A Change To Ontario Law On Disclosure Of Privileged Documents To Auditors

The Divisional Court of Ontario recently considered the law in Ontario regarding the legal protections that attach to privileged solicitor-client communications shared by a client with its auditors. In a 1994 decision, Cineplex Odeon ¹, it had been held that a client is required to waive solicitor-client privilege for all purposes when its auditor requests a privileged document that is required for the completion of the audit. In the new ruling, the Divisional Court concluded that, given a company’s statutory obligation to cooperate with its auditor and the public policy rationale for encouraging full and frank disclosure, when a company provides a privileged document to its auditor for the purpose of the audit, the document remains protected by the privilege against any further disclosure.