Reasons for Decision

Court File No.: CV-23-00703842
Motion Heard: 2025-01-17
Superior Court of Justice – Ontario
Re: Carrie Robinson, Plaintiff
And: Ryder Truck Rental Canada Ltd., Defendant
Before: Associate Justice Wendy Jolley
Counsel:

• Ashu Ismail, counsel for the plaintiff
• Jillian Van Allen, counsel for the defendant
  Heard: 17 January 2025

Overview

[1] On 6 October 2019, the plaintiff was involved in a motor vehicle accident involving a truck owned by the defendant. She commenced three actions as a result of that accident: (a) a claim for accident benefits (“AB”) from the defendant’s insurer, AIG Insurance (the “AB claim”); (b) an action against Ryder Truck for civil damages arising from the accident (the “tort action”); and (c) this privacy action.

[2] Each party seeks to remove counsel for the other party in this privacy action due to an alleged conflict of interest.

The Plaintiff’s Motion to Remove Ms. Schultz as Counsel for the Defendant

[3] The AB claim concerns the handling of the plaintiff’s claim for accident benefits. Ms. Schultz is counsel for AIG in the AB claim. This privacy action concerns alleged wrongdoing in the context of the AB claim, namely an allegation that AIG improperly shared the information it received from the plaintiff with its insured, Ryder Truck, the defendant in this privacy action. Ms. Schultz is counsel for Ryder Truck in this privacy action. She is not counsel in the tort action.

[4] The plaintiff argues that Ms. Schultz is in a conflict as she owes a duty of good faith to the plaintiff in the AB claim and acts against her on behalf of Ryder Truck in this privacy action.

[5] The defendant filed 6,250 pages of material in its responding record for this one hour motion. I have considered only those portions that counsel took me to in the course of their argument.

Preliminary Issue

[6] The defendant takes the position that this privacy claim falls within the exclusive jurisdiction of the Licence Appeal Tribunal (“LAT”) as it is, at its core, a claim about the handling of the plaintiff’s claim for accident benefits. It argues that, because all aspects of this claim, including this motion, are outside the jurisdiction of this court, this motion should be deferred until the court hears the defendant’s motion to stay this action on 19 August 2025.

[7] This is a matter that either should have been raised before Akbarali, J. when she set the timetable for the various steps in this privacy action, or, alternatively, was raised before Her Honour and rejected. Her Honour ordered that “the conflicts motions shall be heard first, and shall be heard together. The first available date on the associate judges’ calendly is January 17, 2025, for two hours. The parties shall book that date…. The defendant’s jurisdictional motion [on whether the LAT has exclusive jurisdiction over this privacy action], including the plaintiff’s defence to the motion that will engage the constitutional question shall be heard for one day on August 19, 2025.”

[8] Nothing in this decision precludes the defendant from arguing its jurisdictional motion as scheduled. It may well succeed and this privacy action will be stayed. The only issue before me is whether Ms. Schultz can continue to act for the defendant and argue the jurisdictional motion (and the action, if it is not stayed) or whether the defendant will be required to appoint new counsel.

[9] A substantial part of the defendant’s factum in response to this conflicts motion advanced its position that the court does not have jurisdiction to hear this privacy action, including this motion, despite the order of Akbarali, J. It is difficult to see who else would hear this motion. One would not expect the LAT would have jurisdiction to make an order disqualifying counsel in a civil action.

[10] For the reasons above, I dismiss the defendant’s request that the motion be adjourned to the judge hearing the jurisdiction motion.

Motion to Remove Ms. Schultz as Counsel for the Defendant

[11] AIG is the insurer respondent in the AB claim. However, Ryder Truck is responsible for the payment of all claims up to $1,000,000, including AB payments (the “large deductible program”). Under the large deductible program, AIG provides all adjusting instructions, according to an affidavit filed by its independent adjuster. As was found by the LAT, the large deductible program’s independent adjuster is required to update Ryder Truck and AIG regarding “the status of the accident benefits claim, amounts paid to date, information for reserving purposes and information to assist with the repayment of amounts from Ryder Truck to AIG.” The LAT also found that the representative of Ryder Truck who receives the reports from the independent adjuster is only involved with administering the accident benefits portion of the large deductible programme.

[12] In this privacy action, the plaintiff alleges that Ryder Truck breached her privacy by receiving information or documents from AIG that she provided to AIG in support of her AB claim. While much was made of the legality of the underlying large deductible program, that issue, including whether Ryder Truck was entitled to receive and did receive the plaintiff’s personal information from its insurer, AIG, will not be determined on this motion, but in the course of this action.

[13] The plaintiff argues that Ms. Schultz, as counsel for AIG, has had access to her records in the AB claim, is in a fiduciary relationship to her in that AB claim and is precluded from acting against her in this privacy action. The plaintiff also argues that Ms. Schultz is precluded from using the documents she received from the plaintiff in the AB claim against the plaintiff’s interest in this privacy action.

[14] The law is clear that, in a case, where an insurer with dual responsibilities – one to the AB claimant and one to a tortfeasor – it has an obligation to set up a firewall that prevents any dialogue or any transfer of the plaintiff/claimant’s confidential accident benefits file to the tort adjuster without the consent of the insured/plaintiff.

[15] The defendant argues that this allegation of a conflict has already been determined by the LAT which dismissed the plaintiff’s motion to remove Mr. Frost, the predecessor lawyer of Ms. Schultz at Frost Schultz LLP, from the AB action as a result of his alleged ongoing communications with the tort insurer and adjuster. The LAT found in its decision of 19 November 2021 that:

• (a) there was an ethical wall in place between the tort action and the AB claim;
• (b) there was no evidence that the ethical wall had been breached or that AIG’s counsel received any information about the tort claim; and
• (c) no information or documents from the tort action have been shared by the tort defendant into the AB file.

[16] If there has been no sharing of information between AIG as AB provider and Ryder Truck in the tort action, that may ultimately be a complete defence to this privacy action, which alleges that Ryder Truck has received information from AIG. But that issue is not before me.

[17] Further, the confirmation that there is an ethical wall and there has been no sharing of documents is somewhat moot on this motion because Ms. Schultz is the lawyer on both sides of the wall. She is counsel for AIG in the AB claim and counsel for AIG’s insured in this privacy action. This is quite different from the case that the LAT heard which involved alleged sharing of information between AIG in the AB claim and Ryder Truck, represented by a different lawyer, John Jones, in the tort action.

[18] AIG, in its capacity as an accident benefits insurer, owes the plaintiff a duty of good faith arising out of its fiduciary obligations (Dervisholli and Cervenak and State Farm, 2015 ONSC 2286). While the defendant acknowledges that Ms. Schultz could not act in the AB claim and the tort action, it argues that she is not precluded from acting in the AB claim and this privacy action.

[19] The plaintiff provided information to AIG in the AB claim in confidence and with the expectation that her right of privacy would be respected. As the court noted in Woods v. Jones, 2017 ONSC 3946, a decision removing counsel for the AB adjuster who was also lawyer for the tortfeasor, “for the sake of the integrity of the court, the legal profession and the accident benefits regime, someone who is required to disclose confidential information in a fiduciary relationship should not be cross-examined in court by the party to whom the confidential information was disclosed”. As the court noted in The Personal Insurance Company v. Jia, 2020 ONSC 6361 at paragraph 6, “It is established law that insurers may not use the same counsel in statutory benefits cases and in tort cases brought against them by the same insured. This is because the duties of an insurer (and therefore of its counsel) are different in these contexts, and as an accident benefits insurer, the insurer is entitled to receive, and is required to keep confidential, a great deal of sensitive personal information from claimants.”

[20] The principle that an insurer may not use the same counsel in AB cases and in tort cases brought against them by the same insured or claimant has been extended to situations where an insurer retained the same counsel to respond to an AB claim and also to act in a priority dispute between insurers over which insurer was responsible for the claimants’ AB claims. While holding that the case is not as clear as in matters involving an AB claim and a tort claim arising from the same loss, the court in The Personal Insurance Company v. Jia, supra, held the situation to be sufficiently analogous that the same principle should apply. In the end, the court upheld the decision of the Safety, Licensing Appeals and Standards Tribunals Ontario that there was a conflict in counsel for the insurer acting in both the priority disputes and the AB dispute on the facts of the case.

[21] There can be no question of how inter-related the AB claim and this privacy action are—the defendant’s pending jurisdictional motion is based on its position that “the claims and allegations in [this] statement of claim were derived from the accident benefits claim” and therefore subject to the exclusive jurisdiction of the LAT.” It has pleaded in paragraph 8 of its defence to this privacy action that “the allegations contained within the statement of claim, which are expressly denied, nevertheless arise out of the handling of, and are derivative of the plaintiff’s claim for accident benefits.”

[22] By retaining the same counsel in this privacy claim as AIG retained in the AB claim, Ryder Truck appears to have given itself access, through Ms. Schultz, to the information that the plaintiff was compelled to provide in her AB claim. Ms. Schultz is placed in an untenable position as she may know of information wearing her AB claims lawyer hat that is beneficial to Ryder Truck in defending this privacy action but is not entitled to use that information or provide it to her client. She must either violate her duty of confidentiality to the plaintiff or her duty of candour and commitment to the defendant. See R. v. Neal (2002) 168 C.C.C. (S.C.C.) and CN Rail v. McKercher LLP, 2013 SCC 39.

[23] The defendant argues that the documents filed by the plaintiff in her LAT application are publicly available. While that is true, it is not clear that that is how Ms. Schultz came to have those documents. She presumably had access to the documents in her role as counsel for AIG assessing the plaintiff’s claim for AB benefits. She certainly would have at least known of their existence because she was counsel for AIG. In that capacity, as was noted in Dervisholli, supra at paragraph 41, “apart from its fiduciary obligation, the statutory accident benefit insurer also has an obligation to ensure that the information supplied by its insured is kept private.” If Ms. Schultz received the plaintiff’s documents through public access, she may be required to testify to that effect, placing her in a further conflict.

[24] The defendant has not explained how Ms. Schultz would be able to use those documents, regardless of how she received them, without breaching her fiduciary duty to the plaintiff.

[25] Even if Ms. Schultz had legitimately and only obtained the plaintiff’s documents from the publicly available source, the question of her role is answered by MacDonald Estate v. Martin, where the court stated:

“The second question is whether the confidential information will be misused. A lawyer who has relevant confidential information cannot act against his client or former client. In such a case the disqualification is automatic. No assurances or undertakings not to use the information will avail. The lawyer cannot compartmentalize his or her mind so as to screen out what has been gleaned from the client and what was acquired elsewhere. Furthermore, there would be a danger that the lawyer would avoid use of information acquired legitimately because it might be perceived to have come from the client. This would prevent the lawyer from adequately representing the new client. Moreover, the former client would feel at a disadvantage. Questions put in cross-examination about personal matters, for example, would create the uneasy feeling that they had their genesis in the previous relationship.”

[26] The plaintiff’s motion for an order removing Ms. Schultz as counsel for the defendant in this privacy action is granted.

[27] The parties agreed on this motion that the successful party would receive $5,000 in costs from the unsuccessful party. The defendant shall pay the plaintiff that amount within 30 days.

The Defendant’s Motion to Remove the Campisi Firm as Counsel for the Plaintiff

[28] The defendant seeks an order removing Joseph Campisi and the law firm of Campisi LLP Personal Injury Lawyers (“the Campisi lawyers”) as lawyers of record for the plaintiff in this privacy action.

[29] The plaintiff alleges that there is a contract between AIG and Ryder Truck, its insured, that obliges AIG to disclose to Ryder Truck the plaintiff’s personal information that it obtained in the AB claim. This privacy action does not put the Campisi lawyers’ knowledge in issue. It speaks only of the plaintiff’s knowledge. The plaintiff alleges that she was required to provide AIG with her personal and medical information in order to have her AB claim processed and that AIG has given Ryder Truck that personal information in violation of her privacy rights.

[30] The claim further alleges that the agreement between Ryder and AIG circumvents the prohibition against the same firm managing both the AB claim and the tort action by allowing Ryder Truck to access the AB information via its insurer, AIG.

[31] On this motion, the defendant alleges that the Campisi lawyers have conducted all the investigations into the alleged privacy breaches and its lawyers are witnesses with relevant information. For instance, Mr. Campisi swore an affidavit on 27 August 2021 in support of an unsuccessful motion to have Jason Frost, AIG’s counsel in the AB claim, removed as counsel due to a “disqualifying conflict of interest”. In that affidavit, Mr. Campisi stated that he reviewed the claims notes in the AB file and concluded that the AB adjuster had been regularly providing information to and seeking instructions from Ryder Truck and Tammie Hinely, a claims analyst of Ryder Truck in the tort claim. Mr. Campisi also swore an affidavit on 21 July 2023 wherein he stated that the plaintiff began to believe that Ryder Truck was receiving information about her AB claim, and perhaps even adjusting her claim.

[32] According to the defendant, the plaintiff herself has no information at all about these allegations. The defendant has advised that it will call four lawyers and a paralegal from the Campisi firm as witnesses. It argues that the individuals have each provided evidence in the plaintiff’s AB claim that will be necessary for the defendant in this action. The defendant proposes to ask the Campisi lawyers about the firm’s investigations, observations and conclusions about the privacy breach allegation and their legal strategy on the file (for instance, why they altered the plaintiff’s Application for Benefits (OCF-1) form to remove certain groups to whom AIG could disclose information, and why they believed it was appropriate to do so). Because the lawyers will be witnesses at trial, the defendant argues that they are in a position of conflict and cannot act for the plaintiff in this action.

[33] I find applicable the case of Bose v. Bangyia Parishad Toronto, 2018 ONSC 7639 where the applicant sought to remove Mr. Goswami, the respondent’s lawyer on the basis that he was involved in the events between the parties and would be called as a witness. Perell, J. disagreed, stating that Mr. Goswami was hired as a lawyer for the respondent and he gave his client legal advice. He wrote letters, which spoke for themselves, on the instructions of his client. The court concluded: “The only evidence that Mr. Goswami could give is about his legal advice to his client, but that advice is privileged, and it is not Mr. Goswami's privilege to waive. If he was subpoenaed to give evidence, the subpoena would be quashed.” (para 126)

[34] As noted in Ottawa-Carleton (Regional Municipality) v. Consumers’ Gas Co. (Div. Ct.), “Counsel must be free to make the fullest investigation and research without risking disclosure of his opinions, strategies and conclusions to opposing counsel.” The defendant has not explained what the Campisi lawyers could testify about that would not be covered by litigation privilege or solicitor client privilege. The Campisi lawyers would be unable to answer questions about their investigations or the strategy they are pursuing on behalf of their client to challenge the arrangement between companies like the defendant and their insurers, or the basis for their legal conclusions, without breaching either litigation privilege or solicitor client privilege.

[35] To the extent the Campisi lawyers prepared documents for their client in the AB claim, their rationale for filing what they did is privileged, and their client has not waived that privilege. The only information that could be relevant is that a particular document was sent or filed, and it is not necessary for the Campisi lawyers to testify to that fact, as the documents are part of the public record.

[36] It has not been suggested that the Campisi lawyers have any relevant, non-privileged information on which they could be examined. Mr. Campisi’s personal conclusion that AIG and the defendant were sharing information is, respectfully, irrelevant. What is relevant is whether information was exchanged between Ryder and AIG and, if so, whether the contract that allegedly permitted that sharing of information, is legal.

[37] In Graham v. Ontario (2006) 26 C.P.C. (6th) 238, the court noted: “It is not sufficient for a moving party to suggest opposing counsel is a potential witness or allege only that he or she might provide material evidence. Rather, it must be established that there is a real basis to believe counsel can likely, or probably, provide material evidence….”

[38] I am not satisfied on the evidence before me that there is a real basis to believe that the Campisi lawyers can likely, or probably, provide material – and admissible – evidence in this privacy action. The defendant’s motion to remove Campisi as counsel for the plaintiff is dismissed.

[39] The parties agreed on this motion that the successful party would receive $5,000 in costs from the unsuccessful party. The defendant shall pay the plaintiff that amount within 30 days.

Associate Justice Wendy Jolley
Date: 12 February 2025