Using Legal Advice as a Shield from Liability: Fullowka v Pinkerton’s of Canada Ltd

In 1992, a striking gold miner in the Northwest Territories (NWT) planted a bomb which killed nine replacement workers. The ensuing judicial saga, in which the widows of the murdered men sought compensation in tort from the security company guarding the mine, the union, and the territorial government branch responsible for mine safety, ultimately came to naught with the Supreme Court of Canada’s (“SCC”) recent decision in Fullowka v Pinkerton’s of Canada Ltd, 2010 SCC 5 [Fullowka], commented on at TheCourt.ca by Daniel Del Gobbo here.

The SCC Decision

The SCC’s lengthy decision offers a comprehensive analysis of the stages of a claim for negligence. One notable aspect of the judgment is the Court’s consideration of government liability in tort for failure to enforce statutorily imposed standards of safety, and in particular the surprising extent to which receiving legal advice interpreting responsibility narrowly can insulate the government from liability.

Fullowka suggests that taking legal advice will be a powerful shield against claims of negligence – even when the advice is suspect.  The plaintiffs asserted that the NWT government’s decision not to close the mine in the face of ongoing threats and acts of violent sabotage amounted to a failure to meet the standard of care it owed under the Mining Safety Act. The Court rejected this argument, finding that the government met its standard of care by virtue of its good faith reliance on legal advice stating the government did not have the authority to close the mine in the circumstances.

The gist of this advice was that an order to close the mine would be outside the jurisdiction of the government’s Mine Safety Division because, in the context of strike-related violence, such an order would more properly be within the purview of either the RCMP (as a criminal matter) or the Labour Board (as a matter of labour relations.) Although the legal opinion received by the government was wrong, the mere fact that it was relied upon in good faith was enough to relieve the government of any responsibility for the deaths.

Writing for a unanimous Court, Justice Cromwell agreed in no uncertain terms with the trial judge that the legal opinion was wrong:

I am not at all persuaded that it was beyond the statutory jurisdiction of the inspectors to act in the extraordinary situation that presented itself here. They had a clear and well-substantiated belief that the mine was unsafe. As they put it in a report more than three months before the fatal blast, “the lack of security at the mine is endangering the occupational health and safety of the employees”.

In light of knowledge that the mine was unsafe, a legal opinion that the branch of government responsible for mine safety did not have the power to act is self-evidently problematic. The SCC’s decision, which eviscerates the legal opinion while still allowing the government to use it as a defence, suggests that courts should not look too deeply into the quality of legal advice received but should take it at face value.  While governments and other actors should be able to rely on legal advice without worrying about its subsequent dissection, the decision in Fullowka suggests that even egregiously faulty legal opinions will escape judicial probing.

The Court attempts to address the potential problems resulting from relying uncritically on legal opinions as evidence of having met a standard of care by imposing a requirement that such advice be taken in good faith. In Fullowka, the plaintiffs did not suggest the advice was not sought or relied on in good faith; accordingly, the SCC was not called upon to enter into an analysis of when the combination of a faulty legal opinion and something less than good faith would disentitle a party to reliance on the legal opinion.

Analysis

Although the SCC did not articulate the problems associated with using legal advice as a shield, they are not hard to imagine in this case. The trial judge’s decision makes it clear that the government did not want to close the mine for a range of reasons unrelated to safety: the fear of losing credibility if the decision were to be challenged, the desire to have the labour dispute resolved through federal anti-replacement legislation, and the threat of legal action by the owners of the mine all weighed heavily on the government’s decision-making process. The legal opinion advising against the closure of the mine was thus presumably received with open arms, and served as a convenient justification for inaction and deferral of responsibility.

Further compounding the problematic nature of the legal advice is the fact that it was received from within a small territorial government from counsel presumably well apprised of the decision the Mine Safety Division wanted to take, thus detracting from counsel’s independent judgement. The broader factual scenario suggests something less than good faith, far short of competence, and nowhere close to what should be expected of responsible regulators.

The troubling result of declining to evaluate the quality of legal advice and the circumstances in which it was received is a lack of accountability. On the basis of extensive findings of fact in a 1300 paragraph judgment, the trial judge concluded that “the entire MSD was so incompetently operated that negligence was rampant throughout its tenure during the strike.”

Nonetheless, the government ultimately avoided any scrutiny of its inaction by relying on questionable legal advice on a jurisdictional question it should have been able to answer correctly; after all, as the trial judge observed, “if it is not the responsibility of the chief mine inspector, and ultimately the Minister responsible for mine safety, to understand their proper authority and jurisdiction, then who is accountable?” Unfortunately, the answer seems to be nobody. As Mr. Del Gobbo suggested in his analysis, it is unlikely the plaintiffs will be able to pursue a claim against the government’s counsel.

Conclusion

It is clear that the SCC in Fullowka was concerned with ensuring that public officials who rely in good faith on professional legal advice will not be subject to claims of negligence for relying on that advice. Although strongly affirming the shielding effects of legal advice on questions of statutory authority, the Court includes the caveat that such advice must be received from counsel “whose competence and good faith in giving the advice they have no reason to doubt”. The Court also makes it clear that it will “rarely” – but not never – be negligent to decline to act based on such advice. In light of the powerful facts of Fullowka, it appears that future findings of negligence where legal advice has been received will be rare indeed.