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Evidence - Litigation Privilege

Privilege - Generally

Lizotte v. Aviva Insurance Company of Canada (SCC, 2016)

An insurer claimed litigation privilege over documents demanded in the course of a government financial services investigation. In the course of deciding the case the Supreme Court of Canada broadly canvassed the law of litigation privilege, and that of privilege both generally and in it's other forms (eg. solicitor-client, settlement). The case is a must-read on the present law of privilege in Canada:
[1] Litigation privilege protects against the compulsory disclosure of communications and documents whose dominant purpose is preparation for litigation. Although it differs from the professional secrecy of lawyers (solicitor‑client privilege) in several respects, the two concepts do overlap to some extent. Since Canada (Privacy Commissioner) v. Blood Tribe Department of Health, 2008 SCC 44 (CanLII), [2008] 2 S.C.R. 574, it has been settled law that any legislative provision capable of interfering with solicitor‑client privilege must be read narrowly and that a legislature may not abrogate that privilege by inference, but may only do so using clear, explicit and unequivocal language. The issue in this appeal is whether this principle also applies to litigation privilege.

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[4] I would dismiss the appeal. Although there are differences between solicitor‑client privilege and litigation privilege, the latter is nonetheless a fundamental principle of the administration of justice that is central to the justice system both in Quebec and in the other provinces. It is a class privilege that exempts the communications and documents that fall within its scope from compulsory disclosure, except where one of the limited exceptions to non‑disclosure applies.

[5] The requirements established in Blood Tribe apply to litigation privilege. Given its importance, this privilege cannot be abrogated by inference and cannot be lifted absent a clear, explicit and unequivocal provision to that effect. Because the section at issue provides only for the production of “any . . . document” without further precision, it does not have the effect of abrogating the privilege. It follows that Aviva was entitled to assert litigation privilege in this case and to refuse to provide the syndic with the documents that fall within the scope of that privilege.

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[19] Litigation privilege gives rise to an immunity from disclosure for documents and communications whose dominant purpose is preparation for litigation. The classic examples of items to which this privilege applies are the lawyer’s file and oral or written communications between a lawyer and third parties, such as witnesses or experts: J.‑C. Royer and S. Lavallée, La preuve civile (4th ed. 2008), at pp. 1009‑10.

[20] Litigation privilege is a common law rule of English origin: Lyell v. Kennedy (No. 2) (1883), 9 App. Cas. 81 (H.L.). It was introduced to Canada, including Quebec, in the 20th century as a privilege linked to solicitor‑client privilege, which at the time was considered to be a rule of evidence that was necessary to ensure the proper conduct of trials: A. Cardinal, “Quelques aspects modernes du secret professionnel de l’avocat” (1984), 44 R. du B. 237, at pp. 266‑67. In an oft‑cited case, Jackett P. of the former Exchequer Court of Canada explained the purpose of litigation privilege, once known as the lawyer’s brief rule, as follows:
Turning to the “lawyer’s brief” rule, the reason for the rule is, obviously, that, under our adversary system of litigation, a lawyer’s preparation of his client’s case must not be inhibited by the possibility that the materials that he prepares can be taken out of his file and presented to the court in a manner other than that contemplated when they were prepared. What would aid in determining the truth when presented in the manner contemplated by the solicitor who directed its preparation might well be used to create a distortion of the truth to the prejudice of the client when presented by someone adverse in interest who did not understand what gave rise to its preparation. If lawyers were entitled to dip into each other’s briefs by means of the discovery process, the straightforward preparation of cases for trial would develop into a most unsatisfactory travesty of our present system. [Emphasis added.]

(Susan Hosiery Ltd. v. Minister of National Revenue, [1969] 2 Ex. C.R. 27, at pp. 33‑34)
[21] Because of these origins, litigation privilege has sometimes been confused with solicitor‑client privilege, both at common law and in Quebec law: Royer and Lavallée, at pp. 1003‑4; N. J. Williams, “Discovery of Civil Litigation Trial Preparation in Canada” (1980), 58 Can. Bar Rev. 1, at pp. 37‑38.

[22] However, since Blank was rendered in 2006, it has been settled law that solicitor‑client privilege and litigation privilege are distinguishable. In Blank, the Court stated that “[t]hey often co‑exist and [that] one is sometimes mistakenly called by the other’s name, but [that] they are not coterminous in space, time or meaning” (para. 1). It identified the following differences between them:
• The purpose of solicitor‑client privilege is to protect a relationship, while that of litigation privilege is to ensure the efficacy of the adversarial process (para. 27);

• Solicitor‑client privilege is permanent, whereas litigation privilege is temporary and lapses when the litigation ends (paras. 34 and 36);

• Litigation privilege applies to unrepresented parties, even where there is no need to protect access to legal services (para. 32);

• Litigation privilege applies to non‑confidential documents (para. 28, quoting R. J. Sharpe, “Claiming Privilege in the Discovery Process”, in Special Lectures of the Law Society of Upper Canada (1984), 163, at pp. 164‑65);

• Litigation privilege is not directed at communications between solicitors and clients as such (para. 27).
[23] The Court also stated that litigation privilege, “unlike the solicitor‑client privilege, is neither absolute in scope nor permanent in duration” (Blank, at para. 37). Moreover, the Court confirmed that only those documents whose “dominant purpose” is litigation (and not those for which litigation is a “substantial purpose”) are covered by the privilege (para. 60). It noted that the concept of “related litigation”, which concerns different proceedings that are brought after the litigation that gave rise to the privilege, may extend the privilege’s effect (paras. 38‑41).

[24] While it is true that in Blank, the Court thus identified clear differences between litigation privilege and solicitor‑client privilege, it also recognized that they have some characteristics in common. For instance, it noted that the two privileges “serve a common cause: The secure and effective administration of justice according to law” (para. 31). More specifically, litigation privilege serves that cause by “ensur[ing] the efficacy of the adversarial process” (para. 27) and maintaining a “protected area to facilitate investigation and preparation of a case for trial by the adversarial advocate” (para. 40, quoting Sharpe, at p. 165).

[25] The differences identified in Blank between solicitor‑client privilege and litigation privilege have been adopted in Quebec law: Desjardins Assurances générales inc. v. Groupe Ledor inc., mutuelle d’assurance, 2014 QCCA 1501, at para. 8 (CanLII); Canada (Procureur général) v. Chambre des notaires du Québec, 2014 QCCA 552, at para. 47 (CanLII); Informatique Côté, Coulombe inc. v. Groupe Son X Plus inc., 2012 QCCA 2262, at para. 15 (CanLII); Union canadienne (L’), compagnie d’assurance v. St‑Pierre, 2012 QCCA 433 (CanLII), [2012] R.J.Q. 340, at paras. 23‑24; Imperial Tobacco Canada ltée v. Létourneau, 2012 QCCA 2260, at paras. 7‑8 (CanLII); Société d’énergie de la Baie James v. Groupe Aecon ltée, 2011 QCCA 646, at para. 14 (CanLII); Fournier Avocats inc. v. Cinar Corp., 2010 QCCA 2278, at para. 21 (CanLII). In light of Blank and the subsequent case law, the earlier obiter dictum of LeBel J. in Foster Wheeler on which the motion judge relied in the instant case (at para. 63) must be placed in its proper context. In Foster Wheeler, LeBel J. wrote that litigation privilege “is now being absorbed into the Quebec civil law concept of professional secrecy” (para. 44). However, that observation referred to a tendency that is no longer representative of the state of the law in Quebec. Moreover, because litigation privilege applies, for example, to an unrepresented party without the involvement of a professional counsellor (Blank, at para. 27), it cannot be said, despite the common characteristics, that it has been absorbed into, or constitutes a component or subcategory of, the institution of professional secrecy.

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(1) Litigation Privilege is a Class Privilege

[32] There are two types of privileges in our law: class privileges and case‑by‑case privileges. A class privilege entails a presumption of non‑disclosure once the conditions for its application are met. It is “more rigid than a privilege constituted on a case‑by‑case basis”, which means that it “does not lend itself to the same extent to be tailored to fit the circumstances”: R. v. National Post, 2010 SCC 16 (CanLII), [2010] 1 S.C.R. 477, at para. 46. On the other hand, “[t]he scope of [a] case‑by‑case privilege”, as the name suggests, “will depend, as does its very existence, on a case‑by‑case analysis, and may be total or partial” (National Post, at para. 52). The four “Wigmore criteria”, the last of which is a balancing of the interests at stake, are applied:
The “Wigmore criteria” consist of four elements which may be expressed for present purposes as follows. First, the communication must originate in a confidence that the identity of the informant will not be disclosed. Second, the confidence must be essential to the relationship in which the communication arises. Third, the relationship must be one which should be “sedulously fostered” in the public good (“Sedulous[ly]” being defined . . . as “diligent[ly] . . . deliberately and consciously”). . . . Finally, if all of these requirements are met, the court must consider whether in the instant case the public interest served by protecting the identity of the informant from disclosure outweighs the public interest in getting at the truth. . . .

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The fourth Wigmore criterion does most of the work. Having established the value to the public of the relationship in question, the court must weigh against its protection any countervailing public interest such as the investigation of a particular crime (or national security, or public safety or some other public good). [paras. 53 and 58]
[33] In my opinion, litigation privilege is a class privilege. Once the conditions for its application are met, that is, once there is a document created for “the dominant purpose of litigation” (Blank, at para. 59) and the litigation in question or related litigation is pending “or may reasonably be apprehended” (para. 38), there is a “prima facie presumption of inadmissibility” in the sense intended by Lamer C.J. in R. v. Gruenke, 1991 CanLII 40 (SCC), [1991] 3 S.C.R. 263:
The parties have tended to distinguish between two categories: a “blanket”, prima facie, common law, or “class” privilege on the one hand, and a “case‑by‑case” privilege on the other. The first four terms are used to refer to a privilege which was recognized at common law and one for which there is a prima facie presumption of inadmissibility (once it has been established that the relationship fits within the class) unless the party urging admission can show why the communications should not be privileged (i.e., why they should be admitted into evidence as an exception to the general rule). [Emphasis deleted; p. 286]
[34] From this perspective, litigation privilege is similar to settlement privilege and informer privilege, which the Court has already characterized as class privileges: Sable Offshore Energy Inc. v. Ameron International Corp., 2013 SCC 37 (CanLII), [2013] 2 S.C.R. 623, at para. 12; R. v. Basi, 2009 SCC 52 (CanLII), [2009] 3 S.C.R. 389, at para. 22. Like them, litigation privilege has long been recognized by the courts and has been considered to entail a presumption of immunity from disclosure once the conditions for its application have been met: Blank, at paras. 59‑60; Compagnie d’assurance AIG du Canada v. Solmax International inc., 2016 QCCA 258, at paras. 4‑8 (CanLII); Groupe Ledor inc., at paras. 8‑9; St‑Pierre, at para. 41; Axa Assurances inc. v. Pageau, 2009 QCCA 1494, at para. 2 (CanLII); Conceicao Farms Inc. v. Zeneca Corp. (2006), 2006 CanLII 31976 (ON CA), 83 O.R. (3d) 792 (C.A.), at paras. 20‑21; College of Physicians and Surgeons of British Columbia v. British Columbia (Information and Privacy Commissioner), 2002 BCCA 665 (CanLII), 23 C.P.R. (4th) 185, at paras. 31‑33 and 72; Apotex Fermentation Inc. v. Novopharm Ltd. (1994), 95 Man. R. (2d) 186 (C.A.), at paras. 18‑20; R. v. Brouillette (1992), 1992 CanLII 3599 (QC CA), 78 C.C.C. (3d) 350 (Que. C.A.), at p. 368; Opron Construction Co. v. Alberta (1989), 1989 ABCA 279 (CanLII), 100 A.R. 58 (C.A.), at para. 5.

[35] Furthermore, several courts and authors have, although sometimes diverging on the basis for the privilege or the applicable criteria, explicitly concluded that litigation privilege is in fact a class privilege: R. v. Lanthier, 2008 CanLII 13797 (ON SC), 2008 CanLII 13797 (Ont. S.C.J.), at para. 6; Kennedy v. McKenzie (2005), 17 C.P.C. (6th) 229 (Ont. S.C.J.), at para. 22; R. v. Soomel, 2003 BCSC 140, at para. 76 (CanLII); H. C. Stewart, Halsbury’s Laws of Canada: Evidence (2014 Reissue), at para. HEV‑183; B. Billingsley, “‘Ingathered’ Records and the Scope of Litigation Privilege in Canada: Does Litigation Privilege Apply to Copies or Collections of Otherwise Unprivileged Documents?” (2014), 43 Ad. Q. 280, at pp. 283‑85.

[36] Thus, although litigation privilege differs from solicitor‑client privilege in that its purpose is to facilitate a process — the adversary process (Blank, at para. 28, quoting Sharpe, at paras. 164‑65) — and not to protect a relationship, it is nevertheless a class privilege. It is recognized by the common law courts, and it gives rise to a presumption of inadmissibility for a class of communications, namely those whose dominant purpose is preparation for litigation (Blank, at para. 60).

[37] This means that any document that meets the conditions for the application of litigation privilege will be protected by an immunity from disclosure unless the case is one to which one of the exceptions to that privilege applies. As a result, the onus is not on a party asserting litigation privilege to prove on a case‑by‑case basis that the privilege should apply in light of the facts of the case and the “public interests” that are at issue (National Post, at para. 58).

(2) Litigation Privilege is Subject to Clearly Defined Exceptions and Not to a Case‑by‑Case Balancing Exercise

[38] Despite the fact that litigation privilege is a class privilege, the syndic proposes that the Court adopt the balancing test developed by Doherty J.A. of the Ontario Court of Appeal in his dissenting reasons in General Accident Assurance Co. v. Chrusz (1999), 1999 CanLII 7320 (ON CA), 45 O.R. (3d) 321:
Litigation privilege claims should be determined by first asking whether the material meets the dominant purpose test . . . . If it meets that test, then it should be determined whether in the circumstances the harm flowing from non‑disclosure clearly outweighs the benefit accruing from the recognition of the privacy interest of the party resisting production. [Emphasis added; p. 365.]
[39] I disagree. In the context of privileges, the exercise of balancing competing interests is associated with case‑by‑case privileges (National Post, at para. 58), not class privileges. Rosenberg J.A., who wrote reasons concurring with those of Carthy J.A. for the majority in Chrusz, refused to apply such a test, citing the uncertainty that would be caused by a case‑by‑case approach of balancing the advantages and disadvantages of applying the privilege. I adopt his comments on this point:
The litigation privilege is well established, even if some of the nuances are not. In my view, the competing interests or balancing approach proposed by Doherty J.A. is more appropriate for dealing with emerging claims of privilege . . . . I am concerned that a balancing test would lead to unnecessary uncertainty and a proliferation of pre‑trial motions in civil litigation.

That is not to say that litigation privilege is absolute. The Supreme Court of Canada has made it clear that all of the established privileges are subject to some exceptions. . . .

In my view, with established privileges like solicitor‑client privilege and litigation privilege it is preferable that the general rule be stated with as much clarity as possible. Deviations from the rule should be dealt with as clearly defined exceptions rather than as a new balancing exercise each time a privilege claim is made . . . . [Emphasis added; p. 369.]
[40] Moreover, other courts have cited Justice Rosenberg’s analysis with approval: Brown v. Cape Breton (Regional Municipality), 2011 NSCA 32 (CanLII), 302 N.S.R. (2d) 84, at paras. 57‑58; Llewellyn v. Carter, 2008 PESCAD 12 (CanLII), 278 Nfld. & P.E.I.R. 96, at para. 52; Kennedy, at para. 39; Davies v. American Home Assurance Co. (2002), 2002 CanLII 62442 (ON SC), 60 O.R. (3d) 512 (S.C.J.), at paras. 43‑46. Similarly, in R. v. Barros, 2011 SCC 51 (CanLII), [2011] 3 S.C.R. 368, this Court discussed the certainty that was needed in the case of another fundamental privilege, that of the police informer, explaining as follows why a case‑by‑case determination of whether relevant information is privileged would undermine the confidence of those who are protected by the privilege:
Police rely heavily on informers. Because of its almost absolute nature, the privilege encourages other potential informers to come forward with some assurance of protection against reprisal. A more flexible rule that would leave disclosure up to the discretion of the individual trial judge would rob informers of that assurance and sap their willingness to cooperate. [Emphasis added; para. 30.]
The same considerations apply to litigation privilege.

[41] What must be done therefore is to identify, where appropriate, specific exceptions to litigation privilege rather than conducting a balancing exercise in each case. In this regard, the Court held in Smith v. Jones, 1999 CanLII 674 (SCC), [1999] 1 S.C.R. 455, that the exceptions that apply to solicitor‑client privilege are all applicable to litigation privilege, given that solicitor‑client privilege is the “highest privilege recognized by the courts” (para. 44). These include the exceptions relating to public safety, to the innocence of the accused and to criminal communications (paras. 52‑59 and 74‑86). They also include the exception to litigation privilege recognized in Blank for “evidence of the claimant party’s abuse of process or similar blameworthy conduct” (para. 44).

[42] Other exceptions may be identified in the future, but they will always be based on narrow classes that apply in specific circumstances. From this perspective, Aviva is proposing a new exception that is narrower than the balancing exercise being advocated by the syndic and that would apply only in the cases of urgency and of necessity. Unsurprisingly, the syndic says that she agrees with the substance of this exception.

[43] The idea of an exception based on urgency and necessity is of course appealing. It would help compensate for the fact that, even though litigation privilege is temporary, it may sometimes delay access to certain documents that another party urgently needs in order to prevent serious harm. Such an exception would be based on criteria such as the need to obtain evidence to prevent serious harm, the impossibility of obtaining it by other means and the urgency of obtaining it before the [translation] “natural” lapsing of the effects of litigation privilege.

[44] This exception would certainly be much narrower than the excessively broad balancing exercise proposed by the syndic. What would be required would be not to ask in each case whether litigation privilege should protect a document whose dominant purpose is preparation for litigation, but to lift the privilege in the rare cases in which a party succeeds in discharging its heavy burden with regard to this exception. Therefore, in a situation similar to the one in this case, it would not be enough for a syndic to simply invoke the need to sanction alleged disciplinary breaches in order to lift the privilege. If that did suffice, such a request would always be sufficient to establish the urgency exception, and that exception would then become the rule. This, in my view, would be improper. To establish the urgency exception in a disciplinary context, the existence of an urgent investigation in which extraordinary harm is apprehended during the period in which litigation privilege applies would instead be needed.

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(3) Litigation Privilege Can Be Asserted Against Third Parties, Including Third Party Investigators Who Have a Duty of Confidentiality

[46] At the hearing, the syndic submitted, lastly, that in every case, it should not be possible to assert litigation privilege against third parties: it should apply only to parties to the litigation in question. In the case at bar, because the syndic is not a party to any litigation related to the litigation between the insurer and the insured person, that privilege cannot, in her opinion, be asserted against her. This is because of the limited purpose of the privilege, which is intended to facilitate the adversarial process in which the parties alone are involved. In the alternative, the syndic proposes the adoption of an exception to the effect that the privilege cannot be asserted against third party investigators who have a duty of confidentiality.

[47] These arguments are unconvincing. I instead agree with the courts that have held that litigation privilege can be asserted against anyone, including administrative or criminal investigators, not just against the other party to the litigation: R. v. Kea (2005), 27 M.V.R. (5th) 182 (Ont. S.C.J.), at paras. 43‑44; D’Anjou v. Lamontagne, 2014 QCCQ 11999, at paras. 92‑93 (CanLII).

[48] There are several reasons that justify this conclusion. The first is that the disclosure of otherwise protected documents to third parties who do not have a duty of confidentiality would entail a serious risk for the party who benefits from the protection of litigation privilege. There would be nothing to prevent a third party to whom such documents are disclosed from subsequently disclosing them to the public or to the other party, which could have a serious adverse effect on the conduct of the litigation in question. The documents could then be presented to the court in a manner other than that contemplated by the party protected by the privilege. This is the very kind of harm that litigation privilege is meant to avoid: Susan Hosiery Ltd., at pp. 33‑34. Moreover, in Blank, which concerned the Access to Information Act, this Court held that a provision authorizing the government to invoke solicitor‑client privilege could also be used to invoke litigation privilege in order to deny a request for access to information by a third party to the litigation (for example, the media or a member of the public) (para. 4).

[49] There are also cases in which the courts have held that disclosure to a third party of a document covered by litigation privilege could result in a waiver of the privilege as against all: Rodriguez v. Woloszyn, 2013 ABQB 269 (CanLII), 554 A.R. 8, at para. 44; Aherne v. Chang, 2011 ONSC 3846 (CanLII), 337 D.L.R. (4th) 593, at paras. 12‑13. The decisions in those cases are based on the assumption that litigation privilege can be asserted against third parties. To conclude that there are consequences associated with disclosure to third parties, one must first assume that confidentiality in relation to those parties corresponds to a normal application of the privilege.

[50] As for the exception the syndic proposes for third party investigators who have a duty of confidentiality, it is hardly more justifiable. Even where a duty of confidentiality exists, the open court principle applies to proceedings that can be initiated by a syndic (s. 376 ADFPS and s. 142 of the Professional Code; art. 11 of the Code of Civil Procedure, CQLR, c. C‑25.01). If, in the case at bar, the syndic had decided to file a complaint with the Chamber’s discipline committee, or if she had decided to turn to the common law courts (to obtain, for example, an injunction against the person being investigated, as the syndic of the Barreau du Québec did in Guay v. Gesca ltée, 2013 QCCA 343 (CanLII), [2013] R.J.Q. 342), it is far from certain, in light of the open court principle, that the documents that would otherwise be protected by litigation privilege would not have had to be disclosed in the course of those proceedings.

[51] In Basi, this Court held that informer privilege could not be lifted in favour of defence counsel merely because those counsel were bound by orders and undertakings of confidentiality. In the Court’s opinion, “[n]o one outside the circle of privilege may access information over which the privilege has been claimed until a judge has determined that the privilege does not exist or that an exception applies” (para. 44). In that case, the fact that the third parties had duties of confidentiality and the reduced risk of harm did not preclude asserting informer privilege against them.

[52] This reasoning applies with equal force to litigation privilege. It would not be appropriate to exclude third parties from the application of this privilege or to expose the privilege to the uncertainties of disciplinary and legal proceedings that could result in the disclosure of documents that would otherwise be protected. Moreover, even assuming that there is no risk that a syndic’s inquiry will result in the disclosure of privileged documents, the possibility of a party’s work being used by the syndic in preparing for litigation could discourage that party from writing down what he or she has done. This makes it clear why it must be possible to assert litigation privilege against anyone, including a third party investigator who has a duty of confidentiality and discretion. I am thus of the view that unless such an investigator satisfies the requirements of a recognized exception to the privilege, it must be possible to assert the privilege against him or her.

[53] I would add that any uncertainty in this regard could have a chilling effect on parties preparing for litigation, who may fear that documents otherwise covered by litigation privilege could be made public. The United States Supreme Court gave a good description of this chilling effect, which litigation privilege (referred to as the “work product doctrine”) is in fact meant to avoid:
Historically, a lawyer is an officer of the court and is bound to work for the advancement of justice while faithfully protecting the rightful interests of his clients. In performing his various duties, however, it is essential that a lawyer work with a certain degree of privacy, free from unnecessary intrusion by opposing parties and their counsel. Proper preparation of a client’s case demands that he assemble information, sift what he considers to be the relevant from the irrelevant facts, prepare his legal theories and plan his strategy without undue and needless interference. That is the historical and the necessary way in which lawyers act within the framework of our system of jurisprudence to promote justice and to protect their clients’ interests. This work is reflected, of course, in interviews, statements, memoranda, correspondence, briefs, mental impressions, personal beliefs, and countless other tangible and intangible ways — aptly though roughly termed by the Circuit Court of Appeals in this case as the “work product of the lawyer.” Were such materials open to opposing counsel on mere demand, much of what is now put down in writing would remain unwritten. An attorney’s thoughts, heretofore inviolate, would not be his own. Inefficiency, unfairness and sharp practices would inevitably develop in the giving of legal advice and in the preparation of cases for trial. The effect on the legal profession would be demoralizing. And the interests of the clients and the cause of justice would be poorly served. [Emphasis added.]

(Hickman v. Taylor, 329 U.S. 495 (1947), at pp. 510‑11)
[54] In short, in the instant case, the courts below were right to hold that the litigation privilege invoked by Aviva could be asserted against the syndic. None of the exceptions to its application justify lifting the privilege in this case. Thus, all that remains to be determined is whether the privilege can, as the syndic submits, be lifted by applying the statutory provision — s. 337 ADFPS — that is central to the case.



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