Teresa Scassa - Blog

Wednesday, 15 April 2015 08:42

Class Action for Personal Health Information Breach Allowed to Proceed

Written by  Teresa Scassa
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The Ontario Court of Appeal recently allowed a proposed class action proceeding for breach of privacy. This on its own is not unusual – such proceedings are increasingly common in Canada. (See earlier post on this subject here). What is particularly interesting about this decision is that the Court of Appeal ruled that Ontario’s Personal Health Information Protection Act (PHIPA) did not pose a barrier to tort proceedings. It had been argued that the provincial legislation created a “complete code” for dealing with breaches of personal information protection in the health care context in Ontario, and that tort law recourse was therefore not possible. This is an important decision for health care consumers, as class action litigation is emerging as an important means of redress and accountability for failures to adequately protect personal information. The decision should also send a wakeup call to hospitals and other health information custodians in the province.

In Hopkins v. Kay the representative plaintiff alleged that her medical records – along with those of 280 other patients at the Peterborough Regional Health Centre – had been improperly accessed by a hospital employee. The legal claim was based on the tort of intrusion upon seclusion, and the key issue was whether such recourse was precluded by the existence of PHIPA.

Writing for the unanimous Court, Justice Sharpe framed his analysis around two issues: first, whether there was a legislative intent to create a complete code when PHIPA was enacted; and second, whether the case law supported a conclusion that in the circumstances the jurisdiction of the Superior Court to consider a tort claim was ousted.

The relevance of the “complete code” issue is that if the legislature intended to create a complete code to deal with personal health information protection, then, by implication, it intended to preclude any separate tort recourse. In considering whether the intent was to create a complete code, Justice Sharpe drew on three criteria articulated by the Nova Scotia Court of Appeal in Pleau v. Canada: 1) is the dispute resolution process established by the legislation consistent with exclusive jurisdiction?; 2) what is the essential character of the dispute, and is it regulated by the legislation such that the intervention of the court would be inconsistent with the scheme; and 3) is the scheme capable of affording “effective redress”.

Justice Sharpe noted that PHIPA laid out an elaborate scheme governing the protection of personal health information. However, although he found that the statute “does contain a very exhaustive set of rules and standards for custodians of personal health information, details regarding the procedure or mechanism for the resolution of disputes are sparse.” (at para 37) He observed that oral hearings were not at all typical – in most cases, complaints were dealt with through written submissions. Further, apart from the right to make representations, there were no procedural guarantees in the statute. Justice Sharpe observed that the statute also allowed the Commissioner to refuse to consider a complaint where there was another more appropriate recourse. He found that this suggested that PHIPA was not meant to be an exclusive and comprehensive code.

The Court also found it significant that under PHIPA an award of damages could not be made by the Commissioner, and could only be made by way of a separate proceeding brought in the Supreme Court. Justice Sharpe found that this suggested that the Commission was not meant “to play a comprehensive or expansive role in dealing with individual complaints.” (at para 44) He concluded that “PHIPA provides an informal and highly discretionary review process that is not tailored to deal with individual claims, and it expressly contemplates the possibility of other proceedings.” (at para 45)

The second factor in the analysis required the court to consider the essential character of the claim, in order to determine whether a decision to assume jurisdiction would be consistent with the legislative scheme. The appellants argued that the claim was for nothing more than a breach of the PHIPA obligations, and that allowing the claim in tort to proceed would allow PHIPA to be circumvented. Justice Sharpe disagreed, noting that much more was required to make out the tort claim than to establish a breach of obligations under PHIPA. For example, the tort required a demonstration of intentional or reckless conduct, carried out without lawful justification, and in circumstances that a reasonable person would regard as highly offensive. On the whole, Justice Sharpe found that allowing the tort action to proceed in court would not undermine the scheme created under PHIPA.

The third consideration was whether the statute provided effective redress. The Court found that PHIPA gave the Commissioner a great deal of discretion when it came to the resolution of complaints, including the authority to decide not to proceed with a complaint. He also found that the complaints investigation process in PHIPA was generally meant to address systemic issues rather than to provide an effective recourse for individuals harmed by improper care of their personal information. Justice Sharpe noted that “Even if the Commissioner investigates a complaint, his primary objective in achieving an appropriate resolution will not be to provide an individual remedy to the complainant, but rather to address systemic issues.” (at para 59) Because of the broad discretion given to the Commissioner, any complainant whose complaint was not investigated would face “an expensive and uphill fight” to seek judicial review of the decision not to proceed. Justice Sharpe therefore concluded that the legislature had not intended to create a comprehensive code to deal with the consequences of misuse of personal health information.

The second issue considered by the Court was whether case law prevented the pursuit of the tort claim. Other courts had found that there was no right of action at common law where a statute provided a comprehensive scheme for redress. The leading case in this area is Seneca College v. Bhadauria, in which the Supreme Court of Canada ruled that the Ontario Human Rights Code precluded a separate common law tort of discrimination.

Justice Sharpe distinguished the Human Rights Code from PHIPA. He noted that the recourse under the Human Rights Code provided for awards of damages, whereas the Commissioner under PHIPA had no authority to award damages. Further, under PHIPA the Commissioner had a great deal of discretion to decide to proceed or not with a complaint, and chose to exercise that discretion so as to focus on systemic issues. By contrast, the Human Rights Code created a mechanism which focussed on the hearing of individual complaints. The two statutes were thus quite different. Justice Sharpe also distinguished two other cases involving labour relations legislation in which the courts refused to consider disputes that in their view should properly have been dealt with through arbitration or grievance mechanisms. Justice Sharpe noted that such proceedings provided an “accessible mechanism for comprehensive and efficient dispute resolution, and consequently form an important cornerstone of labour relations.” (at para 69) This was in contrast to PHIPA, where the Commissioner had given clear priority to the resolution of complaints raising systemic issues.

The Court concluded that there was nothing in PHIPA to support the view that the legislature intended to create an exhaustive code providing recourse for failures in the protection of personal health information. He found that permitting individuals to pursue claims at common law would not undermine PHIPA. He also found that the PHIPA scheme was such that in some cases individuals would not have effective redress under that statute. In the result, Ontarians now have the option of bringing tort claims for the mishandling of their personal health information. The case will also be of interest in other jurisdictions with personal information protection legislation.



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