Staying out of Civil Proceedings

Most regulators have a statutory confidentiality provision. Some, but not all, of those provisions protect regulators from having to produce information or act as a witness in civil disputes: F. (M.) v Dr. Sutherland, 2000 CanLII 5761 (ON CA), <http://canlii.ca/t/1cwt9>. A recent decision addressed the right of a claimant to obtain a Norwich order providing access to information about security trades to ascertain whether other, unknown, persons had manipulated the market: Harrington Global Opportunities Fund S.A.R.L. v Investment Industry Regulatory Organization of Canada, 2018 ONSC 7739 (CanLII), <http://canlii.ca/t/hwqz7>. The regulator, IIROC, did not have a statutory provision protecting it from such involvement. However, even without such a provision, the court still refused to grant the disclosure order. This decision articulates the rationale as to why such confidentiality provisions (or concepts) exist.

The Court refused to issue the disclosure order primarily on the basis that IIROC’s regulatory role required it to process complaints and, where appropriate, take regulatory action. Such a role did not create a “proximity” to the claimant such that it should be required to assist the claimant in their private claim. IIROC’s decision to maintain confidentiality about the evidence gathered in its investigations resulted from its regulatory role, respect of individuals’ privacy and desire to maintain access to sources of information for future investigations. In some respects, the claimant’s application was a collateral attack against the decision of IIROC to not proceed with the claimant’s complaint.

The Court also held that the regulator’s interest in preserving its investigative processes outweighed the claimant’s interest in pursuing its civil claims for damages.

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