Appellate Court Recognizes And Protects Litigation Privilege In A Regulatory Investigation

An appellate court recently concluded that litigation privilege may be appropriately claimed by a target of a regulatory investigation. The Court in TransAlta Corporation v Market Surveillance Administrator reaffirmed the importance and protection afforded to litigation privilege claims, recognizing there is the need for both legal advice and the protection of an associated zone of privacy when a party is facing an investigation that could result in a prosecution with serious consequences.

Background

In 2011, Alberta's independent electricity market regulator, the Market Surveillance Administrator (MSA), notified TransAlta Corporation that it was commencing an investigation under the Alberta Utilities' Commission Act (Act) into whether TransAlta had, among other things, artificially influenced the price of electricity by timing the required maintenance shutdowns of some of its power plants to take place during periods of high demand.