Privacy Commissioner’s authority questioned by insurer, private investigators

Insurers and private investigators are challenging the authority of the Office of the Privacy Commissioner (OPC) to intervene in claims investigations.
The insurance industry yielded 17% of the complaints lodged in 2008 under the Personal Information Protection and Electronic Documents Act (PIPEDA).
In May 2009, the OPC issued guidelines to the private sector related to the use of covert video surveillance.
Private investigators have been reported in media as calling on the insurance industry to disregard the directives.
“Our advice to the industry is if you need to investigate, do not be deterred by the privacy commissioner’s guidelines,” Normon Groot, counsel to the Canadian Association of Private Investigators, told canada.com.
“We challenge the privacy commissioner on the existence and scope of a right to privacy in public places, and we say that where there are flags of fraud, the right to defend and the right to investigate supersedes another’s right to privacy of their image in a public place,” Canada.com quoted Groot as saying.
In an application to New Brunswick’s Court of the Queen’s Bench, State Farm Mutual Automobile Insurance Company questioned the OPC’s jurisdiction to investigate a refusal to provide access to personal information. State Farm also questioned the OPC’s power to compel the production of documents during the course of an investigation.
In its application, State Farm argued that:
•    PIPEDA does not apply, since State Farm is not engaged in “commercial activities” when it collects, uses or discloses personal information in the course of defending its insured against litigation initiated by the complainant;
•    If PIPEDA does apply, PIPEDA was enacted outside the power allotted to Parliament;
•    The Privacy Commissioner lacked the authority to investigate the claim; and
•    The privacy commissioner has no right to request or compel from State Farm information necessary to conduct an investigation.
The Court of Queen’s Bench determined that the Federal Court was the more appropriate forum to determine State Farm’s application.
State Farm was granted leave from the Federal Court for an extension of time to file a similar application before the Federal Court.