By James Plotkin, Student (LL.L), University of Ottawa
Whether you practice in Canada or the United States, the challenges and responsibilities associated with e-discovery and “Electronically stored information” (ESI) are prevalent in virtually all areas of litigation. Issues like the need to set out a discovery plan, preservation of evidence and spoliation are present in litigation in both the US and Canada. Though e-discovery is becoming more and more relevant in both countries, there are some fundamental differences in the way our judiciaries treat it.
We will observe the differences between e-discovery practices in the US and Canada from a case study perspective. However, it would be pertinent to first examine how these Nation-states broach the idea in regulation. In the US, both the state and federal governments have jurisdiction over procedural matters such as discovery. That is to say State Courts and Federal Courts are free to set their own rules of procedure. The Federal rules of civil procedure (FRCP) set out by the US Supreme Court govern American federal court procedure. Rule 34 deals specifically with the requirements parties must meet with regards to preservation of evidence and production of electronically stored date. State rules on e-discovery vary from one jurisdiction to the next but generally do not stray too far from the FRCP. In Canada the situation is similar. The Federal judiciary sets the rules for Federal Court and the Provincial judiciaries set rules for their own courts (excluding Quebec as we will see further). The result ends up being the same as in the United States. One marked difference is the lack of Canadian legislation or regulation specific to e-discovery within either order of government or court. Though the American Federal judiciary and many State judiciaries have enacted comprehensive principles and rules that deal specifically with the emerging issues consequent to e-discovery and massive amounts of ESI, little is being codified north of the border.
This has a trickle down effect on many Canadian judges resulting in a disinclination or apprehensiveness towards bringing sanctions for things like spoliation, negligent preservation of data or production of ESI for litigation. Of the 11 jurisdictions (10 Provinces and Federal), only Ontario and Nova Scotia have enacted rules on e-discovery. Three other provinces, Saskatchewan, Alberta and British Columbia have published practice directives on the subject. In their foreword to the Sedona Canada principles, Justice Colin Campbell of the Ontario Superior court and Justice J.E Scanlan of the Supreme court of Nova Scotia say that the Federal tax court is taking the principles under advisement though no amendments to the procedure have yet been made. It is true that the Sedona Canada principles very closely resemble those of the Sedona principles 2nd edition put out in 2007 for the United States. Both documents say that all electronic data is inherently discoverable, both talk about proportionality between e-discovery costs and nature and gravity of the litigation and both require that good faith steps be taken to preserve potentially relevant ESI once litigation can be reasonably anticipated (and so on and so forth). That being said, the documents do not carry the same weight in Canada as they do in the US. According to University of Ottawa professor Charles Belleau whose doctrinal writing on procedure has been cited by the Supreme Court of Canada, if Canadian law firms (other than those in Ontario and Nova Scotia) are adhering to the Sedona Canada principles, it is largely on a voluntary basis. Quebec is a province that is unique within the Canadian federation because of its mixed system of civil law and common law. In Quebec, rules of procedure are statutory and are therefore created and amended by the provincial legislature itself. This province relies on rules currently in place that treat the discovery process in general and has not yet enacted e-discovery specific legislation. The “Loi concernant le cadre juridique des technologies de l’information” (translation: An Act respecting the legal framework for information technology) addresses and affirms the validity of electronic documentation as a form of proof interchangeable with paper documents provided their integrity can be verified. Articles 2837-2840 of the Civil Code of Quebec also make reference to the equal validity of ESI to paper evidence. Nothing in these laws however dictates any procedure concerning the preservation or transmission of ESI, much less guidelines for sanction.
As alluded to before, this reality has a profound effect on the way Canadian judges view matters like motions for preclusion based on spoliation of evidence. This trend can be seen in Jay v. DHL [i] where the Prince Edward Island Court of Appeals overturned the first Instance judge’s decision to sanction failure to produce documents (see also McDougall v. Black & Decker Canada Inc.[ii]. In the somewhat controversial Cerkownyk v. Ontario Place [iii], the judge denied the defendants demand that the plaintiff produce a computer she claimed under affidavit to be destroyed after the litigation had started despite contradictory testimony from a computer specialist originally hired by the plaintiff.
On the matter of a parties duty to preserve evidence, the Saskatchewan Court of Appeal in Doust v. Schatz [iv] affirmed that “A party is under a duty to preserve what he knows, or reasonably should know, is relevant in an action. The process of discovery of documents in a civil action is central to the conduct of a fair trial and the destruction of relevant documents undermines the prospect of a fair trial.” This is consistent with what we have seen in American courts as well. A recent decision also from the Province of Saskatchewan, Culligan Canada Ltd. v. Fettes [v], shows the court abstaining from issuing an order for preservation and production of information sought by the plaintiff. The judge confirms that it is the responsibility of the parties to safeguard any information that may be pertinent to litigation. Vital files had been deleted via a disk-wiping program from the laptops in the defendant’s possession. The court however referred to e-discovery guidelines just enacted in the Province that required the parties to “confer early and throughout the proceedings”. On those grounds the judge dismissed the order until such a conference transpires. In this case the preservation of evidence took a backseat to the need for parties to confer early. This seems hardly in keeping with the values of American courts on the issue.
Up until now, Canadian jurists seem to be disposed to accept data loss as a matter of course in most cases and try to maximize the instances where a judgment on the merits of the case occurs. This “laissez faire” attitude has its strengths as well as draw backs which may be a matter for another article.
American judges on the other hand, armed with more comprehensive rules and guidelines, seem to be far less tentative towards awarding judgment based on matters such as spoliation and negligence to preserve data relevant to litigation. In Passlogix, Inc. v. 2FA Tech [vi] the defendant was found to be grossly negligent in maintaining communications via Skype, text message and e-mail. The court also found that computer logs were deleted deliberately. As a result, the defendant was fined $10,000 in addition to the judges awarding the plaintiffs motion for preclusion and costs.
Wisconsin v. Huggett [vii] is an example of a man being acquitted of murder charges after the police lost voicemail recordings considered to be an integral part of the defendants self defense claim. On a recent episode of the ESI Report podcast Judge James Babbitt who tried the case said “I believed that the tone and tenor of that voice mail message was necessary for Mr. Huggett to fully develop his defense.” This decision was subsequently upheld in the Wisconsin Court of Appeals.
A third and final example is Rimkus Consulting group, Inc. v. Cammarata [viii] where the court allowed an adverse inference jury instruction as a result of the defendant intentionally altering and losing e-mails. That court also specifically mentioned that spoliation of electronic information has become a hot issue due to the fact that it distracts from the merits of a case, adds costs to discovery and delays resolution.
These are but three of a plethora of recent examples where American courts have rendered judgment against a party allegedly guilty of spoliation of evidence or gross negligence. A marked difference from the Canadian approach, this too has its strengths and weaknesses. On the one hand the comments made by the judge in Rimkus is true in that these motions end up adding cost and distracting the court from the actual merits of the case. On the other hand, the integrity of the judgment on merits becomes questionable if spoliation or if lack of accountability for data preservation occurs and goes unpunished. One might argue however, that, in many cases, an adverse inference instruction can be damning enough.
No one can deny the importance of e-discovery regulation. It can touch any area of litigation and can affect the biggest firm right down to the solo practitioner. Canada will undoubtedly catch up to the US in enacting and enforcing more e-discovery specific rules and laws. The question then becomes, how long will this legal delay north of the border continue to distinguish common practice in these two countries?
i) 2009 PECA 2 (CanLII), 2009-02-13, S1-AD-1151
ii) 2008 ABCA 353 (CanLII), 2008-10-30)
iii) 2009 CanLII 62065 (ON S.C.) 2009-10-22
iv) 2002 SKCA 129 (CanLII)
v) 2009 SKQB 343 (CanLII) 2009-09-01
vi) LLC, 2010 WL 1702216 (S.D.N.Y. April 27th 2010)
vii) No. 2009AP1684-CR (Wis.Ct.App. Apr. 6, 2010
viii) 2010 WL 645253 (S.D Tex. Feb. 19, 2010)
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