Transactional Common Interest Privilege: Can You Safely Share Privileged Documents With A Transacting Party?

Introduction

Companies share privileged records with transaction counterparties for many different reasons — to optimize tax consequences of a restructuring or to conduct due diligence, for example. But once a company shares a document with a transaction counterparty, can it later assert privilege? Probably, but proceed with caution: while the heavy weight of authority favours transactional common interest privilege, the recent Federal Court case Iggillis Holdings Inc. v. Canada (National Revenue) (Iggillis) held that parties waive privilege if they share records without anticipated or pending litigation.¹

What is Common Interest Privilege?

Normally, when a privileged record is disclosed to a third party, privilege is waived. Common interest privilege is an exception to that waiver.