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Canada's New Tort of Privacy and Its Impact on Your Fraud Investigation

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Canada's New Tort of Privacy and Its Impact on Your Fraud Investigation CANADA’S NEW TORT OF PRIVACY AND ITS IMPACT ON YOUR FRAUD INVESTIGATION In a landmark decision earlier this year, the Ontario Court of Appeal recognized a new tort for breach of a right to privacy, and in the process has opened up a Pandora’s Box of potential liability for fraud examiners. Learn how to navigate the waters of this new Canadian tort and still achieve your investigative goals. DAVID B. DEBENHAM, CFE, CMA Partner McMillan LLP Ottawa, Ontario Canada David Debenham has been a practicing, commercial litigation trial lawyer for the past 23 years. He is a partner in the McMillan law firm’s Ottawa office. David’s fraud practice eventually inspired him to become a Certified Fraud Examiner, and acquire his Diploma in Investigative and Forensic Accounting from the Rotman Business School’s Graduate Program at the University of Toronto (he was Valedictorian of his class). He has published a text directed at fraud investigators and expert witnesses called The Law of Fraud and the Forensic Investigator, along with the leading articles in the United States and Canada on the subject of detecting and reporting fraud in a law firm. He has spoken at ACFE chapter meetings in Ottawa, Toronto, and Saskatoon, as well as the ACFE national convention. “Association of Certified Fraud Examiners,” “Certified Fraud Examiner,” “CFE,” “ACFE,” and the ACFE Logo are trademarks owned by the Association of Certified Fraud Examiners, Inc. The contents of this paper may not be transmitted, re-published, modified, reproduced, distributed, copied, or sold without the prior consent of the author. ©2012 CANADA’S NEW TORT OF PRIVACY AND ITS IMPACT ON YOUR FRAUD INVESTIGATION NOTES A recent headline declared: “Ontario Employers Take Note: New Privacy Tort Created”1 One wonders why that headline did not similarly warn investigators of this new privacy tort, since an investigator will not be able to use the fact that they were working for another as a defence to a claim for invasion of privacy. The purpose of this article is to instruct investigators as to the parameters of this form of liability so that internal protocols can be adjusted accordingly. Understanding the Influence of U.S. Law The U.S. Bill of Rights never refers to the concept of privacy, and yet privacy is said to be a constitutionally enshrined right south of our border. U.S. courts have interpreted the various enumerated rights in the Bill of Rights as specific examples of an overall concept of privacy, such that one speaks of the U.S. Constitution projecting a penumbra of privacy rights. Using that approach, U.S. tort law conjoined various established English torts under the rubric of a tort of privacy. The tort of privacy can really be seen as a “residual notion”2 that protects a concept of privacy, which does not fit neatly into one of the established torts but is seen as offensive to one’s right to be “let alone.” The residual right of privacy is not one tort, but four. The tort of privacy comprises four different kinds of invasion of four different interests of the plaintiff, which are described as follows: Intrusion upon the plaintiff’s seclusion or solitude, or into his private affairs Public disclosure of embarrassing private facts about the plaintiff 1www.mondaq.com/canada/x/162608/Privacy/Ontario+Employers+Tak e+Note+New+Privacy+Tort+Created 2 See Kalven Jr., "Privacy and Tort Law - Were Warren and Brandeis Wrong?", (1966), 31 Law & Con. Prob. 326 at p. 327. 2012 ACFE Canadian Fraud Conference ©2012 1 CANADA’S NEW TORT OF PRIVACY AND ITS IMPACT ON YOUR FRAUD INVESTIGATION NOTES Publicity that places the plaintiff in a false light in the public eye Appropriation, for the defendant’s advantage, of the plaintiff’s name or likeness As an example, an investigator hired by an employer finds the employee’s password, and goes onto his Facebook page, and appropriates a photo of the employee cavorting at a stripper bar at Aspen. The photo is then used to show that the employee is not really disabled. On cross-examination the employee explains that the photo was taken before his accident at work. The investigator’s taking of the photo is intrusion of seclusion, and the use of the photo is appropriation under the fourth branch of this tort. Also, the use of the photo to suggest that the employee was not really injured is the third branch of the tort, and the publication of the photo at a stripper bar may constitute a cause of action under the second branch of the tort. The Canadian Reaction In the Commonwealth, the courts were content to attempt to stretch the various, established torts rather than follow the U.S. experiment. Thus a leading Canadian scholar would write: “Despite some encouraging suggestions from a few courts, it would be fair to say that the Canadian tort law does not yet recognize a tort action for invasion of privacy per se. Rather, “privacy” rights have been protected under the umbrella of other traditional tort actions, and by legislative interventions. Several established torts protect privacy interests. The dignity of one’s person is protected by several torts, such as assault, battery, the intentional 2012 ACFE Canadian Fraud Conference ©2012 2 CANADA’S NEW TORT OF PRIVACY AND ITS IMPACT ON YOUR FRAUD INVESTIGATION NOTES infliction of emotional distress, and false imprisonment. One’s right to be left alone to use and enjoy property is protected by trespass, and nuisance. One’s reputation is protected by defamation. The right to the commercial exploitation of one’s “personality” and “goodwill” also has received protection. In Krouse v. Chrysler Can. Ltd., the tort of “appropriation of one’s personality”, fashioned from an action on the case, was recognized by the court. Another area of growing importance which protects privacy interests is the law relating to liability for breach of confidence. In view of these alternatives, is a separate tort of “invasion of privacy” necessary? It is arguable that it is not. The concept of privacy is too ambiguous and broad to be able to be covered adequately in one cause of action. It is desirable to have the different aspects of privacy protection dealt with in separate torts which more clearly can focus on the interests at hand. Gaps in the law which cannot be filled by extending traditional principles can be dealt with as they arise, either through the expansion of the common law or by legislative intervention.”3 The result is that in Canada anyone who wanted to sue an investigator, and thereby the investigator’s employer, had to rely on the usual tort claims. The usual claims were: Trespass to the person includes assault, which is any act of such a nature as to excite an apprehension of 3 L. Klar, Tort Law, at p. 56 2012 ACFE Canadian Fraud Conference ©2012 3 CANADA’S NEW TORT OF PRIVACY AND ITS IMPACT ON YOUR FRAUD INVESTIGATION NOTES battery. Battery is any intentional and unpermitted contact with the plaintiff’s person or anything attached to him and practically identified with him. False imprisonment is the unlawful obstruction or deprivation of freedom from restraint of movement. Thus an aggressive use of the REID interrogation technique, or the interrogator standing between the suspect and the door, could lead to a claim. The tort of intimidation might also be added to this list. Trespass to chattels, also known as trespass to goods or trespass to personal property, is defined as an intentional interference with the possession of personal property. Trespass to chattel does not require a showing of damages. Simply the intermeddling with or use of the personal property of another gives cause of action for trespass. Thus the inspection of a computer or a briefcase, or any other personal property that is lawfully in the possession of the suspect may give rise to a claim. Trespass to land is today the tort most commonly associated with the term trespass; it takes the form of wrongful interference with one’s possessory rights in real property. Generally, it is not necessary to prove harm to a possessor’s legally protected interest; liability for unintentional trespass varies by jurisdiction. At common law, every unauthorized entry upon the soil of another was a trespasser. Thus entering into the office space of a suspect who was an independent contractor may give rise to a claim. Conversion is a voluntary act by one person inconsistent with the ownership rights of another. Thus taking “evidence” that belongs to the suspect may give rise to a claim, along with a claim for detinue, which is the claim for the wrongful refusal to give back property to the person lawfully entitled to possession of it. 2012 ACFE Canadian Fraud Conference ©2012 4 CANADA’S NEW TORT OF PRIVACY AND ITS IMPACT ON YOUR FRAUD INVESTIGATION NOTES The tort of unlawful interference with economic relations requires that the plaintiff prove that: (a) the defendant intended to injure the plaintiff; (b) the defendant interfered with the plaintiff’s economic interest by illegal or unlawful means; and (c) as a result thereof, the plaintiff suffered economic loss. The tort of inducing breach of contract requires (a) a valid and enforceable contract between the plaintiff and a third party; (b) the defendant knew of that contract; (c) the defendant intended to bring about the breach of that contract; (d) the defendant’s conduct caused a breach of that contract; (e) the plaintiff suffered damage as a result of the breach of that contract; and (f) the defendant did not have a lawful justification for its conduct, then the defendant has committed the tort of inducing breach of contract.
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