City of Victoria: Litigation Privilege Affirmed for Adjuster Reports

• The BC Supreme Court upheld the City of Victoria's claim of litigation privilege over adjuster reports in a personal injury case.
• The 43-year-old plaintiff alleged tripping on a deformed sidewalk plate, leading to broken ribs, shoulder, and hand injuries.
• The City's insurer retained an independent adjuster and claims examiner after receiving formal notice of the claim.
• The court found a reasonable prospect of litigation and a dominant purpose to assess liability for defense when the reports were created.
• Cross-examination of the adjuster and examiner did not undermine their evidence regarding the contemplation of litigation.

The ruling hinged on two primary considerations for BC litigation privilege dominant purpose and contemplation of litigation BC.

The British Columbia Supreme Court recently affirmed the City of Victoria's assertion of litigation privilege over adjuster reports in a personal injury claim, dismissing a plaintiff's application for their production. The case, Harris v The Corporation of the City of Victoria, 2026 BCSC 1730, stemmed from an incident on April 11, 2024, where a 43-year-old plaintiff, who owned and operated a small gardening and landscaping business, allegedly tripped on a deformed metal plate recessed into a Victoria sidewalk.

Following the incident, the plaintiff's counsel provided the City with the required notice for a personal injury action on June 3, 2024, as mandated by s. 736 of BC's Local Government Act, 2015. The City promptly reported the claim to its liability insurer on June 4, 2024. The insurer then engaged a claims examiner, who in turn retained an independent adjuster to investigate the matter. Initially, a letter from the independent adjuster dated July 4, 2024, suggested that Telus Communications Inc. might be responsible, not the City.

However, the plaintiff proceeded to serve a notice of civil claim on the City on July 12, 2024, alleging significant injuries including broken ribs, a shoulder injury, and a ligament injury to her hand. During the discovery phase, the plaintiff sought the production of two specific adjuster reports, dated June 25, 2024, and July 24, 2024, which the City opposed on the grounds of litigation privilege.

To defend against the production request for the adjuster reports, the City of Victoria asserted litigation privilege. Both the independent adjuster and the claims examiner submitted affidavits, attesting that the creation of these documents was undertaken in contemplation of litigation. This claim of privilege was challenged by the plaintiff, whose counsel successfully applied for leave to cross-examine both the independent adjuster and the claims examiner.

The cross-examination of these key witnesses took place over two days, June 23 and 24. The court's task was to determine whether the City had met its onus to prove that the adjuster reports were indeed protected by litigation privilege, a crucial aspect of municipal liability discovery privilege in British Columbia.

In its decision, the British Columbia Supreme Court dismissed the plaintiff's application for production, finding that the City had successfully established litigation privilege. The court ordered costs to follow the ordinary course. The ruling hinged on two primary considerations for `BC litigation privilege dominant purpose` and `contemplation of litigation BC`.

Firstly, the court determined that there was a reasonable prospect of litigation at the time the adjuster reports were created. This conclusion was supported by the fact that the City had received formal notice of the plaintiff's claim and was aware she had retained legal counsel before forwarding the matter to its liability insurer. Crucially, both the independent adjuster and the claims examiner confirmed during their cross-examination that litigation was indeed in contemplation when they undertook their work. Secondly, given the reasonable foreseeability of litigation, the court concluded that the dominant purpose behind the creation of the adjuster reports was to assess liability and prepare a defense against the anticipated claim. The court noted that both the independent adjuster and the claims examiner were aware of the plaintiff's allegations of significant injuries, reinforcing the defensive nature of their investigation.

The court also addressed concerns regarding the use of boilerplate language in affidavits, emphasizing that it does not endorse such practices if they fail to convey the deponents' true evidence. However, in this instance, the court found no material discrepancies between the deponents' factual conclusions presented in their affidavits and their answers during cross-examination. The court further acknowledged the extensive experience of both the independent adjuster and the claims examiner in their respective fields.

This ruling provides important guidance for parties seeking to assert `litigation privilege` over `adjuster reports production personal injury` in British Columbia, particularly for municipal clients like the City of Victoria. The decision underscores the critical importance of clearly demonstrating that documents were created with the `contemplation of litigation` and that their `dominant purpose` was to prepare for that litigation.

The outcome in Harris v The Corporation of the City of Victoria, 2026 BCSC 1730, illustrates that robust evidence, even when subjected to cross-examination, can successfully protect internal investigative documents from production. This provides practical assurance for defendants in personal injury claims that their efforts to assess liability and prepare a defense can remain privileged, provided the foundational elements for privilege are clearly established and maintained throughout the process.

This ruling provides practical guidance for lawyers defending personal injury claims in British Columbia, particularly for municipal or insured clients, on successfully asserting litigation privilege over adjuster reports. It underscores the importance of clearly demonstrating 'contemplation of litigation' and 'dominant purpose' for report creation, and shows that robust evidence can withstand cross-examination, helping counsel advise clients on protecting internal investigation documents from production.

Source: Original reporting via Canadian Lawyer