsel seeking to exime the entire staff of a corporate party.
[28] Rule 7-5 (8)
[29] Rule 7-5(9)
[30] Yemen Salt Mining, supra
[31] McBain v. Martel (1982), 31 B.C.L.R. 123 (S.C.)
[32] Claasen v. McNiece (1983), 146 D.L.R. (3d) 376 at p.380
[33] Cabezas, supra
[34] Anderson v. Kauhane and Roome (unreported, February 22, 2011 Vancouver Registry No. M103201; Przybysz v. Crowe, 2011 BCSC 731
[35] Fowler v Belair Insurance, 2011 ONSC 1045 – In a bad faith claim against an insurer, the Plaintiff applicant sought production of an employment file for a former employee of the defendant insurer, who was handling the claim file at times material to the action. The defendant insurer had advised that they had no current information about her whereabouts. The Plaintiff applicant had sought the employment file on the basis of (1) to seek information that would detail her whereabouts and (2) to allow the Plaintiff to explore into whether she was fired for her handling of the insurance claim. The Court directed that the Defendant insurer examine the employment file and disclose any information therein contained that could lead to detection of the ex-employee’s current whereabouts, including her then-residential address and any express indication of where she might be moving or be subsequently employed. The Court however declined disclosure of anything further, finding that the assertion she was fired for any reasons related to this claim was unsupported by any evidence.
[36] Minnie v. ICBC, 2013 BCSC – Court held that lay witnesses or non-litigants are entitled to receive a copy of their signed statements. Litigation privilege does not apply.
[37] Ridout Wines Ltd. v. APV Crepaco of Canada Ltd. (1982), 44 B.C.L.r. 139 – Court held that a statement taken form an opposite party or an employed must be disclosed and produced, if demanded. Court also determined the litigation privilege did not attach to a statement taken from a former employee of an adverse party who was working at the time the cause of action arose.
[38] Ed Miller Sales & Rentals Ltd. v. Caterpillar Tractor Co. (1988) 94 A.R. 17 (Q.B.)
[39] Alberta v. Stearns Catalytic, 1991 ABCA 126 – action involving an explosion and fire of a building possibly resulting from poor repairs. Defendant sought production of investigation conduct by Plaintiff of defendant’s ex-employees. Court declined disclosure, noting that the desired reports were distillation of selective recitations from interviews of hundreds of ex-employees, none of whom were top management.
