CANADA Trends and Developments Contributed by: Elizabeth Bowker, Shadi Katirai, Christian Breukelman and Grace Murdoch, Stieber Berlach LLP
purpose for which the information was collected are playing an increasingly important role in the analysis. Jugenburg suggests that privacy litigation is expand- ing beyond traditional data breach claims to include challenges to the collection, monitoring, retention and governance of personal information. Significantly, actionable privacy harm may exist even if personal information is never publicly disclosed or exploited by third parties. In certain circumstances, the collec- tion or recording of personal information may itself constitute the wrongful act. Another takeaway from Jugenburg is that privacy obli- gations become more demanding where information is gathered in environments involving trust, vulnerability or highly personal information. Medical providers, clin- ics, hospitals, long-term care facilities, rehabilitation providers and other healthcare organisations therefore remain particularly exposed to privacy-related class action risk. Many privacy class actions over the last decade arose from cyberattacks, ransomware incidents, accidental disclosures, lost devices and other forms of unauthor- ised third-party access. However, the Court of Appeal for Ontario had significantly narrowed intrusion upon seclusion claims against organisations that merely failed to prevent third-party hacking in the Owsianik / Obodo / Winder trilogy. The Court of Appeal held that database defendants cannot generally be liable for intrusion upon seclusion simply because hackers breached their systems. Against that backdrop, Jugenburg is particularly important because the organisation itself committed the alleged privacy wrong. The defendants intention- ally collected and recorded the information. The court therefore found the conduct capable of supporting intrusion upon seclusion liability. The result is a growing expectation that organisa- tions handling sensitive personal information maintain robust consent practices, clear disclosure protocols and carefully defined limits on collection and use. From an insurer’s perspective, privacy claims may engage cyber policies, professional liability cover-
age, healthcare liability programmes, directors’ and officers’ insurance, errors and omissions policies and specialised privacy endorsements. At the commence- ment of the litigation, insureds and/or their brokers must promptly identify the appropriate insurer(s) to put on notice. Insurers should pay particular attention to overlapping coverage clauses, as privacy claims may engage several policies. Such claims may also gener- ate significant defence costs, regulatory investigations and reputational consequences independent of any ultimate finding of liability. Lastly, given the recent developments in case law discussed above, insurers may wish, at the under- writing stage, to investigate the insured’s governance and safeguards to prevent privacy breaches and re- evaluate whether those protections remain up to date at each renewal. The Rising Costs of Certification For insurers assessing exposure on a class action, the actual claim for damages is only part of the picture. The cost of defending certification – and the poten- tial exposure to plaintiffs’ legal costs if certification is contested and lost – can materially affect the value and risk of the claim. As with litigation more generally, class proceedings are becoming more complex and, as a result, more costly to litigate. This trend is particularly heightened at the certification stage. Certification is a procedural step and is not supposed to be a trial on the merits. That said, certification motions can involve significant legal work, particularly as class counsel prosecute increasingly complex and sometimes novel, claims. Several recent examples show significant cost awards at the certification stage, both in favour of plaintiffs and defendants. The recent decision in Stolove v Waypoint Centre for Mental Health Care , however, is particularly illustrative of the effort required to both prosecute and respond to a class action at the certi- fication stage. The Stolove decision concerned a proposed class action against a psychiatric institution and the Prov-
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