Settlement privilege does not protect factual information communicated in proffer stage of Competition Act investigation

Authors: Kevin Ackhurst, D. Michael Brown, Andrew McCoomb Publication | April 2015

The Ontario Superior Court of Justice held in R. v Nestlé Canada Inc. that communications between corporations and the Competition Bureau (Bureau) during the proffer stage of the Immunity Program or the Leniency Program should not be protected by settlement privilege.

This case has clear implications for any parties considering co-operating with the Competition Bureau to obtain immunity or leniency for possible conduct in breach of the Competition Act.

Background of the case

The Nestlé case concerned criminal charges of price-fixing contrary to the Competition Act following a Competition Bureau investigation. The criminal case was brought against Nestlé Canada Inc. based in part on information provided to the Bureau by Cadbury Canada Inc. and Hershey Canada Inc. through the Bureau’s Immunity and Leniency Programs.1

Issues arose in the case concerning whether information provided to the Bureau during the proffer stage of the Immunity and Leniency Programs must be disclosed to the accused in criminal proceedings. During that stage, parties seeking immunity or leniency must disclose to the Bureau the results of internal investigations into possible Competition Act violations. Cadbury and Hershey had each provided this information to the Bureau in the hopes of obtaining immunity (in the case of Cadbury, which was first to approach the Bureau) or leniency (in the case of Hershey, which sought leniency as the first party to co-operate after Cadbury).

In or around June 2014, after having disclosed certain materials provided by Cadbury and Hershey during the proffer stage to Nestlé, the Crown discovered it had not obtained waivers of privilege from Cadbury or Hershey – it thereafter sought to have the accused return these materials and delete any record of them. The accused declined, claiming it was entitled to production of proffer materials. The Crown thus brought an application seeking a determination as to whether the information provided during the proffer process was privileged;2 Cadbury and Hershey intervened, arguing that it was.

Disposition – factual information not protected by settlement privilege

Justice Nordheimer of the Ontario Superior Court of Justice considered the purpose of the Immunity and Leniency Programs, which encourage individuals to “come clean” on anticompetitive conduct they have participated in. He noted that the fundamental purpose underlying settlement privilege is to protect the negotiating parties from prejudice or risk. Prior case law held that settlement privilege could attach to communications between parties and the Crown during criminal plea negotiations, but only insofar as the information disclosed could be used against the pleading party (and not with respect to another accused).

In this case, the Crown had acknowledged that the information in question would be of interest to the accused. Further, Cadbury and Hershey were unable to articulate any specific prejudice they would suffer as a result of disclosure.

The court ruled that settlement privilege does not apply to the factual information communicated by the intervenors to the Competition Bureau, noting that, “It was front and centre to both Cadbury and Hershey that the fundamental purpose, of both the Immunity Program and the Leniency Program, was to obtain evidence that would allow the Competition Bureau to prosecute other persons involved in the anticompetitive activities.” 

As these programs’ purpose is to gather information on other offenders, Cadbury and Hershey should have known that disclosing the information provided was the necessary consequence of coming forward.3


Parties considering whether to take part in the Bureau’s Immunity or Leniency Programs should be aware that documents and information disclosed during the proffering process will likely be subject to disclosure to parties that are prosecuted for related conduct in breach of the Competition Act.

While this ruling has caused some to suggest it could have a chilling effect on parties’ willingness to come forward and participate in these programs, the benefits of obtaining immunity or leniency in many cases will outweigh any risks associated with disclosing communications. The commissioner of competition has stated publicly he does not expect these reasons to disincline parties to come forward, in part because the Immunity and Leniency Programs also indicate that disclosure of the information provided is likely to occur.4

It also remains to be seen whether a similar ruling on the privilege attaching to proffer materials would be made in the context of a civil claim in which the accused’s Charter rights are not in issue. In Nestlé, the related class action was settled by the time the Privilege Application was decided, so the intervenors were not at risk of making disclosures that might compromise their interests in that proceeding.

However, where a class proceeding is ongoing and a plaintiff or other party seeks production of the proffer materials of a defendant, the defendant claiming settlement privilege may have a stronger argument, particularly since the materials are likely to be used against them.


1 These programs allow and encourage parties that become aware of conduct in breach of the Competition Act to come forward and disclose information to the Competition Bureau in exchange for immunity from or leniency in prosecution. Privilege Decision at para 6. See also online guides to the Immunity and Leniency Programs; Immunity Program:; and Leniency Program:

2 The motion concerned only the information disclosed during the proffer process. The court noted that any information provided subsequent to the entering to the Immunity or Plea Agreements must be disclosed to the accused in line with the Crown’s duty to disclose (see Privilege Decision at para 29).

3 Privilege Decision at paras 65-66. Justice Nordheimer was careful to restrict these reasons to factual information disclosed, and not necessarily all communications. His Honour recognized that, for example, legal opinions from counsel provided to the Competition Bureau during the proffering process do not need to be disclosed. See Privilege Decision at para 83.

4 Remarks of John Pecman, February 17, 2015, online: