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Articles and Publications

September 2007

E-Discovery: Overview and Latest Developments
in Ontario & Canada

Howard Borlack
Howard Borlack,
Partner

Laurie Murphy
Laurie Murphy,
Partner

By Howard Borlack and Laurie Murphy

 

Introduction

In today's ever increasing technological society, more so then ever companies and individuals are relying on electronic means to communicate, exchange and store documents and information. Whether it is via email or word processing, companies and individuals are moving away from hard copies and are depending increasingly on electronically stored information (ESI). More importantly and sometimes unbeknownst to the companies, individuals or their counsel, information and documentation are being stored indefinitely well beyond the previous retention of paper stored documents. ESI has created new challenges for the discovery process and implications for litigants.

E-Discovery: What is it?

E-discovery is defined as 'the preservation, retrieval, exchange and production of documents from electronic sources in electronic form.'1

Production Rules

Under the Ontario Rules of Civil Procedure,2 ESI is producible on discovery. In Rule 30.01 (1)(a), a "document" "includes a sound recording, videotape, film, photograph, chart, map, plan, survey, book of account and data and information in electronic form." In Rule 1.03(1), "electronic" is defined to include documents "created, recorded, transmitted or stored in digital form or in other intangible form by electronic, magnetic or optical means or by any other means that has capabilities for creation, recording, transmission or storage similar to those means." This includes disks, hard drives, CDs, DVDs, email messages and data stored on Blackberries or cell phones.

Case law appears to suggest that production of electronic documents is all-encompassing and can include virtually any file, document, image, recording, etc. that is stored electronically.3 Moreover, parties have an ongoing obligation to preserve relevant ESI, especially when litigation is reasonably expected to arise.

Preservation of ESI, just as is the case with paper documents, is a collaborative effort between lawyers and their clients. While it is the client's responsibility to ensure that their company or business has implemented an adequate retention policy, it is the lawyer's role to assist their client(s) in identifying relevant documents that are or may be pertinent to an action. Often a litigant's technology department is needed to provide their assistance to retrieve electronic information that the offices or the people involved in the litigation may not know still exists or whether it can be retrieved.

How is ESI Different from Paper?

E-discovery has introduced new issues to the discovery process. Part of the challenge stems from the fact that electronic documents differ from paper documents. There are 6 major differences between ESI and paper documents.4

  1. There are more electronic documents and information.
  2. Electronic documents can be stored in a variety of places.
  3. More than one person has access to the documents and databases and thus more than one person can edit, delete, or update an electronic document.
  4. Metadata, which includes information such as the date the file was created, who authored the document and when and by whom it was edited as well as the transmission history, can be hidden.
  5. Electronic documents are only compatible with the system and/or program that created them.
  6. Deleting a file does not completely erase the file from the hard drive.

Ontario Guidelines and Sedona Principles

In 2004, the Ontario Task Force on the Discovery Process established a subcommittee to consider electronic information and e-discovery. In 2005, the subcommittee released 13 guidelines, which were intended to be best practices for the legal profession in order to assist counsel with the e-discovery process.5

Originating out of a conference that took place in Sedona, Arizona, the Sedona Principles are a set of guidelines dealing with electronic discovery. The guidelines were developed in the United States, to provide practice tips for ESI preservation and production. Similarly, the aim of the Sedona Canada Principles is to give guidance to those who are required to produce electronic documents in the course of litigation. The principles deal with the responsibilities of the parties, sanctions for failing to comply and cost consequences to the parties.6

In February of this year, a draft of the Sedona Principles was distributed throughout the legal community for review and comment. To date, the Sedona Principles have not been implemented in Ontario. In the coming months however, a group of lawyers and judges will meet to finalize the legal principles that are to govern electronic discovery in Canada.

While the Sedona Principles have not been implemented in Ontario, it should be noted that courts in other jurisdictions have implemented Practice Guidelines with respect to e-discovery. Specifically, the Supreme Court of British Columbia and the Court of Queen's Bench of Alberta have both issued practice directions with respect to ESI.7

Sanctions

It is important to be aware of one's disclosure obligations. In fact, the failure to retain ESI has become a central issue in legal proceedings. More importantly, court imposed sanctions for party's intentional or reckless deletion or destruction of relevant ESI can be harsh. The Court of Appeal has even recognized the possibility that spoliation can be an actionable tort.

Court Sanctions can range from:8

  1. Findings of Contempt;
  2. Cost Orders;
  3. Exclusion of Evidence;
  4. Prohibiting a party from examining a witness;
  5. Drawing of an adverse inference;
  6. Dismissal of Action or Defence;
  7. Restriction on the scope of cross-examination or admissibility of evidence in chief.

When imposing a sanction, courts will take into account “the potential impact of the non-production on the costs and timeliness of the litigation; the scope of non-production; the timeliness of production; evidence of deliberate non-disclosure or intentional reckless disregard of the destruction of relevant or potentially relevant electronically stored information.”9

Key Considerations

As so much of today's business is conducted via electronic means, it is almost inevitable that there will be electronic documents that will need to be produced. In order to be prepared, companies should consider the following when it comes to the production of ESI:

  1. It is important for companies to be aware of their ESI disclosure and preservation obligations. The retention and retrieval of ESI needs to be discussed at the start of any dispute.
  2. It is important to have a document retention policy as well as a policy to deal with ESI in anticipation of litigation. Consequently, companies need to implement retention policies with respect to ESI. Policies should include timelines and procedures that are to be implemented when electronic evidence is required to be preserved in the course of anticipated or ongoing litigation.
  3. Due to the fact that there is simply more ESI, the costs to search, retrieve and store data is greater.
  4. Under the Rules, the producing party bears the costs of reviewing and searching for documents and receiving party bears the photocopy costs.10 While courts do have discretion to vary cost awards, it is not usually done until the end of the proceeding.
  5. Production and retention of ESI is based on proportionality. Courts will take into account cost of production, relevance to the proceeding, and the volume of ESI.
  6. In order to minimize costs and other court sanctions, it is imperative to deal with these issues early on in the process. Therefore, it is imperative that lawyers and their clients meet as soon as practical to discuss e-discovery obligations.

Summary

The production of ESI will be a major part of every lawsuit. It is important that lawyers and their clients develop protocols to deal with the storage and retrieval of data in advance of future legal disputes.


1 "Guidelines for the Discovery of Electronic Documents: A Supplemental Report of The Task Force on the Discovery Process in Ontario (October, 2005)", online: Commonwealth Legal (date accessed: August 21, 2007) [E-Discovery Guidelines].
2 R.R.O. 1990, Reg. 194.
3 CIBC World Market Inc. v. Genuity Capital market, [2005] O.J. No. 614 (S.C.J.).
4 For further elaboration on these differences please see The Sedona Canada Principles: Addressing Electronic Document Production. A Project of the Sedona ConferenceR, Working Group 7 (WG7), February 2007 Public Comment Draft), online: The Sedona Conference: 2007 at 2-3 [Sedona Principles].
5 E-Discovery Guidelines, supra note 1.
6 For a full list of Sedona Principles see attached.
7 See Chief Justice Donald I. Brenner, "Practice Direction re: Electronic Evidence". (dated accessed: August 23, 2007). See also Court of queen's Bench of Alberta, "Guidelines for the Use of Technology in any Civil Litigation Matter" (Civil Practice Note No. 14) (date accessed August 23, 2007).
8 List of Sanctions taken from Sedona Principles, supra note 4 at 36, See also Master C.U.C. Macleod, "E-Discovery: Lessons for the Case Law" (Electronic Discovery and the Sedona Canada Principles: Best Practices for Dealing with Electronic Information. Ontario Bar Association, 31, May 2007) [unpublished].
9 Sedona Principle, Ibid.
10 supra note 2, Rule 30.04 (7).


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