Use of Illegally Obtained Information by Regulators

What should a regulator do when provided, illegally, with unsolicited information of registrant misconduct? A recurring example for regulators relates to information obtained during the discovery process in a civil lawsuit. Such information is protected by an implied undertaking that prevents it from being used or disclosed for any other purpose without the prior permission of the court. British Columbia’s highest court provided guidance in the case of Association of Professional Engineers and Geoscientists of the Province of British Columbia v. Engineer X, 2023 BCCA 211 (CanLII).

That case related to the collapse of a fire escape that led to a serious injury. There was a civil lawsuit against several entities, including a professional engineer who had examined the structure before its collapse. The injured person retained an expert, also a professional engineer, who had been given extensive documents obtained during the discovery process. Once the civil case settled, the expert made a complaint against the professional engineer who examined the structure (and others). The complaint included the documents obtained during discovery. The regulator sought a court order permitting it to use the discovery documents.

The Court upheld the lower court’s refusal to grant permission. The Court commended the regulator for seeking permission and not just attempting to use the protected information. The Court noted that the civil discovery process compelled disclosure of otherwise private information. To ensure a fair litigation process and to encourage candour by the parties, it was important to not allow the discovered information to be used for other or collateral purposes. Courts would only permit the use of the protected information where the public interest in doing so outweighed the harm the disclosure would cause to the privacy interests of the parties and the integrity of the justice system.

The Court indicated that there certainly were instances where the protection of the public by regulators would warrant permitting them to use discovery information. However, there needed to be a case-by-case analysis of the competing interests. In this case, no complaint would have been made but for the discovery obligations in the civil action. The Court concluded that, in all of the circumstances, the complaint itself did not raise concerns of ongoing risk of harm. In doing so, the Court noted the limited involvement of the professional engineers, the length of time between their involvement and when the collapse occurred, and the lack of other complaints. The statutory role of the regulator to protect the public interest did not, by itself, mean that permission should be granted in every case.

The Court also did not accept the regulator’s submission that its statutory role required it to use the information to protect the public despite the fact that the regulator received it through a breach of the law by others.

The Court did not comment on the possibility of the regulator using the complaint itself to form reasonable and probable grounds to investigate the matter on its own.

The Court suggested that the regulator could use its remedial processes, such as education of the profession, to address any ongoing concerns.

While providing some guidance, the issue of how regulators should approach information in its possession that was illegally obtained is far from resolved.

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