A professional engineer, formerly the Director of e-Litigation Services at a major Canadian e-discovery forensic vendor, Chuck brings extraordinary technical advisory expertise to Wortzman Nickle. 

As Director, e-Discovery Services at Wortzman Nickle, Chuck will provide technical and practical advice to law firms and corporations regarding the most efficient and cost-effective methods for all phases of e-discovery, from preservation through to production.  Chuck will play an instrumental role in further developing our practice in the records management realm. He will complement our team of counsel that advises our clients on records management policies. Chuck will assist clients in selecting the best software solutions and protocols available to manage the classification and organization of business records.  

Wortzman Nickle is Canada’s e-discovery law firm, assisting corporations and their counsel to find practical and cost-effective ways to meet their e-discovery obligations. 

To contact (and congratulate!) Chuck regarding his new role, email him at crothman@wortzmannickle.com.

The Appeal

These basic principles (in part) formed the subject matter of the recent appeal case of Wahid v. Malinovski, 2010, ONSC CanLII 3249, decided on July 7, 2010.  The court was asked to overturn the order of a Master who had ordered Wahid to provide a further Affidavit of Documents and to produce certain relevant document by a determined date. The main grounds for the appeal were that the Master misapplied Rule 29.01, that she failed to apply the “purpose and spirit of the new Rules”, that she misapprehended the evidence regarding the relevance of the requested documents, and lastly, that she failed to exercise her discretion judicially in granting an award of costs. 

The Dismissal

The court dismissed the appeal in its entirety. 

The value of this case?

In its decision, the court confirms that the amendments to the Rules do not negate pre-existing discovery obligations or judicial discretion.  

Pursuant to Rule 30.04(5), the court may at any time order production of unprivileged, relevant documents in the possession, control or power of a party…[n]one of the new Rules amendments hamstring the court’s discretion under Rule 30.04(5) to order production of documents for discovery. (para. 11) 

Further, the basic principles of fairness and efficiency in litigation, and the doctrine of proportionality continue to be endorsed by courts:  

Discovery is to facilitate settlement or, if that is not achievable, to make the trial process more efficient and fair. Concerns about discoveries being unduly long and costly, sometimes turning into fishing expeditions, have stewed in recent years:  see Osborne Report at 59. New provisions were added and certain provisions of the Rules were amended…to streamline the discovery process.” (para. 6) 

Rule 29.2.03 sets out a list of factors to be considered by a court when ordering production of unprivileged, relevant documents in the possession control or power of a party (including time, expense, prejudice, undue interference with the orderly progress of the action, availability of the information or record)…underpinning all of the factors listed in the Rule is the overriding principle of proportionality. (para. 9)

In the very recent case of Guestlogix v. Hayter, 2010 ONSC 4384 (CanLII), Guestlogix Inc. brought a motion compelling Hayter to provide electronic versions of previously-produced documents. Justice D.M. Brown required that the parties deliver supplementary materials, both evidence and statements of law, detailing the requested format of production, the reasons why Guestlogix required production in that format, and any undue burden imposed on Hayter to produce the data in that format.  Brown J. expressly endorsed the doctrine of proportionality in providing the following directions: 

The parties must appreciate that my consideration of the request will be informed by the general principle of proportionality (Rule 1.04 (1.1)), as well as the more specific principles of proportionality applied to electronic discovery through the Sedona Canada principles (Rule 29.1.03(4)). Their materials should address those principles. 

In a supplemental endorsement, Brown J. continued: 

To those requirements, I add the requirement that the plaintiff serve and file a Proportionality Chart – Document Production, in the format set out by the Ontario E-Discovery Implementation Committee, and the defendants serve and file a responding chart. 

The Ontario E-Discovery Implementation Committee precedents, located on the OBA website, continue to be excellent resources for counsel. It is interesting to see courts not only turning to them as precedents, but ordering their use by parties. 

For assistance in drafting or arguing specialized motion materials on proportionality, cost-shifting, defensibility of search terms and other filters, and all other production issues, call Wortzman Nickle. We know that the success of your motion is in the details.

The Case

In Apotex Inc. v. Richter Gedeon Vegyeszeti Gyar RT, [2010] O.J. No. 2718, the defendant Ercros moved for a further and better affidavit of documents, including a particularized privilege schedule, and production of all relevant documents in the power, possession and control of the plaintiff, Apotex. 

Apotex moved for assistance in the particularization and the provision of enhanced electronic access to Ercros’ productions. Apotex alleged that the DVD originally produced by Ercros did not sufficiently describe its documents and further, that Apotex had experienced difficulty in retrieving specific documents from it. Ercros then produced its documents in a Summation Briefcase to allow Apotex to import the documents directly into its own document management software. Apotex took the position that was insufficient. 

The Decision

Master Short favoured Ercros, citing the new Rules of Civil Procedure, The Sedona Canada Principles®, and the test for proportionality. Ercros was granted the relief sought, while Apotex’s motion was dismissed. The provision of the Summation Briefcase was deemed sufficient in that Apotex had no further difficulties accessing the Ercros productions.  

Lessons Learned (and to be learned)

Noting that “there are lessons to be learned by the profession on how to deal with what are clearly problems that are contributed to by enhanced modern computing power and software”, Master Short commented favourably on counsel’s efforts in this case to fashion a sensible solution to the problems encountered. The use of electronic production to gain tactical advantage was discouraged: 

The requirement, in part arising from the “equality of arms” component of proportionality, does not mean that a party need provide a computer system to their opponents, but they do need to work together to facilitate the exchange of information and a practical production and exchange of the “bibliographic data” attached to their productions.” (para. 71) 

What does this case mean?

This case stands for a number of interesting and useful discovery propositions, including: 

• In this electronic age, a motion for a further and better affidavit of documents can be brought solely to obtain the court’s assistance in establishing the format in which electronically stored information will be produced along with the format, content and organization of information to be exchanged; (para. 73)  
• Courts expect counsel (to at least attempt) to solve their production problems in a co-operative and pragmatic fashion; (para. 42)
• Electronic production should not be used by one party to gain a tactical advantage over another; (para. 71)
• “Proportionality requires both sides to turn their minds to documents that are not in their direct possession. Often parties simply acknowledge they once had the originals of documents for which they now only retain a “file copy”. The requirement of the Form is broader. Particularly where there are corporate affiliates over which a party has the “power” to obtain copies. Whether listed in Schedule “A” or “C” such documents still need to be identified and produced, if available.” (para. 113)

Electronically stored information presents unprecedented challenges to counsel who have a duty to protect privileged information. Predictably, the risk of inadvertent disclosure of privileged records rises proportionately with the volumes of information being produced. As counsel, we must bear in mind that preserving privilege is of paramount importance. 

This principle was recently confirmed by the Supreme Court of Canada in Ontario (Public Safety and Security) v. Criminal Lawyers’ Association 2010 SCC 23 (CanLII). In its decision, the Court confirmed the “near absolute character of solicitor-client privilege”. Citing the SCC decision of R. v. McLure , 2001 SCC 14 (CanLII), the Court reiterated: 

… solicitor-client privilege must be as close to absolute as possible to ensure public confidence and retain relevance.  As such, it will only yield in certain clearly defined circumstances, and does not involve a balancing of interests on a case-by-case basis. [para. 35] 

While the recent case relates to a constitutional issue involving solicitor-client privilege and not general discovery per se, it is clear that Canada’s highest court continues to be willing to zealously guard the doctrine of privilege. It is inside this framework that potentially privileged information must be carefully reviewed and appropriately protected from inadvertent disclosure in every case. 

If you require assistance with reviewing electronically stored information for privilege or with the drafting of a non-waiver agreement to protect you and your client in the event that privileged documents are inadvertently produced, please contact Wortzman Nickle.

Both Master Calum MacLeod, a case Master for the Ontario Superior Court of Justice in Ottawa, and Judge Frank Maas, a Magistrate Judge of the U.S. District Court for the Southern District of New York, not only unanimously endorsed records management policies, but strictly warned companies of the implications of not having them.

Master Calum MacLeod cautions that such companies will be hard pressed to argue that a discovery request is unreasonable when they have no idea in terms of time and cost what is required to retrieve the information sought by the opposing party. He states:

“Companies without a protocol for managing electronically stored information are in big trouble for a number of reasons. It will cost them a fortune to respond to e-discovery requests; they’re going to have a tough time finding what they need and it will be difficult for them to raise the proportionality argument when they have no idea what’s involved in retrieving the information.”

What are the courts looking for in terms of a sound, defensible policy?  In the words of Judge Maas, “judges are looking for consistency, internal logic and transparency, and in certain cases, a retrieval policy that ensures metadata is not altered.”

With respect to e-discovery expertise, Judge Maas believes that unsophisticated companies are at the greatest risk.  He warns that:

“The difficulty is that these companies try to deal with e-discovery themselves without retaining experienced counsel, and then they end up spending far more money to salvage the situation.”

The view of these experts is that pro-active work saves time and money in e-discovery.  It’s difficult to argue with that theory.  Is your company prepared?

In the case of Szeto v. Dwyer 2010 NLCA 36 (CanLII), the Court of Appeal was asked to consider an interlocutory decision of a trial judge ordering answers by the plaintiffs (appellants) to certain interrogatories delivered by the defendant (respondent) in a personal injury claim. Due in part to its analysis of proportionality, the Court ultimately declined to order answers to the interrogatories.

Accepting that “the interpretation and application of a particular rule of court must be undertaken in the context of the rules as a whole and in accord with their underlying spirit and purpose,” [para 52] the court first undertook a significant review of the concepts underlying the doctrine of proportionality. The court confirmed that for rules involving discretion, in this case the rules regarding pre-trial discovery and disclosure, this includes an “application of an underlying principle of proportionality which means taking account of the appropriateness of the procedure, its cost and impact on the litigation, and its timeliness, given the nature and complexity of the litigation.” [para 53]

Although the Newfoundland and Labrador rules of court do not expressly include the doctrine of proportionality (in contrast with most of the other jurisdictions in Canada), the court confirmed that this principle is nevertheless derivable from the underlying purpose and structure of the rules and the approach to their application in the case law interpreting them. It held that the following general principles and concepts are relevant:

1.  The fundamental purpose of the rules of court is to ensure an expeditious and cost effective determination of the merits of each case that is fair to all sides;

2.  The rules cannot be interpreted selectively and in isolation but must be read in conjunction with the rules as a whole;

3.  The rules involving discovery and disclosure by their nature are inherently flexible in their operation and application. They are not intended to have invariable application in every case regardless of circumstance or to dictate a specific result in a particular case;

4.  The decisions made on procedural matters involving the exercise of discretion require a balancing of the interests of each party against the interests of the others with a view to achieving a result that is fair to all sides. 

5.  Individual rules respecting disclosure and discovery have built within them the idea that their invocation may not always be appropriate in particular circumstances. The principle of proportionality underlies the interpretation and application of these rules. The court must always consider and take account of proportionality, in the sense of the appropriateness of the procedure, its cost and impact on the litigation and its timeliness, in the context of the nature and complexity of the litigation. [para 55]

The court concluded that the principle of proportionality applies not only to the parties, but to the court exercising a discretion under the rules. In its decision, the court emphasized that the principle of proportionality has general application to rules involving discretion. It went on to caution that “a party invoking a rule, taking a position or making an application that is ultimately determined to be not in accordance with the proportionality principle should anticipate that there may be adverse costs consequences”.  [para 54]

This case then stands for the proposition that parties and their counsel must proceed with the doctrine of proportionality in mind. More significantly, it assists counsel with understanding how this doctrine may be applied by courts in the context of pre-trial discovery and disclosure.

Following the IQPC conference in Toronto in late June, Susan Nickle was interviewed by Julius Melnitzer for an article published in the Legal Post section of the National Post on July 7, 2010.

Titled “Records Management Key to Navigating Lawsuits”, the article explores the corporate risks of not having a well-managed records management program. This is consistent with Wortzman Nickle’s position that an enforced, defensible records retention policy is the foundation for a streamlined, cost effective, and efficient e-discovery process.

However, it is not just litigation risks that are mitigated by such policies. Corporations who face competition complaints, regulatory investigations or audits also benefit enormously from good records management. Further, there are numerous and compelling business efficacy reasons to implement good policies, including significant increases in employee productivity and reductions in data storage costs.

In 2010, Wortzman Nickle has seen a significant increase in corporate interest regarding the drafting and implementation of records management policies and protocols. A successful records management regime requires a healthy marriage between legal and IT. We speak the languages of both domains. Please contact our firm for details regarding the essential aspects of good records management.

Well-positioned on the heels of the G20 Summit in downtown Toronto comes Legal IQ’s (a division of IQPC) conference to assist corporate counsel in curtailing the rising costs of discovery. From June 28th to 30th, e-discovery experts (and those wanting to be in the know) from across North America will meet at the Sheraton Toronto Centre to address this very timely issue. 

What is interesting about this conference is its very balanced speaker mix of in-house and external counsel from private and public organizations, judges, and e-discovery vendors, from across both Canada and the United States. Primarily conducted in workshop and panel format, this conference emphasizes a very practical approach to minimizing the costs of e-discovery.  

Topics will include:

• Overcoming eDiscovery and informational challenges
• Conquering new sources of eDiscovery: Facebook and other social media
• Aligning the interests of in-house counsel, outside counsel and IT teams
• Building cutting-edge programs with a winning team that will reduce costs
• Solving eDiscovery problems in M&A and departing employees
• Using eDiscovery in criminal, fraud, tax and white collar crime cases
• Implementing the Rules of Civil Procedure to contain costs for corporations and governments

As a member of the Advisory Board for this conference, our Susan Nickle is co-facilitating a workshop on “Early Case Assessment Strategies and the Pitfalls of Disjointed Collection”.  

We’ll keep you posted on key (perhaps contentious?) issues arising at this interesting conference

This annual event gave us the opportunity to re-group, review processes and files, and team-build. Guided by a comprehensive agenda and inspired by the beautiful surroundings, our team has emerged stronger and more efficient than ever.

Key topics of interest?  Efficient collection and data processing, lawyer review processes and platforms, plus project management best practices ruled the day. We know that being efficient with processes and reporting keeps files on track, on budget, and clients happy.

In the name of team-building, we took on a “strenuous/advanced” mountain hike in the rain, as well as two yoga classes. There’s nothing like sore muscles, exhaustion, and a few headstands to bring a legal team together.

Things to watch for?  Wortzman Nickle’s edgy, innovative, advertising campaign, introduced this Spring and to be continued in the Fall.  Some other surprises are in store for our firm…stay tuned.