Caskey on Proportionality and the New Ontario Discovery Rules

Amendments to the Ontario Rules of Civil Procedure came into effect on January 1st, 2010. Since January 1, 2010 Wortzman Nickle has been busy attending Meet and Confer sessions with our clients and advising them on discovery plans. 

Most importantly, Ontario has now formally adopted the principle of “Proportionality” and if all goes as planned, the culture of litigation in Ontario will be changing as well. 

The new Ontario Rules adopt the Sedona Canada Principles and require the parties to agree upon a “Discovery Plan” (Rule 29.1.03) which includes the scope of discovery, timing for delivery of each party’s affidavit of documents, information with respect to the costs and manner for production, names of the persons who will be produced  and any other information that will facilitate an expeditious, cost–effective discovery and ensure that the process is “proportionate” to the importance and complexity of the action. 

Rule 1.04(1.1) will give judges the mandate to “make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved”. The new Rules further entrench “Proportionality” into the discovery process by providing the court with guidelines to consider when deciding whether a party must answer a question or produce a document (Rules 29.2.03): 

The Supreme Court of Canada recently considered the principle of proportionality in Marcotte v. Longueil (City), 2009 SCC 43 (CanLII). Although the decision deals with a class action case in Quebec, the majority of the Court affirmed that the principle of proportionality confers a real power on the courts, and is not just limited to a principle of interpretation. The Supreme Court further held that proportionality is a valuable source of the courts’ power to intervene in case management to ensure that the litigation is consistent with the principles of good faith and balance between litigants.  

The courts have always had the discretion to either expand or restrict discovery and production. (See the recent decision of Justice Cullity in Pearson v. Inco Limited, 2009 CanLII 37928 (On S.C.).) The new Ontario Rules, however, charge the courts with a more active role. 

Lawyers beware – the days of the “document dump” are over. Similarly, the days of making unreasonable production requests are over. The new Ontario Rules require counsel to co-operate and work together to come up with a Discovery Plan.  If they are unable to do so, the courts will intervene and apply the principle of proportionality in order to ensure that actions are not extended for years unnecessarily thereby increasing costs astronomically.  

If you require assistance with your Discovery Plan, contact Wortzman Nickle.

Judge Scheindlin amends her original order on January 15, 2010

 To read the amendment please Click Here

Pension Comm v Banc of Am recent decision…

 This entry is from a special guest and friend of the firm, Jonathan Redgrave.  Jonathan is a partner at Nixon Peabody LLP in Washington, D.C., and was the first chair (and is currently chair emeritus) of the original Sedona Conference Working Group on Electronic Document Retention and Production in the United States.  He has spoken at numerous conferences in Canada (as well as the rest of the world) and has been a key supporter of the work of Sedona Canada.

E-Discovery News from Across the Border 

Nothing like starting the year with e-discovery fireworks like an 87 page opinion from the Hon. Shira A. Scheindlin, a U.S. District Judge from the Southern District of New York.   Judge Scheindlin, of the Zubulake series of cases that have been oft-cited in cases and conferences on both sides of the border, had occasion in her latest opinion to walk through her concerns relating to legal holds, preservation and sanctions.  While the precise legal holdings of the case are certainly limited to her courtroom, the practical impact of the detailed decision is likely to have far reaching import. 

Fittingly for this blog, the first named plaintiff (of thirteen) hails from Canada: The Pension Committee of the University of Montreal Pension Plan, et al. v. Banc of America Securities, LLC, et al., U.S. District Court, Southern District of New York, January 10, 2010).  In the course of the 87 page sojourn through facts and law, Judge Scheindlin take the different plaintiffs to tasks for various failures to preserve and produce information.  Her findings range from negligence to gross negligence, and sanctions imposed include additional (limited) discovery, an award of fees and, for some, an adverse inference jury instruction. 

What in particular can Canadians learn from below the border?  The failure to have a meaningful, written instruction to employees  to preserve information is simply inexcusable for Judge Scheindlin.  Making sure that this written instruction provides adequate instructions allowing the custodian to take appropriate action  is also critical to avoid negligence.  Further, leaving custodians to execute legal holds without supervision is also a no-no.  

The opinion also documents concurrent failures to disseminate the holds broadly enough and to capture and preserve appropriate stores of electronic information   In some instances, some key employees simply were not identified and informed.  In others, pertinent back-up tapes and computers were ignored and the evidence ultimately lost.  In the end, the defendants were able to demonstrate the gaps and omissions were significant enough to warrant the sanctions imposed on the plaintiffs. 

This opinion continues a trend that is emerging from other cases at the end of 2009 in the United States—judicial patience with inadequate and inept discovery preparedness and execution is wearing thin.  The premium on getting discovery (especially e-discovery) right is rising quickly.  There is a clear warning to corporate and institutional parties large and small—you need to know what you are doing with respect to the preservation and production of electronic information or else face significant consequences for failures. 

These lessons are not confined by the border by passport control, and Canadian clients and counsel alike should take heed.

To view the PDF of this file please Click Here