instant mbna credit card application

B L A K E S M E A N S B U S I N E S S Electronic Discovery: Thursday, November 23, 2006 Understanding the Challenges w w w. b l a k e s. co m AGENDA ELECTRONIC DISCOVERY: UNDERSTANDING THE CHALLENGES November 23, 2006 ____________________________________________________ Seminar Agenda 8:00 8:30 8:30 a.m. 10:00 a.m. Breakfast Presentations • • Basic Concepts and Definitions Brad Cran Navigating the Ontario E-Discovery Guidelines Kathryn Manning E-Discovery: The Game of Documents Alan Aucoin Privilege and E-Discovery Jeff Galway Preservation of Electronic Evidence: Why it Pays to Preserve Sharon Wong Privacy and E-Discovery Catherine Beagan Flood Panel Discussion Joel Richler, Jill Lawrie, Kathryn Manning • • • • • 1234 INDEX ELECTRONIC DISCOVERY: UNDERSTANDING THE CHALLENGES November 23, 2006 ____________________________________________________ Index Tab PowerPoint Presentations ..................................................................................... 1 Reference Materials Guidelines for the Discovery of Electronic Documents in Ontario ................................ 2 “E-Discovery in Ontario: The Guidelines and the Challenges”, paper written by Kathryn J. Manning ............................................................................ 3 “Preservation of Electronic Evidence: Why it Pays to Preserve”, paper written by Sharon S. Wong ................................................................................ 4 “Privacy and E-Discovery”, paper written by Catherine Beagan Flood......................... 5 About Blakes ................................................................................................................ 6 Blakes National Litigation Group .................................................................................. 7 Presenter Profiles....................................................................................................... 8 Joel Richler Mary Jane Stitt Alan Aucoin Jeff Galway Sharon Wong Jill Lawrie Kathryn Manning Catherine Beagan Flood Brad Cran 1234 TAB 1 Electronic Discovery: Understanding the Challenges November 23, 2006 Basic Concepts and Definitions Brad T. Cran 1 Electronic Documents • Ontario Rules for Production • Document includes any relevant “sound recording, videotape, film, photograph, chart, graph, map, plan, survey, book of account and data and information in electronic form” • similar definition in Federal Court • obligation extends then to produce relevant data and information that exists in electronic form Electronic Data and Information • Documents in Word/WordPerfect that have not otherwise been reduced to hardcopy • E-mails - Native format is pst. (Outlook) and nsf. files (Lotus) • databases (Access, Excel) • Miscellaneous, where relevant: electronic calendars, notes, web pages (WayBackTimeMachine www.archive.org), browser history files, cell phone logs 2 Meta-Data • the hidden data in electronic information – authors, hidden revisions, date created, etc. – a by-product of electronic production • includes the “right click” data • can be a means of establishing authenticity of a document, or challenging dates of creation • not always going to be relevant, but being sought more often now Storage Media to Consider • Run through list of possible storage locations – servers – the host computer on a network – desktops, hard drives and laptops – disks, diskettes, thumb drives/USB flash disks - Blackberrys and other PDAs • What about backup tapes stored off-site? - not generally producible unless relevance and necessity clearly demonstrated 3 Types of Data • Active Data - the “day to day” data • Archival Data – part of records retention practice, but not normally immediately accessible • Backup Data – an exact copy of data stored for disaster recovery purposes – not normally required to be produced • Residual data (data that has been deleted but not yet overwritten) and replicant data (automatic backups while working on a document) – forensic experts can restore them Navigating the Ontario E- Discovery Guidelines Kathryn J. Manning 4 What are the E-Discovery Guidelines? • Task force on the Discovery Process in Ontario • November 2003 • Recommended “best practices” for discovery process • Intended to complement the Rules of Civil Procedure • Sub-committee struck in 2004 to specifically deal with e-discovery • Responding to realities of computer age • Provide guidance in carrying out effective e-discovery • Issued draft Guidelines in Fall 2005 Overview of the Guidelines • Three sections: • Section A – Objectives and purposes of the Guidelines • Section B – Key issues and terminology • Section C – Principles and commentary • The Guidelines note that the stages of ediscovery are the same as “traditional” discovery: • • • • Location of documents Preservation Review Production 5 Key Principles in the Guidelines • • • • • • E-discovery (Principles 1-4) Preservation (Principles 5-7) Pre-discovery discussions (Principles 8-10) Production of E-Documents (Principle 11) Privilege (Principle 12) Costs (Principle 13) E-Discovery (Principles 1-4) • Electronic documents containing relevant data and information are discoverable • Balancing principle based on: • cost, burden and delay • nature and scope of the litigation, importance of the issues, and the amounts at stake • relevance and importance of the e-documents • Primary source – active data and information stored to anticipate future business use that can be efficiently searched and retrieved 6 Preservation of E-Documents (Principles 5-7) • When litigation is threatened or contemplated take immediate reasonable and good faith steps to preserve. For example: • “litigation hold” • collect all relevant policies • cease or suspend all practices that could result in destruction or modification • create litigation copies of potentially relevant active data sources • Place other side on notice with respect to preserving electronic documents as early as possible Pre-Discovery Discussions (Principles 8-10) • Consultation and cooperation • “Meet and Confer” to determine, for example: • • • • • relevant time period identity of individuals computer systems or media electronic documents that can and should be preserved what can be made accessible and searched on a cost effective basis • search terms • how materials are to be produced • Use of electronic tools and processes 7 Production, Privilege and Cost (Principles 11-13) • Agree early in the litigation process on the format in which electronic documents will be produced and where possible, produce electronically • Where appropriate, agree to measures to protect privilege and other objections to production of electronic documents • Costs rule is generally the same as paper production Future Developments to Watch For • Sedona Canada Guidelines • Ontario Practice Direction • Changes to the Rules of Civil Procedure • National Practice Direction 8 E-Discovery: The Game of Documents J. Alan Aucoin Start at Go • Our system of litigation is premised on the principal of disclosure of relevant documents as determined by the issues raised in the pleadings. • Documents have always been widely defined and the courts have adopted flexible interpretations that reflect changes in technology: see Reichmann v. Toronto Life Publishing Co (1988), 66 O.R. (2d) 65; Prism Hospital Software Inc. v. Hospital Medical Records Institute, [1991] B.C.J. No. 3732 (B.C.S.C.) (QL). 9 Advance • The Rules of Civil Procedure provide the starting point for discovery obligations of the parties and their counsel. The definition of “documents” in the Rules includes “data and information in electronic form”. • The Guidelines for the Discovery of Electronic Documents in Ontario have added additional levels of obligation and guidance. They are described as a “best practices manual” to specifically address the discovery of electronic documents. • Court decisions in Canada and the United States provide further guidance as to the manner in which electronic evidence must be produced, discovered and used. Take a Ride on the Reading • Problems relating to electronic discovery have been described by some as costing more to litigate than class actions. • Air Canada v. WestJet Airlines Ltd. (2006), 81 O.R. (3d) 48 demonstrates the extent to which the courts will hold the parties accountable for their discovery obligations (a form of review is contemplated after electronic searches have turned up potentially relevant documents – even if the number is as great as 85,000). • See also: CIBC World Markets Inc. v. Genuity Capital Markets, [2005] O.J. No. 614 (Ont. S.C.J.) and Re: Portus Alternative Asset Management Inc. (2005), 28 O.S.C.B. 2670 (O.S.C.). • Some have suggested that the threat of forcing a corporation (and its counsel) to review thousands of electronic files is substantial settlement leverage. 10 Go Directly to or Visit Jail • The consequences of not protecting electronic data and documents can be significant. • Zubulake v. UBS Warburg - US employment discrimination case resulted in a series of decisions between 2003 and 2005 – 5 of which were interim. Employer was found to have destroyed relevant e-mails and failed to protect others. Judgment for the plaintiff – US $29 million, $20 million of which was awarded as punitive damages. • Coleman Holdings, Inc. v. Morgan Stanley Co, Inc. Co. Coleman sued Morgan Stanley for fraud and conspiracy in connection with a stock sale. Coleman sought production of electronic and other documents and Morgan failed to disclose all. Found to be acting in bad faith and knowingly and deliberately failing to preserve and produce e-mails, Coleman was awarded US $604 million compensatory and US $850 million punitives. …Jail • Spasic Estate v. Imperial Tobacco Ltd. (2000), 49 O.R. (3d) 699 (Ont. C.A.) determined that spoilation of evidence could constitute an independent tort, even if the destruction was not willful or malicious. • But see - Arthur Andersen LLP v. United States pending an investigation, Arthur Andersen’s counsel advised Enron employees to continue destroying documents in compliance with the company’s document retention policy. On appeal, the Supreme Court overturned a criminal conviction because it had not been proved that Arthur Andersen was conscious of their wrongdoing. 11 Welcome to Community Chest • Principles of co-operation are the cornerstone of the Guidelines and have been referenced by the courts: see Air Canada and JDS Uniphase Inc. v. Metconnex Canada Inc. [2006] O.J. No. 4148 (Ont. S.C. – Master). • Principle 8: Counsel should meet and confer, as soon as practicable and on an ongoing basis, regarding the location, preservation, review and production of electronic documents, and should seek to agree on the scope of each party’s rights and obligations with respect to ediscovery, and a process for dealing with them. …Community Chest • Principle 9: The scope of e-discovery should be defined by parties and their counsel before commencing oral examinations for discovery. This can best be achieved if parties’ requests for preservation of electronic documents, and pre-discovery meetings between counsel, are as specific as possible in identifying what is requested, what is being produced, and what is not being produced, and the reasons for any refusals. 12 …Community Chest • Principle 11: Parties should agree early in the litigation process on the format in which electronic documents will be produced. Such documents may be producible in electronic form where this would (i) provide more complete relevant information, (ii) facilitate access to the information in the document, by means of electronic techniques to review, search, or otherwise use the documents in the litigation process, (iii) minimize the costs to the producing party, or (iv) preserve the integrity and security of the data. …Community Chest • Principle 13: In general, consistent with the rules regarding production of paper documents, pending any final disposition of the proceeding, the interim costs of preservation, retrieval, review, and production of electronic documents will be borne by the party producing them. The other party will, similarly, be required to incur the cost of making a copy, for its own use, of the resulting productions. However, in special circumstances, it may be appropriate for the parties to arrive at a different allocation of costs on an interim basis, by agreement or court order. 13 Privilege and E-Discovery Jeff Galway What Is The Issue? • E-discovery can involve a heightened risk of inadvertent or unintended disclosure of privileged information due to the volume of information involved. • Cost of reviewing all electronic records for “privilege” prior to production to opposing counsel can be time-consuming and expensive. 14 Does Inadvertent Disclosure Constitute Waiver? • Inadvertent disclosure of privileged documents does not automatically result in a waiver of privilege. • Line between excusable “slips” and disclosure constituting “waiver” is not clear. • Factors court will consider include reasonableness of precautions taken to prevent disclosure, steps taken to rectify error and unfairness caused to opposing party. Air Canada v West Jet Airlines • Solicitor-client privilege is not a principle to be sacrificed to the interests of expediency or economics. • Court was not prepared to grant a blank order excusing inadvertent production of privileged documents. • In appropriate cases – protective orders may be granted. 15 Strategies For Dealing With Privileged Documents • Consider and document procedure that will result in a reasonably careful review for privilege. • Prior to production, attempt to obtain agreement with opposing counsel about approach to protecting privilege. Strategies For Dealing With Privileged Documents (cont’d) • Consider need of seeking court order protecting against inadvertent waiver. • Move quickly to deal with instances of inadvertent disclosure. • Have procedure in place to handle privileged communications inadvertently received. 16 Preservation Of Electronic Evidence: Why it Pays to Preserve Sharon Wong Overview • Valuable secrets may be lurking on hard drives and memory chips, • How to recover those secrets and use them for your own advantage, and • What to do if the other guy doesn’t play fair. 17 What Secrets May be Lurking • Meta-data that shows intent to destroy evidence • Automatic electronic logs • Web pages and browser histories • Historical e-mails: backup tapes, ISP servers Preserving and Using the Secrets • E-Discovery Guidelines contain three Preservation Principles. • Practical suggestions on how to fulfill parties’ existing discovery obligations 18 Principle 5 • “As soon as litigation is contemplated or threatened, parties should immediately take reasonable and good faith steps to preserve relevant electronic documents. However, it is unreasonable to expect parties to take every conceivable step to preserve all documents that may be potentially relevant.” The “Litigation Hold” • “The obligation to preserve relevant electronic documents applies to both parties. Counsel should advise clients with respect to this obligation at the earliest possible time, including the steps that may be prudent or required to implement a ‘litigation hold’.” 19 Principle 6 • “Parties should place each other on notice with respect to preserving electronic documents as early in the process as possible, as electronic documents may be lost in the ordinary course of business.” Principle 6 … • Certain types of electronic information may be routinely updated or changed, with the result that information that may exist today may not exist tomorrow. • As soon as litigation is contemplated, consider what relevant documents are liable to be lost, deleted or modified in the ordinary course of business, and notify your opponent to preserve. 20 Principle 7 • “Parties should discuss the need to preserve or produce meta-data as early as possible. If a party considers meta-data relevant, it should notify the other party immediately” Relevant Meta-Data • Meta-data in all e-mails assumed to be relevant • What else? – word documents? – spreadsheets? – electronic logs? Depends on the circumstances of the case 21 If the Other Guy Doesn’t Play Fair? • Turning bad conduct by your opponent into a positive Spoliation • Spoliation is the legal term used to describe the destruction or significant alteration of evidence, or the failure to preserve property for another’s use as evidence in pending or reasonably foreseeable litigation. • Serious sanctions are available if there is evidence that your opponent intentionally destroyed, or in bad faith allowed some one else to destroy evidence. 22 Spoliation Sanctions • Adverse Inferences • Fines and Substantial Costs Awards • Striking out an Expert Report • Summary Judgment / Claim Dismissed Privacy and E-Discovery Catherine Beagan Flood 23 Canadian Privacy Laws Federal private sector legislation - the Personal Information Protection and Electronic Documents Act (PIPEDA) Applies to every organization in respect of personal information that: • the organization collects, uses or discloses in the course of commercial activities; or • is about an employee of the organization and that the organization collects, uses or discloses in connection with the operation of a federal work, undertaking or business Canadian Privacy Laws Comparable comprehensive provincial private sector privacy legislation in: • Quebec • British Columbia • Alberta These provincial laws apply to employees in provincially regulated industries 24 Canadian Privacy Laws - Ontario • has health privacy legislation applicable to “health information custodians” (HICs) in both the private and public sectors, and others, such as employers, when they receive information from HICs has general public sector privacy legislation is otherwise governed by the federal PIPEDA has no legislation applicable to provincially-regulated employees – but collective agreements may provide privacy right unclear whether invasion of privacy is a tort • • • • Criminal Code – Interception of Private Communications Criminal Code, s. 184 prohibits interception of private communications • e-mail sent or received with a home computer is a private communication: R. v. Weir (1998, Alta. Q.B., aff’d 2001 Alta. C.A.) • e-mail sent or received with an employer’s computer is still a grey area 25 Criminal Code – Interception of Private Communications • As a result, employers should have a clear e-mail monitoring policy in place • If possible, the policy should be part of the terms and conditions of employment, and a signed acknowledgement consenting to the policy should be obtained • Such a policy assists an employer in arguing that: a) its employees had no reasonable expectation of privacy in respect of monitored communications; and b) they consented to the monitoring – an exception to the offence Employee E-mail Monitoring/Retention Policies The policy should specify, among other topics: • what is monitored and/or stored (including whether employees accessing personal e-mail accounts from the employer’s computer is monitored/stored) • the purposes for which monitoring/storage occurs • the purposes for which access may be given to third parties • the minimum and maximum retention periods and the destruction procedure 26 Employee E-mail Monitoring/Retention Policies The policy should also specify: • the purposes for which employees are permitted to use the employer’s computer • the consequences of breach of the policy The employer should be careful not to exceed the policy, and in particular not to collect, use or disclose personal information for purposes not identified in the policy (unless required by law), as it will then be acting without the employees’ consent PIPEDA – Reasonable Person Test • Note that even when consent has been obtained, s. 5(3) of PIPEDA provides, as an overriding obligation: “An organization may collect, use or disclose personal information only for purposes that a reasonable person would consider are appropriate in the circumstances.” • Accordingly, an employer subject to PIPEDA must ensure that its e-mail monitoring/retention policy is reasonable – even if it has obtained consent from all employees 27 PIPEDA and Litigation Inconsistent Caselaw Ferenczy v. MCI Medical Clinics (2004) (Ont. Sup. Ct.) – Justice Dawson stated in obiter that a doctor and a private investigator collecting PI on his behalf were not subject to PIPEDA, because the collection, use and disclosure of PI to defend a malpractice suit fell within the exception for “personal or domestic purposes” and was not commercial PIPEDA and Litigation Contrast: Privacy Commissioner of Canada (“PC’s”) PIPEDA Case Summary #340 (2006) Two law firms that had conducted credit checks for clients in relation to potential litigation or a potential counterclaim were found to have breached PIPEDA, as they had not obtained consent from the subject 28 PC Case Summary #340 (cont’d) Law firm argued the information was collected for personal purposes of a client in relation to potential litigation (like Ferenczy) PC held the collection occurred in the course of the law firm’s commercial activities - “there is no general exclusion for the activities of law firms undertaken on behalf of their clients” Discovery of Child Pornography • criminal charges of possession and distribution of child pornography were laid against a computer repair person in Edmonton who had delayed reporting a client’s possession and showed the materials to others to seek advice on what to do • New Jersey Appellate Division has held that an employer can be civilly liable 29 Discovery of Child Pornography • obtain immediate legal advice • preserve the evidence • do not distribute the materials to others, except legal counsel • unless the police demonstrate exigent circumstances, request that they serve a warrant before disclosing the materials to them – an Ontario Justice of the Peace recently held that PIPEDA did not give Bell a basis to disclose an Internet subscriber's name and address in response to a police “letter of request” in a child sexual exploitation investigation in the absence of a warrant Panel Discussion Joel Richler, Jill Lawrie and Kathryn Manning 30 Electronic Discovery: Understanding the Challenges November 23, 2006 31 TAB 2 GUH)ELINES FOR THE DISCOVERY OF ELECTRONIC DOCUMENTS IN ONTARIO A. Introduction: Purpose of E-Discovely Guidelines In its Report, the Task Force on the Discovery Process in Ontario recommended the development of a ’°best practices" manual to address the discovery of electronic documents. These Guidelines respond to that recommendation.-~ The preservation, retrieval, exchange and production of documents from electronic sources in electronic form are together referred to as "e-discovery." In these Guidelines, that term also includes the use of automated tools to produce documents in electronic form, whether they originate in hard copy or electronic sources. While documents f~om hard copy sources can be produced in electronic form, and paper copies of electronic documents can be printed out for production in litigation, these activities would not, in themselves, constitute "e-discovery" as the term is used, generally or in these Guidelines. The development of best practices for e-discovery is not unique to Ontario. A number of other organizations and jurisdietions have implemented or published similar guidelines that have been inslaaaetional in the development of these Gnidelines. These are referred to as appropriate inthe commentary. The premise of these Guidelines is that existing Rules already provide a legal foundation for the requirement that parties address issues relating to e-discovery, because the definition of"docunaent" in applicable civil Rules already includes "data and information in electronic form.’’~" However, those Rules and the case law to date provide little clear guidance to parties and their counsel on how to fulfill that requirement. The suggestions in these Guidelines have been developed to address this issue with respect to production of documents in civil litigation. E-discovery is already widely used as an integral part of the discovery process in complex cases and, increasingly, in many types of litigation that are less complex. In part, this is because of the inclusive definition of "document" referred to above. In addition, however, as the available technology matures, lawyers have begun to recognize its capacity, in some cases, to manage document production more efficiently, and to support the discovery process more effectively, than traditional paper-based methods permit. However, many lawyers have yet to fully recognize the impact of this technology on the discovery process. The overa~ orientation of the profession remains towards printed documents. This, combined with the absence of clear guidelines on the scope and manner of e-discovery, means that many lawyers remain unfamiliar with their clients’ obligations to preserve mad produce electronic documents, and with the technology available to retrieve, search and produce them in a cost-effective manner. Accordingly, Section C below sets out a number of principles that are intended to guide lawyers, clients and the judiciary in the e-discovery process. It is hoped that these Guidelines ~ provide an appropriate framework to address how to conduct e-discovery, based on norms that the bench and bar can adopt and develop over time as a matter ofpmetice. They are not intended to be enforceable directly, as are the Rules ~=The Discovery Task Force ~shes to thank the members of the e-Discovery Sub-Committee for their excellent work: Sam Blake, Peg Duncan, Martin Felsky, Michael Fraleigh, Derek Freeman, Karen Groulx~ Christopher Leafloor, Daniel Pinulngton, Mohan Sharma, Glenn A. Smith and Phil Tunley. 2 Rules of Civil Procedure, Rule 1.03 e-Discovery Guidelines -2of Civil Procedure, although they may support the enforcement of agreements between parties or provide the basis for court orders. Mandating how e-discovery is conducted through the enactment of detailed rules, at this stage, could be cotmterproductive, and risk imposing a "one-size fits all" approach that may not be appropriate in different types of litigation or responsive to new technologies as they emerge. It could also add unnecessary complexity to the Rules, and lead to more disputes and related motions. Rather, the objective of these Guidelines is to educate the legal profession, including the judiciary and the practicing bar, on issues relating to e-discovery and how those issues can be addressed in practice. They are intended to provide practical suggestions for the profession, both on how to fialf~ parties’ existing obligations respecting the preservation and production of relevant documents from electronic sources, and how to improve the cost effectiveness of the discovery process. They suggest how to reach early agreements in the e-discovery process, in order to minimize the potential for undue cost and delay. These Guidelines also include some suggestions to take advantage of electronic tools, in order to minimize unnecessary cost and delay. Despite the apparent complexity of some e-discovery issues, technology increasingly offers improved methods of retrieving, reviewing and producing documents electronically. In many circumstances, this can offer significant savings of cost and ~Lrne compared to paper-based methods. In order to serve as an educational guide for the profession, it may be necessary for some readers to review the basic concepts and terminology relating to e-discovery. For those readers, Section B following provides this review in a practical context. It outlines the stages in the process of discovery of electronic documents, and some key terminology and concepts that lawyers and judges need to master at each stage.3 Those readers who are already familiar with this terminology and the e-discovery process may prefer to go directly to Section C. B. Key Issues and Terminology in the E-Discoveg¢ Process At every stage of the e-discovery process, lawyers are asked to give advice to chents about issues that involve new concepts, and new terminology, that highlight key differences between the discovery of electronic documents and traditional paper-based files. At each stage, disputes may arise about those issues that require court resolution. As a result, to deal effectively and consistently with these issues, both lawyers and the judiciary need to become familiar with new concepts and related terminology in the area orediscovery. This section introduces some of the most important ones that arise at each stage of the e-discovery process. The stages of the e-discovery process do not themselves differ from those involved in traditional hard copy discovery. They are: (a) Co) (c) (d) LOCATION of potential document sources; PRESERVATION of potentially relevant materials; REVIEW of documents for relevance, privilege and other issues; and PRODUCTION to other parties, for use in court proceedings. 3 For a detailed glossary of frequently used terms, see The Sedona Conference® Glossary For E-Discovery And Digital Information Managemea~. A Project of The Sedona Conference® Working Group on Electronic Document Retention and Production (WG1) RFP+ Group May, 2005; available on The Sedona Conference website (~.thesedonaconference.org). e-Discovery Guidelines -3Only by understanding the new concepts and terminology that come into play at each of these stages in the case of e-discovery, can lawyers and judges make informed decisions, avoid potential disputes in this area, or resolve them in a manner consistent with the Rules. This includes when and why it may make sense to seek or order production of electronic documents, and how to do so in a manner that remains cost effective to the parties. (i) The Location of Electronic Documents Tlie first question that arises is what must be located, within the existing Rules definition of"data and information in electronic form"? Generally speaking, documents are referred to as "electronic" if they exist in a medium that can only be read through the use of computers, as distinct from documents that can be read without the aid of such devices. It is also generally accepted that this definition includes many familiar types of electronic "documents," such as e-mail, web pages, word processing files, and databases that are stored on computer.4 However, both the definition and case law suggest that a broader range of electronic "data and information" may also be covered in some cases. The limitations on what may be covered are not to be found so much in technical distinctions, as they are in the familiar criteria of relevance. The next obvious question is what computer systems the cheut has, or had at the relevant time, that may contain relevant data or information. Again, depending on the nature of the case, the answer may include enterprise systems or networks, as well as personal computers (desktops, laptops, and even hand-held devices), and even individual components and media relating to them, such as memory chips, magnetic disks (such as computer hard drives or floppy disks), optical disks (such as DVDs or CDs), m~d maguetic tapes. The variety of hardware and media involved can pose problems for lawyers, clients mad the courts. For example: some items may be in use by individual witnesses, others in storage in different areas or departments, and the documents may be in a wide variety of different electronic formats; copies of the same document may be stored in multiple locations in the course of normal operations: for example, an e-mail sent from one person to another on a networked system may be saved by each of the sender and recipient on their own computers, and flxrther copies retained by the system for a variety of purposes; o relevant electronic documents, even those created using systems that were once commonplace, may have become unreadable over time because of the unavailability or obsolescence of key software or hardware components; in some cases, the sheer volume of data can be enormous, both because of the expanding use of computer systems and their increasing storage capacity, and also because of the way they affect the behavior of people and organizations: for example, e-mail is not only replacing traditional paper-based communications such as letters and memoranda in many circumstances, it is also replacing many informal exchanges that in the past were not documented folly or at all, such as telephone calls and even casual conversations. 4 THE SEDONA PRINCIPLES: Best Practices Recorrunendations & Principles for Addressing Electronic Document Production. A Project of The Sedona Conference ® Working Group on Best Practices for Electronic Docmnent Retention & Production, published January 2004. e-Discovery Guidelines -4- These factors can all make the process of locating and assembling electronic documents for litigation purposes more difficult than for traditional paper-based materials. The involvement of clients’ IT staff is ot~en essential to ensure that the assembly process is complete and problem-free. In order to ensure the completeness of searches, lawyers also need to understand some of the different sources of docmments that may exist within a given organization’s computer systems, and their different purposes. Here, discussion with 1T staffor consultants is essential, and the use ofcorreet terminology can anticipate problems and avoid mistakes. For example, electronic documents familiar both in personal and business usage - such as word processing, spreadsheet, database and e-mail documents - may be found in several different electronic locations and formats. A complete search should consider the following possible SO’LlrCeS: "Active data" is data that is currently used by the parties in their day-to-day operations. This t3,pe of data is normally straightforward to identify and access using the current systems. However, because this data is in active use, significant issues may arise for lawyers and courts concerning the need to preserve the integrity of this data for litigation, to design and manage searches to avoid business disruption, and to separate relevant from irrelevant information. o "Archival data," on the other hand, is data organized and maintained for long-term storage and record keeping purposes. Some systems allow users to retrieve archival data directly, but others require special equipment or sofavare, and the involvement of IT staff.5 "Backup data" is similar to archival data, except that this term refers to m~ exact copy of system data, which serves as a source for recovery in the event of a system problem or disaster. Backup data is generally stored separately from active data, and is distinct from archival data both in fl~e method mad structure of storage that reflect its intended uses. It is generally not accessible to ordinary system users, and requires special (and sometimes expensive) intervention before it is "readable." Archival and backup data both constitute a set of electronic data and information collected for a particular purpose, and perhaps as at a moment in time. That purpose and timeframe may or may not be related to the litigation, and their relevance and completeness need to be assessed in that light. Lawyers and the judiciary should also be aware that certain electronic sources, such as interuet web-pages or database applications, may be under constant revision as new information is published on the site or added to the system. Unless these documents are located promptly, the available active copy may not reflect what the data actually looked like at the point in the past that is relevant to the litigation. Lawyers should be prepared to question their clients, to confirm which of the available versions are the best evidence for litigation purposes. The documents most commonly requested and produced in litigation are those created by word processors, databases, spreadsheets, e-mail, and other familiar programs. These documents are routinely used and exchanged in business and private dealings. As noted above, these documents are normally quite easy to identify mad locate. However, in discussions with IT staffinvolved, lawyers also need to be aware that many other, different kinds of "information and data" can exist in computer systems, in order to assess how and when they may be relevant. These may include less familiar kinds of documents, such as web-pages, browser history files that track a user’s movements between web-sites and pages on the internet, cell-phone s The Sedona Conference@ Glossary For E-Discover), And Digital Information Management. A Project of The Sedona Conference@ Working Group on Electronic Document Retention and Production (WG1) RFP+ Group May, 2005. e-Discovery Guidelines -5logs, and many other kinds of information stored on computer-based devices in their day-to-day operations. Most users may be completely unaware these documents even exist. In addition, there may be hidden data or information associated or related to electronic documents that should be considered, particularly if there are issues of authorship or authenticity raised with respect to a document. Case law suggests that any data or information that can be readily compiled into viewable form, whether presented on the screen or printed on paper, is potentially within the definition of "document" under Rule 30.01 of the Rules of Civil Procedure. Again, some understanding of the concepts, as well as the terminology involved, is essential. "Meta-data" refers to electronic information that is recorded by the system about a particular document, concerning its format, and how, when, and by whom it was created, saved, assessed, or modified. For example, most word processing sot’cware records who created or modified a document, as well as the dates and times of document revisions. Most e-marl sol,rare records the dates and times e-mails are created, sent, opened, and saved as well as the names of the originator and all recipients, inchiding those ’"olind copied." This information may not be seen by users or appear in a print-out of the document in the ordinary course of business. However, meta-data is generally readily available, and can be extracted in searchable or printable form if it is relevant to litigation. Meta-data may be relevant directly to the litigation or it may be relevant to the authenticity and admissibility in evidence of the electronic documents with which it is associated, where this is disputed. Accordingly, its importance should not be underestimated.6 "’Residual data" refers to any information that remains stored on a computer system aider a document has been deleted. The computer does not necessarily "wipe clean;’ the disk or memoW si~ace in which the file was stored, but merely ’kags" it ,as re-usable by the system. The "deleted" data may not become truly unavarlable until this space is re-used. Hence, deleted files or fragmcnts ofdclcted filcs arc oRcu retrievable for some petiod of time aRer "deletion." This can provide information about a document, and sometimes about changes made in successive revisions of a document, that would not otherwise be available. This kind of information is only recoverable using special "forensic" methods, and is unlikely’ to have significance in most litigation. ’~Replicant data" is created when a software program, such as a word processor, makes periodic backup files of an open file (e.g. at five minute intervals) to facilitate retrieval of the document where there is a computer malfunction. Each time the program creates a new back-up file, the previous back-up file is deleted, or tagged for reuse. Lawyers must understand the different kinds of electronic documents that may exist, and their characteristics, in order to assess whether and how they may be relevant, and where they may be found in a given case. Without some guidance from their lawyers on these issues, parties involved in litigation are unlikely to be able even to identify and locate the various electronic information and data that may have key relevance to their dispute. (ii) Preservation of Electronically Stored Documents A party’s duty to preserve electronically stored documents that are relevant to contemplated or threatened litigation arises inthe same way as for paper documents. 6 The Sedona Conference® Glossary For E-Discovery And Digital Information Management A Project of The Sedona Conference® Working Group on Electror~c Document Retention and Production (WG1) RFP+ Group May, 2005. e-Discovery Guidelines -6However, the discussion and terminology reviewed above highlights some special problems that can arise in the preservation of electronic documents, and also suggests how they can be addressed. Specific guidance is offered in Section C below, but the following are some examples of practical problems that arise from the lack of such understanding, and of the solutions that may often be available. Electronic documents or media containing them may be considered obsolete by the chant in terms of its current business systems, but may nevertheless be recoverable to a readable form by specialized forensic methods. The costs involved, at least for many of the most commonly used methods, have dechned to a point that may be cost effective in an increasing range of htigation. Relevant recta-data may exist atthe 0.me an electronic document or source is located, but may be altered or lost simply in the process of making a copy of the relevant electronic files for litigation purposes. This again is avoidable, as relatively affordable techniques exist, either to make "forensic copies" or "mirror images" that axe specifically designed to preserve the integrity of the meta-data, or to capture the relevant meta-data from the original source documents before they are copied. Preserving web-site files in electronic form, rather than simply printing them up at a point in time, may enable a party, at minimal cost, to recreate the website electronically in a courtroom, in order to demonstrate dynamically any relevant links, relationships, and special features that characterized the site atthe time the litigation arose. Formal document retention policies are a relatively recent development, and even today may not be standard except inthe very largest and most sophisticated organizations. Moreover, sound busincss reasons may exist for practices that result in flae destruction of relevm~t electronic documents: for example, routine deletion or omission to back-up e-mail to maintain storage space. For these reasons, early discussion with IT staff is often necessm3, to prevent contiuucd deletion after Ii~igation is threatened or commenced. These examples illustrate the point that, in order to understand how to comply with or enforce the obligation to preserve electronic data and information for litigation, parties, lawyers and the courts first need to understand the characteristics of electronic documents and the concepts and terminology of e-discovery discussed above. (iii) Electronic Document Review The preceding discussion of the ways electronic documents differ from paper also affects the approaches to the review of available electronic materials for litigation purposes. Review of electronic documents is essential, first, to separate relevant materials, which should be produced, from irrelevant material, wkich should not. Over-production of irrelevant electronic documents may be just as damaging to clients’ interests and the litigation process as incomplete production. However, the sheer volume and particular characteristics of electronic documents may be a significant barrier to effective review, for a number of reasons: Many institutions and businesses save a copy of their entire system onto back-up tapes periodically, and some retain them for long periods of time. Computer back-up tapes can store huge amounts of data, which may be organized for purposes of disaster recovery, rather than normal usage. It often needs to be converted backto readable form, before it can be searched or printed out to determine relevance. The e-Discovery Guidelines -7volume and organization of archive and backup data, and costs of conversion, can be significant barriers to production, especially as restoration may require processing a complete set of back-up tapes together. Depending upon the institution’s retention policies, the resulting set of documents (although complete and accurate for the purposes for which they were stored) may be incomplete or may not f-ally reflect the status of the same documents at the time relevant to the litigation. The document set may also contain multiple duplicates. Electronic documents are easily duplicated and, as noted above, copies of the same document may be stored in multiple locations in the course of normal operations. Consequently, although a user may have deleted his/her own copy, others persist in other locations, often without the user’s knowledge. Earlier versions (including drafts) or later versions may still be retained. Unless clearly marked - or better yet, unless the relevant recta-data has been preserved - it may be impossible to know which version is earlier or later, and which version is relevant to the timefi’ames and issues raised in the litigation. Since even meta-data could, in certain cases, contain or reveal privileged, secret, or other sensitive information, an organization may determine that it too must be separately reviewed before the documents are produced. Once the files are collected in readable form, manually searching for and retrieving specific files may be cmnbersome, time-consuming and prohibitively ex~ensive. Depending on the documents ~d tbe technology used, however, automated search tools may offer solutions. E-discovery has been greatly facilitated by new technologies flaat permit some kinds of electronically created documents to be converted from one digital form into reindeer, in large volumes, often at minimal cost. This means that in some ca~es the practicing lawyer and client may no longer face prohibitive cost and technology barriers to the review and searching of electronic documents, particularly with respect to many common forms of electronic documents, such as e-mail. In some cases, however, even the available electronic tools may not permit complete review for production in litigation on a cost-effective or timely basis. Lawyers and the judiciary in such cases need to seek agreements, or arrive at terms for court orders, that target the most relevant data and information. (iv) Production of Documents in Electronic Form The question lawyers are increasingly asked to advise on (and courts may be asked to adjudicate) is whether parties may simply print out electronic data such as e-mails, or whether they are obliged to produce them to the opposing party in electronic form. The answer in any given case may involve a balance of competing considerations.7 In order to maxSmize the benefits of e-discovery, the courts and the profession need to gain experience with respect to such issues as: what circumstances call for electronic production as opposed to paper production; 7 For example, many electronic documents involve mere than mere printable text- In a database application, nidividual pieces of information may be meaningless, unless they are produced within their context or enviranman~, and the ability to m~ipalate relevant information using the original software application in which it was created may bring added benefits. However, a database may often contain irrelevanL confidential, and even privileged information, together with the relevant information, orthe softx~re application may not be available commercially, or at all, to third parties. In such cases, standard or custom "reports" displaying the relevant information with the context in a readable form might be generated, v~thant producing the entire system, and may be sufficient. e-Discovery Guidelines -8how the cost of production should be fairly allocated; how to ensure that electronically produced docttments are compatible with courtroom technology to facihtate production at trial; how to provide for the redaction ofptivileged and irrelevant material in electronic form; and how to ensure appropriate retention of electronic records. These issues are very much affected by the availability of new technology, and its increasing use by lawyers and courts. Most litigation support software provides for exporting production sets in formats that allow them to be imported by a recipient paxty into the litigation support tool of their choice. Many of these tools are designed to produce properly redacted versions of documents8, to permit the creation of special fields for production of relevant meta-data, and to allow the user to select which fields will be exported. Similarly, large volumes of hard copy documents can be scanned as image files, and exchanged on CDs or via web-based sot’re, are, often at less cost than would be involved in producing a similar number of photocopy sets. This is especially important in mnlti-party litigation, and where parties have the opportunity to share the costs of scanning. With the assistance of available sofa,are tools, electranically scanned documents can be much easier and more efficient to store, organize, manage and search° than equivalent volumes of paper documents. These developments are rapidly reducing cost and technological barriers to high-volume document cases, even where the client’s source documents exist in paper form. However, the use of these new tools and methods is still limited, and sometimes inconsistent, among lawyers and the judiciary. These Guidelines are intended to promote the efficient use of technology in the discovery process. The control of escalating costs, together with increased effectiveness for lawyers and parties advancing their case through the discovery process, is an important part of the rationale behind these Guidelines. Principles that should Guide the E-Discovely Process (i) Discovery of Electronic Documents ("E-Discovery") Electronic documents containing relevant data and information are discoverablepursuant to Rule 30. As soon as litigation is contemplated or threatened,, it is essential for parties and their counsel to go beyond paper file searching, and consider what electronic data and information exists that they may need to produce. Parties must take reasonable steps to locate and preserve electronic documents containing data and information that can reasonably be expected to be relevant to litigation. Further, parties should consider what relevant electronic documents other parties may have, that they may want to request be preserved for production in the course of the litigation. The obligations of theparties witk respect to e-discovery are subject to balancing, and may vary ~vith (i) the cost, burden and delay that may be imposed on parties; (ii) the nature and scope of the litigation, the importance of the issues, and the amounts at stake; and (iii) the Principle 1: Commentary: Principle 2: ~ Counsel using such tools should ensure tlmt redactions are permanently embedded in the production copy of the document, and caunot be electronically "undone". Counsel should also ensure that, ffa fall-text or OCR version of/he documents is also be’rag produced, this version, as well as the image, should be redacted. e-Discovery Guidelines -9relevance of the available electronic documents, and their importance to the court’s adjudication in a given cask This principle is consistent with Rule 1.04(1), and the objective of securing the just, most expeditious, and least expensive disposition of litigation on its merits. Even where there has been complete production in paper form, electronic versions of the same documents may contain relevant meta-data that may not appear in a printout or scanned version of the document. Meta-data may be directly relevant in the litigation, or it may be relevant where there is an issue as to the authorship or authenticity of a document. In such situations, it may also be necessary to produce the relevant meta-data in some form. Parties should consider whether it may be preferable to produce the entire document, including the meta-data, in electronic form.9 The questions to be considered in determining whether to require file use of forensic techniques to recover back-up or obsolete sources include not o~fly the costs involved, and the potential amount, usability, reliability and relevance of the information to be obtained, but also: whether the party believes that the materials available from active electronic and paper sources are reasonably complete; whether the party has rules for printing up or retaining important documents in electronic form, and whether they are monitored for compliance; and the availability and completeness of the back-up or obsolete sources. Parties should use the most cost-effective methods to locate, preserve, review and produce electronic documents. Electronic documents may be easier to search than printed or scanned copies, and therefore more effective in litigation,, and production of documents in electronic form may be more cost-effective than print production. The costs to be considered may, where appropriate, include the costs of counsel and any necessary consultants, hardware, software or other facilities or services required (i) to recover or make electronic documents available in a readable form; (ii) to search documents in various formats to identify relevant material, and separate irrelevant material; (iii) to review the relevant documents for privilege; (iv) to produce the documents to other parties; 9 An example of a case where resort to back-up tapes was ordered by the court is in the U.S. decision of Zub ulake v. UBS IFarburg LLC, 2003 W.L. 21087884 (S.D.N.Y. May 13, 2003), an action claiming gender discrimination and illegal retaliation, where a request for an order compelling UBS to produce various e-mails now exqsting only on backup tapes and other archived media was before the court. Despite the fact that UBS had already produced approxSrnately 100 pages of e-mails, Zubulake believed it had more based on the fact that she herself had produced appre~dmately 450 pages of e-mails. The court determined that LrBs should provide tangible evidence of what the backup tapes might have to offer in the from of a sample. UBS was therefore ordered to produce responsive e-mails from any five back-up tapes selected by the plaintiff. UBS was also required to prepare an affidavit detailing the results of its search, as well as the time and money spent. Following the production of relevant e-mails taken from the sample back-up tapes, UBS was ordered to restore its back-up tapes and produce responsive e-mails from these tapes. The case suggests that. where a party on proper evidence convinces a court that documents have not been produced and that such documents are likely stored on a computer hard drive or other electronic storage medium, such as back-up tapes, but the party in possession of the computer asserts it has printed or produced all that it has, then the only solution would be to allow inspection of the storage medium itself or restoration of the documents from back-up tapes. e-Discovery Guidelines -10and (v) to enter them in evidence through discovery or at trial. Consideration of the burden and delay involved should also include the likelihood of disputes at any stage of the process. Consideration of the relevance and importance of the available electronic documents should include their admissibility and mode of proof as evidence. Principle 3: In most cases, the primary source of electronic documents should be the parties’ active data, and any other information that was stored it~ a manuer that anticipated future business use, and that still permits efficient searching and retrieval The scope of the searches required for relevant electronic data and documents must be reasonable. It is neither reasonable nor feasible to require that litigants immediately or always canvass all potential sources of electrouic documents in the course of locating, preserving° and producing them in the discovery process]° Some sources may contain largely duplicate documents or redundant information and data. Others may contain few if any relevant documents, together with massive amounts of data and information that is not relevant to the litigation. This principle is based on the premise that, for most litigation, the most relevant data and information will be that which is available to or viewed by the computer users, and that which is exchanged between parties, in the ordinary course of business. This is normally the active data, but the principle also includes archival data that is still readily accessible and not obsolete. Litigants must exercise jud~mnent, based on reasonable inquiry in good faith, to identify such active and current archival data locations that may be subject to e-disenver3,. HoweveL ira party is aware (or reasonably should be aware) that specific, relevm~t data or information can only be obtained from a source other than the active and current archival data sources, then that source should at least be preserved and listed appropriately in the party’s Affidavit or documents for possible production, absent agreement of the parties or order of the Court. Principle 4: A respondingparty should not be required to search for, re~ie~v orproduce documents that are deleted or hidden, or residual data such as fragmented or overwritten files, absent agreement or a court order based on demonstrated need and relevanc~ Unless residual or replicant data, or other material that is not accessible except through forensic means, is known or should reasonably be known to be available and relevant, it need not be preserved or produced. If such data is considered relevant, parties should request its preservation as early as possible, in order to avoid inadvertent deletion or claims of deliberate destruction. Commentary: ~o In Dulong v. Consumer Packaging Inc., (2000) O.J. 161 (Q.L.), (January 21, 2000, Ontario Master), the court held that a bread request that the corporate defendant search its entire computer system for e-mail relating to matters in issue In the litigation was properly refused on the grounds that such an undertaking would, "having regard to the extent of the defendant’s business operations, be such a massive undertaking as to be oppressive". e-Discovery Guidelines -11- (ii) Preservation of Electronic Documents As soon as litigation is conten~lated or threatened, parties should immediately take reasonable and good faith steps to preserve relevant electronic documents. However, it is unreasonable to expect parties to take every conceivable step to preserve all documents that may be potentially relevant. The obligation to preserve relevant electronic documents applies to both parties. Counsel should advise clients with respect to this obligation at the earliest possible time, including the steps that may be prudent or required to implement a "litigation hold". These may, in appropriate cases, include steps to: collect all relevant document retention, back-up, archiving, and destruction policies; issue appropriate instructions to all staff, or at least to relevant staff, to cease or suspend personal activities and practices that could result in the destruction or modification of relevant electronic documents, such as the deletion of emailbox entries or archives; (iii) create litigation copies of potentially relevant active data sources, for example by means of electronic backup or forensic copying of the documents, so as to preserve potentially relevant meta-data; and cease or suspend the over~fing of back-up tapes, and other document retention practices that could result in the destruction or modification of relevunt electronic documents in the ordinary course of business. Principle 5: Commentary: (iv) Where applicable, electronic document retention policies should be shared so that both parties are aware of what electronic documents may exist mad what may no longer be accessible. This may include disclosing the procedure and cycle for electronic backup for each system and/or any procedure for archiving electronic documents. Parties should also consider sharing any available lists of electronic records stored off-site or off-system. Sharing this information will assist both parties in identifying the documents that need to be preserved for litigation, and the steps required to do so. Principle 6: Parties shouldplace each other on notice with respect to preserving electronic documents as early in the process as possible, as electronic documents may be lost in the ordinary course of business. Where parties or counsel anticipate that specific electronic documents do or may exist that are relevant to litigation and that are liable to be deleted or modified in the ordinary course of business, they should immediately notify the client or opposing party of that fact, and request that appropriate steps be taken to preserve the documents. Counsel should also consider, as early as possible, whether third parties may be in possession of relevant electronic data, and the steps required for its preservation. Commentary: e-Discovery Guidelines - 12- Principle 7: Commentary: Parties should discuss the need to preserve or produce meta-data as early as possibl~ If a party considers meta-data relevant, it should notify the other party immediately. Depending on the circumstances of the case, particular meta-data may be critical or it may be completely irrelevant. The relevance ofmeta-data warrants particular consideration, however, because (i) it is readily alterable, either intentionally or inadvertently, for example if non-forensic "copies" of electronic documents are made for litigation purposes; (ii) it may be relevant either directly, to an issue in the litigation, or to any dispute about the authenticity, admissibility and proof of relevant electronic documents with which it is associated; and (ni) sometimes, meta-data can lead to inaccurate conclusions, for example, in a situation where a document is created from a standard "form" which identifies the "author" who created the form, but not the person who drained the actual or ultimate document produced from it. The meta-data associated with e-mall documents is relevant, and even necessary to list the documents accurately in an Affidavit of Documents. Parties should ordinarily expect that this type of meta-data be preserved and produced in litigation. For many other types of meta-data, however, this kind of data is technical in nature, and forensic techniques are required for its extraction. The relevance of this type ofmeta-data is usually confined to particular kinds of Iitigation, or particular documents: for example, the history of prior revisions to documents may be broadly relevant in a fraud case, or in the case of a particular contract or other document in issue. It is seldom if ever required for routine correspondence to prove any point in contention. In general, it is only where the producing party ka~ows or should reasonably know that particular meta-data is relevant to the dispute, that it should be preserved. However, litigants need to scrutinize claims and defences before determining how to handle meta-data. Organizations should not automatically discount the potential banefrts of retaining meta-data to ensure the documents are authentic and to preclude the fraudulent creation of evidence. Parties and their counsel should consider at the outset of litigation the need to preserve and produce meta-data, and be prepared to discuss this with opposing parties and counsel. (iii) Pre-Discovery Discussions between Counsel: Defining the Scope of E-Discovery Obligations Counsel should meet attd confer, as soon as practicable attd on an ongoing basis, regarding the location, preservation, review and production of electronic documents, and should seek to agree on the scope of each party’s rights attd obligations n,ith respect to e-discovery, and a process for dealing with thett~ Principle 8: u Notwithstanding this, the rantins preservation of mela-data may be beneficial in a number of ways. First, it avoids any risk of allegations of inadvertent or del~erate modification of evidence. Second, simply preserving documents in their native electronic format usually preserves the associated meta-dala, without incurring any additional steps or costs. Third, the failure to preserve and produce raeladala may deprive the producing party of the oppommity to later prove or contest the authenticity of the document, if the mela-data would be material to that determination. Finally, systematic removal or deletion of some meta-data may involve significant additional costs that are not justified by any tangible benefit, while the cost of preserving it in many cases may be practically nil. e-Discovery Guidelines -I3Commentary: By early discussion of e-discovery issues, litigants can identify and attempt to resolve disputes before they create collateral litigation. The issues commonly requiring early discussion include (i) the relevant time period, (ii) the identity of individuals likely to have created or received relevant electronic documents in the period; (’fii) which computer systems or media existed and are available relating to that period, (iv) which electronic documents can and should be preserved; (v) which electronic documents can be made accessible and searched on a cost effective basis; (vi) what searches should be conducted to identify relevant materials, including the "key words" to be used to perform these searches; and (vii) in what form should the relevant materials be produced. Particular cases may, however, raise additional or different issues. Creating checklists of the key issues to consider during an e-discovery conference can guide the parties and minimize the likelihood of disputes or inadvertent alteration or destruction of electrouic documents. Counsel should also be prepared to discuss e-discovery issues with the court at an early stage, whenever case management or other rifles provide an opportunity to do so before disputes arise. Parties will benefit if counsel are able to agree on an e-discovery plan. Since electronic documents are not tangible, there are options for delivering the data. These will need to be discussed by the parties and possibly the court. Counsel need to decide how electronic documents should be produced, and reach agreements as to format, document numbering and other important housekeeping issues. Connsel may also wish to address substantive issues of admissibility, proof, redaction and the removal of pri~dleged material. The requesting party should prepare a detailed specification of what information is being sought, from what sources: and how the information should be formatted and delivered. Where "native format" information is being sought, the requesting party should identify the properties that must be preserved. To reduce the possibility of miscommunication, counsel may want to exchange sample data, or exchange limited amounts of data, to assure that both patties are receiving what they anticipated before the costs of full production are incurred. The producing party should be in a position to produce an affidavit or other documentation detailing the data acquisition process and describing the pre-productiun processing of the data. For example, a party may decide to pre-screen e-mail to remove information that is personal, non-responsive, or duplicative. Although such a process can be entirely appropriate, requesting parties need to know what standards were used for the pre-screening process. For example, are identical e-mails delivered to different mailboxes considered duplicates?~: Parties and counsel should also provide early notice of any problems reasonably anticipated to arise in connection with their respective rights and obligations, or the process relating to e-discovery. This should include (i) the identification of potentially relevant data that is likely to be destroyed or altered in the normal course of operations or pursuant to the party’s document retention policy, (ii) any limitatiuns on the search efforts they propose to undertake, (’fii) any requests from the opposing party or counsel they consider to be burdensome, oppressive, or unreasonably expeusive, and (iv) their position with respect to any proposed change to the normal allocation of costs. 12 "A Practical Guide to Electronic Discovery in Construction Disputes", Howard W. Ashcraft, Jr., Hanson, Bridget~ Marcus, Vl~os & Rudy, San Francisco, U.S.!~ e-Discovery Guidelines - 14Relevant electronic documents or sources that are known to be no longer available should be listed in Schedule C to the party’s Affidavit of Documents. Principle 9: The scope of e-discovery should be defined by parties and their counsel before commencing oral examinations for discovery. This can best be achieved if parties’ requests for preservation of electronic documents, attd pre-disco~ery meetings benveen counsel, are as specific as possible bt identifying what is requested, ~vhat is being produced, and ~vhat is not behtg produced, and the reasons for any refusals. Unnecessary controversy over peripheral discovery issues can often be avoided at the outset by discussion between the parties regarding the potential scope and related costs of preserving and produc’mg relevant electronic documents. In mmly United States jurisdictions, issues relating to the scope of e-~scovery are managed through a process of w-fitten requests for productiun, oaad responses, before pre-trial examinations commence. This has many benefits, and can avoid many problems, if the requests and responses are sufficiently detailed mad specific. These stone benefits canbe obtained within Ontario practice, if the issues are addressed in similar detail through early requests for preservation of electronic documents, and pre-discovery discussions between counsel, before commencing oral examination for discovery. These requests and discussions should avoid boilerplate approaches, which often seek all email., databases, word processing fries, or whatever other electronic documents the requesting party can describe by category. Instead, counsel should target particular electronic sources, documents or timeframes that they contend are traly importmat to resolve the case. By identifying particular relevant electronic docunaents, and understanding when and why printed or scanned versions are inadequate in the particular case, parties can avoid the sort of blanket, burdensome requests for electronic documents that invite blanket objections and judicial intervention. Parties should also identify the form in which they wish electronic documents to be produced. Parties should generally not require production of hardware media such as computer hard drives. These are media on which data is stored, and may be thought of as an electronic f-cling cabinet. However, in exceptional circumstances, parties may need to inspect hardware media. For example, where a party has reasonable grounds to believe that documents (or meta-data associated with documents) have not been produced, and are likely still stored on a computer hard drive or other electronic storage medium, but this is disputed, then the only solution may be inspection of the storage medium itself, with proper safeguards.13 Commentary: Principle 10: A party may satisfy its obligation to produce relevant electronic documents in good faitk by using electronic tools and processes, such as data sampling, searcking, or tit e use of selectlon criteria, to identify the documents that are most likely to contain relevant data or informatior~ ~3 This type of relief, if opposed and not consented to, is normally available only by order under s. 101 of the Courts of Justice Act, as a form of injunction akin to an Antun P’~ar order. e-Discovery Guidelines -15Commentary: Particularly where searches for relevant electronic documents must be undertaken on large computer systems, containing vast amounts of information, including materials that are likely to be irrelevant, it may be impractical or prohibitively expensive to review all that information for relevance and privilege. In such circumstances, it is reasonable for parties to use electronic techniques to search within electronic document sources, in collecting the materials that will be subject to detailed review for relevance and privilege. The objective should be to identify a subset or subsets of the available electronic documents for detailed review, that are most likely to be relevant. Where possible, parties and counsel should agree in advance on the search methods, and selection criteria or search terms, that will be used. Absent such agreement, however, parties should record and be prepared to disclose any limits on the searches they have undertaken, and to outline the scope of what they are producing, and what potential sources or documents have not been searched. (iv) Production of Electronic Documents Principle 11: Parties should agree earl), itz the litigation process on the format it~ which electronic documents *vill be produced. Such documents may be producible in electronic form ~vhere this would (0 provide more complete relevant information, (ii) facilitate access to the hzformation h~ the document, by means of electronic techniques to revimt,, search, or otherwise use the documents h~ the litigation process, (gii) mh*hnize the costs to the producing parO,, or (~v) preserve the h~tegrity and security of the data. Parties must produce a document in electronic form if, for any reason related to the litigation, it is not sufficient to produce a printout or scanned version of the document. Parties and th(lr counsel should consider agreeing to the production of documents electronically, rather than in print, where this can result in savings in costs to the parties. Production of voluminous documentation in a form that does not provide meaningful access should be avoided. Electronic documents should not be converted to another form for production purposes, including creating printouts or scanned versions, if this has the effect of denying meaningful access to those documents. Where one party has documents in a searchable form, such as an electronic database, the searchable format should ordinarily be produced to other parties where possible. However, the use of printouts or reports may be justified in the case of documents containing both relevant and irrelevant information, if the relevant information cannot be segregated in a searchable format. In cases involving voluminous documentation, where digitizing documents may be appropriate or where documents need to be organized in a common, indexed fashion, parties should attempt to agree upon a protocol to address these issues, and for the sharing of the costs involved. However, the format in which this is done should be carefully controlled to avoid loss of privilege or the production of irrelevant materials. As noted, most litigation support software provides for exporting production sets, in formats that allow them to be imported by a recipient party into the litigation support tool of their choice, and many of these tools are designed to enable counsel to produce only the relevant fields, together with properly redacted images of the documents. e-Discovery Guidelines -16- (v) Privilege Principle 12: tPhere appropriate during the discovery process, parties should agree to measures to protect privileges and other objections to production of electronic documents. Commentary: E-discovery does, in some circumstances, involve a heightened or special risk of inadvertent or unintended disclosure of privileged information. Examples cited in the literature and anecdotally include: production of large volumes of electronic documents, for electronic searching, such as a computer hard-drive or back-up tape; and an Anton Pillar injunction, search warrant, or other order for immediate production of documents to an adverse party, without prior review for privilege. Again, however, as these examples suggest, the problems of inadvertent or unintended disclosure of privileged information are not necessarily different in kind for e-discovery as opposed to production of hard copies. Rather, the risk of occurrence may be greater in an ediscovery context, simply due to the volume of information involved, or to the difficulty and potential delay in identifying the privileged subject matter (where for example it takes the form of privileged meta-data or attachments associated with an otherwise non-privileged document.) That increased risk is significant, because the consequences of inadvertent or unintended disclosure are serious, potentially for both parties, including disqualification of counsel. Counsel should discuss how to protect privileged documents at the outset of litigation. Counsel should also recognize that, given a large volume of electronic documents, review for privilege will take time. Counsel should agree on measures to prioritize review, and streamline production of non-privileged material, without loss of privilege. Special issues may arise with any request to inspect hardware media such as computer hard drives. Parties should consider how to guard against any release of proprietary, confidential information and protected personal data if such media are to be inspected. (vi) Costs Principle 13: bl general, consistent with the rules regarding production of paper documents, pending any final disposition of the proceeding, the interim costs of preservation, retrieval, review, and production of electronic documents will be borne by thepartyproducing then~ The other party will, similarly, be required to incur the cost of makb~g a copy, for its mvn use, of the resulting productions However, in special circumstances, it may be appropriate for the parties to arrive at a different allocation of costs on an interim basis, by agreement or court order. Commentary: In Ontario, the traditional presumption is that the producing party is responsible for its own costs of meeting its obligations in the discovery process. However, once the documents are e-Discovery Guidelines -17ready to be produced, the opposing party is responsible for the immediate costs of the production of documents to them, such as copying, binding and delivery costs. Any other cost-shifting occurs at the end of the litigation, at which time the unsuccessful party may be required to contribute, in whole or in part, towards the costs (fees and disbursements) of the successful party. In the United States, to the contrary, the litigation process usually does not involve cost-shifting atthe end of the litigation, and places more emphasis on interlocutory cost-shifrng. Hence, case law and commentary dealing with costs inthosejurisdictions should be applied with caution, if at all, in Ontario. E-discovery may involve significant internal client costs, as well as counsel fees and disbursements for out-sourced services, at both the stage of locating and reviewing electronic documents and at the production stage. As such, there may be a need for the costs rules to be clarified so that internal discovery costs may be regarded as a recoverable disbursement in appropriate cases. As the e-discovery costs borne initially by producing panics may be significant, such panics may wishto adopt strategies so as to control the costs of e-discovery. For example, a producing party may wish to limit, either through negotiation, appropriate admissions, or motions, the extent and scope of their e-discovery obligations. They may also wish to consider whether the costs should be partially or completely shifted to the requesting party. As well, a producing party may wish to serve on the requesting party a Rule 49 Offer to Settle.. or to seek security for costs, to enhance its chances of recovery if it is ultimately successful in the proceeding. However, given the potential for interim costs awards in an e-discovery context, the parties seeking production of electronic documents should also carefully consider the costimplications of these claims. At a minimum, if they are ultimately unsuccessful, these parties may then be responsible for a significant portion of these e-discovery costs. Conclusion: The Need for Ongoing Refinement of these Guidelines As noted in the introduction, it is intended that these Guidelines will be developed over time as technology develops, and as the bench and bar gain ex-perience with e-discovery in practice. It is expected that refinements to the Guidelines together with reference material will be available through the interact in due course. This process of developmant will be ongoing. Members of the bar and interested groups are expected to take a leadership role. Input from practice groups involved in personal injury, commercial, intellectual property and other specialized types of litigation, will be particularly important. The judiciary is also encouraged to participate, for example, by providing additional sample orders and agreements that would not otherwise be widely reported or available, to illustrate and flesh out specific issues and practices. e-Discovery Guidelines -18- APPENDIX A Sedona Principles for Electronic Discovery Electronic data and documents are potentially discoverable under Fed. R. Cir. P. 34 or its state law equivalents. Organizations must properly preserve electronic data and documents that can reasonably be anticipated to be relevant to litigation. When balancing the cost, burden and need for electronic data and documents, courts and parties should apply the balancing standard embodied in Fed. R. Cir. P. 26(b)(2) and its state-law equivalents, which require considering the technological feasibility and realistic costs of preserving, re,eying, producing and reviewing electronic data, as well as the nature of the litigation and the amount in controversy. Parties should confer early in discovery regarding the preservation and production of electronic data and documents when these matters we at issue in the litigation: and seek ~o agree on the scope of each party’s rights and responsibilities. Discovery requests should make as clear as possible what electronic documents and data are being asked for, while responses and objections to discovery should disclose the scope and limits of what is being produced. The obligation to preserve electronic data and documents requires reasonable and good-faith efforts to retain information that may be relevant to pending or threatened litigation. However, it is unreasonable to expect parties to take every conceivable step to preserve all potentially relevant data. Responding parties are best situated to evaluate the procedures, methodologies and technologies appropriate for preserving and producing their own electronic data and documents. The requesting party has the burden on a motion to compel to show that the responding party’s steps to preserve and produce relevant electronic data and documents were inadequate. The primary source of electronic data and documents for production should be active data and information purposely stored in a mariner that anticipates future business use and permits efficient searching and retrieval. Resort to disaster recovery backup tapes and other sources of data and documents requires the requesting party to demonstrate need and relevance that outweigh the cost, burden and disruption of retrieving and processing the data from such sources. Absent a showing of special need and relevance, a responding party should not be required to preserve, review or produce deleted, shadowed, fragmented or residual data or documents. 10. 11. A responding party should follow reasonable procedures to protect privileges and objections to production of electronic data and documents. A responding party may satisfy its good-faith obligation to preserve and produce potentially responsive electronic data and documents by using electronic tools and processes, such as data sampling, searching or the use of selection criteria, to identify data most likely to contain responsive information. Unless it is material to resolving the dispute, there is no obligation to preserve and produce metadata absent agreement offue parties or order &the court. 12. e-Discovery Guidelines -19- 13. Absent a specific objection, agreement of the parties or order of the court, the reasonable costs of retrieving and reviewing electronic information for production should be borne by the responding party, unless the information sought is not reasonably available to the responding party in the ordinary course of business. If the data or formatting of the information sought is not reasonably available to the responding party in the ordinate course of business, then, absent special circumstances, the costs of retriev;mg and reviewing such electronic information should be shifted to the requesting party. Sanctions, including spoliation findings, should only be considered by the court if, upon a showing of a clear duty to preserve, the court finds that there was an intentional or reckless failure to preserve and produce relevant electronic data and that there is a reasonable probability that the loss of the evidence has materially prejudiced the adverse party. 14. e-Discovery Guidelines TAB 3 E-DISCOVERY IN ONTARIO: THE GUIDELINES AND THE CHALLENGES Kathryn J. Manning Litigation Associate Blake, Cassels & Graydon LLP 416.863.3852 kathryn.manning@blakes.com 1234 E-Discovery in Ontario – The Guidelines and the Challenges Kathryn J. Manning INTRODUCTION The discovery of documents is a routine part of civil litigation that is often a timeconsuming and expensive task for litigants. With the advent of computer technology and the growth of the use of electronic documents in business, documentary discovery has become even more of a challenge. Last year, a sub-committee of the Ontario Bar Association’s Discovery Task Force drafted guidelines for “e-discovery” to assist litigants, lawyers and the judiciary to address the unique issues raised in the discovery of electronic documents. This paper will provide an overview of the guidelines and highlight some of the issues that have recently been considered by the Ontario courts in dealing with e-discovery. 1. Background to the E-Discovery Guidelines In November 2003, the Discovery Task Force issued a report in which it outlined guidelines or “best practices” for the discovery process in Ontario. The Task Force wanted these guidelines to be understood before any potential rule changes were made to implement the guidelines. The best practices were intended to complement, not supplement, the discovery rules in the Rules of Civil Procedure. The report also reflects the reality of discovery in our technological era and acknowledges how the everincreasing use of technology can significantly increase the volume of documentary production. Accordingly, one key principle the Discovery Task Force advocated was that relevance for the purposes of disclosure and production should take into account necessity, cost and timeliness. This principle is particularly applicable to discovery involving electronic documents, given their oftentimes large volume. 1234 -2- In 2004, a sub-committee of the Discovery Task Force was formed to deal with the particular issue of e-discovery. The E-Discovery Sub-Committee was chaired by the Honourable Mr. Justice Colin Campbell. It issued its first draft of Guidelines for the Discovery of Electronic Documents (the “Guidelines”) in Ontario in the fall of 2005. The Guidelines respond to the recommendation in the Report of the Task Force on the Discovery Process in Ontario that a “best practices” manual be developed to address the discovery of electronic documents. 2. What are “e-documents”? Because “document” is broadly defined in our Rules of Civil Procedure and includes “data and information in electronic form,” e-documents can take a number of different forms, including: (a) (b) (c) word processing files; e-mails and web pages; information stored in any number of electronic devices such as cellular phones, Blackberries, Personal Assistants (“PDAs”), voicemail systems, and fax machines; and (d) information stored on a wide variety of media such as: computer drives, floppy disks, CDs, DVDs or zip drives. The breadth of what may be included in the definition of “document” means that parties’ production obligations in litigation have the potential to be extremely onerous because parties have to search for, retrieve and review large volumes of information in a variety of forms. Electronic documents therefore raise a host of unique issues not the least of which is the ease with which they can be copied, transferred and forwarded, often ultimately creating numerous “copies” of the same document. Businesses will also have 1234 -3- numerous locations where e-documents can be stored including on multiple network or laptop computers, servers, and countless back-up tapes. Another unique issue with edocuments is their greater permanency as compared to hard copies of documents. “Deleting” a document on a computer most often does not permanently erase it. Even if you empty the Recycle Bin after deleting, the actual data that comprises the document remains on the hard drive and what is known as “residual data” is invisible to the user but can be located by IT personnel. The E-Discovery Guidelines attempt to address these issues as well as others that arise during the discovery of electronic documents. It is important for clients and their counsel to understand the Guidelines so that they can address issues that arise during the course of litigation and also as part of their document retention and management policies. While the Guidelines themselves have only been referred to in a few Ontario cases1 so far, a number of cases have considered issues arising in the context of electronic discovery. These cases will be discussed below in the context of the applicable principles in the Guidelines. 3. The Guidelines (i) Overview Section A of the Guidelines is an introduction to the purposes of the E-discovery Guidelines, including the definition of “e-discovery” itself. The Guidelines define “ediscovery” as the “preservation, retrieval, exchange and production of documents from electronic sources in electronic form.” The term “e-discovery” is also used to include the use of automated tools to produce documents in electronic form. The Guidelines make a distinction between what they define as e-discovery and the processes whereby 1 Sycor Technology Inc. v. Kiaer, [2005] O.J. No. 5395 (Master) [Sycor]; Air Canada v. Westjet Airlines Ltd., [2006] O.J. No. 1798, 81 O.R. (3d) 48; JDS Uniphase Inc. v. Metconnex Canada Inc., [2006] O.J. No. 4148 (Master). 1234 -4- documents from hard copy sources are produced in electronic form or paper copies of electronic documents are printed out for production in litigation, neither of which constitute e-discovery under the Guidelines. The objective of the Guidelines is to educate the bench and bar on issues regarding ediscovery and how those issues can be addressed in practice. The Guidelines are practical and strongly advocate cooperation among opposing counsel and parties in order to streamline the e-discovery process and to focus on what is truly relevant and necessary. At this point in time, the Guidelines remain just that and they have not been formalized into Rules the Ontario Rules of Civil Procedure. As noted above, the Rules of Civil Procedure already explicitly include electronic documents in the scope of discovery under Rule 30.01(1) which provides that “a document” includes “data and information in electronic form.”2 In addition, Rule 1.03 provides that “document” includes data and information in electronic form and goes on to define “electronic” very broadly as including 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 needs”.3 (ii) Key Issues and Terminology Section B of the Guidelines is an overview of the key issues and terminology unique to the e-discovery process. The Guidelines point out that the stages of the e-discovery process do not themselves differ from those involved in discovery of traditional hard copy documents. Those steps are: (a) location of potential document sources; 2 3 Rules of Civil Procedure, Rule 30.01(1)(a) Rules of Civil Procedure, Rule 1.03 1234 -5- (b) (c) (d) preservation of potentially relevant materials; review of documents for relevance, privilege and other issues; and production to other parties for use in court proceedings. However, when these steps involve electronic documents, there are some unique and challenging issues that the parties need to address. (a) Locating e-documents When dealing with electronic documents, the first issue to be addressed is what to locate. Documents are generally referred to as “electronic” if they exist in a medium that can only be read through the use of computers. This would include the items described above and includes data and information stored on computers including what is known as active data, archival data, back-up data, meta-data, residual data or replicate data. The Guidelines define and discuss each of these potential sources of information. The next issue in locating electronic documents is where to locate them. It is critical to identify the computer systems that a party has or has had during the relevant time of the litigation that may contain relevant data or information. This may prove even more challenging where computer systems have been upgraded or computers or other electronic devices have been thrown out because they are obsolete. This issue was addressed by the Ontario court in Nicolardi v. Daley4. In this solicitor’s negligence case, the plaintiff initially brought a motion to compel the defendants to produce all of the records on the firm’s computers as they related to the action in which the defendants acted as solicitors for the plaintiff. discovery. The defendants had refused this request on Upon hearing the motion, the court denied the plaintiff’s request that a Given the computer expert be appointed to examine the defendants’ computers. contrary opinions expressed as to whether “purged” documents could be retrieved, the 4 [2002] O.J. No. 595 (S.C.J.) 1234 -6- court held that it would need expert evidence to satisfy it that such information could in fact be retrieved. Following the initial motion, the plaintiff instructed his solicitors to retain a computer data recovery expert to provide the evidence the court required. The plaintiff then served a second motion to require the defendants to produce all computer hardware containing any documentation created in the action in which the defendants had acted. It was only upon the return of this second motion that defendants’ counsel informed the court that the computer may actually have been discarded. The motion was adjourned and ultimately, it was determined that the original computer that held the files at issue had in fact been replaced and the data had never been transferred. The motion was heard on the issues of whether the motion for inspection was well founded and whether the defendants should bear the plaintiffs costs thrown away in obtaining expert evidence. In its Reasons, the court noted that relevant documents on a computer that have been purged must be listed in Schedule C if there are no electronic or paper copies in existence. The court dealt with the issue of the sensitivity and intrusion of investigating a party’s computers by stating the safeguards would have to be implemented to ensure that the data recovery software used was sensitive enough to search for and recover only relevant documents. An undertaking by the expert, the plaintiff and his solicitors not to review, retain or disclose unrelated documents was also required. The court also held that before a motion for the examination of a computer will be granted, the moving party must have sufficient evidence of a real likelihood that relevant documents not disclosed or produced either exist or may once have existed, on the computers. It must not be a “fishing expedition”. On the facts, the court held that there was sufficient evidence to demonstrate a real likelihood that the requested documents probably once existed. However, because the computer no longer existed and the files were not transferred, there was no electronic data to examine. 1234 -7- The court went on to hold that the plaintiff should be fully indemnified for its costs thrown away. Had the plaintiff known that the computer did not exist at the initial return date, it would not have argued that refusal and would thereby probably have avoided the costs award at that motion, the costs of the expert and the costs of the second motion to compel inspection. It is therefore important to determine at the outset of litigation what computers or other electronic devices are available from which to retrieve relevant information or data. There are a number of challenges involved in assessing and locating what computer systems and data a party has or had at the relevant time and where they are located. In particular, the Guidelines note that some items might be in use by individuals or in storage in different areas or departments. The same document might therefore be stored in multiple locations or in different electronic formats, which will increase the volume of documents that must be reviewed for production. The Guidelines quite rightly point out that the sheer volume of data can be enormous because of the expanding use of computer systems in business and their increasing storage capacity. In addition, things like e-mail are now used so frequently that the volume may be staggering when a search is first done for potentially relevant e-mails. Another challenge clients and litigators will face is the difficulty of reading data that is stored using obsolete programs or devices. The assistance of IT personnel will therefore be critical. Hidden data or information associated or related to electronic documents should also be considered, particularly in cases where issues of authorship or authenticity are raised with respect to a document. The Guidelines define various types of hidden data, Parties must therefore including: “meta-data”, “residual data” and “replicant data”. review the issues in the litigation at the outset in order to determine whether hidden data needs to be reviewed for relevance and in doing so, they should keep in mind the Guidelines’ principle, outlined below, that a number of factors must be balanced to 1234 -8- determine what e-documents should be produced, including cost, burden and the importance of the documents to the outcome of the litigation. (b) Preservation of Electronically Stored Documents The obligation to preserve electronically stored documents is the same as for paper documents. Once a party knows that litigation is threatened or pending, it must take steps to preserve all relevant documents, whether they are electronic or paper copies. The Guidelines address this issue more fully in Section C, which outlines the ediscovery principles and their commentaries. It is therefore important for parties to make sure that their document retention policies specifically address e-documents and that there is a protocol in place for preservation of these documents (as well as hardcopy documents) when litigation is threatened, contemplated or commenced. (c) Electronic Document Review Like hard copy documents, electronic documents must be reviewed for relevance and privilege. However, the Guidelines note that effective review may be challenged For because of the volume and particular characteristics of electronic documents. example, computer back-up tapes can store huge amounts of data, which would need to be converted back to readable form before it could be searched or printed in order to determine relevance. The volume of such data and thus, the costs of conversion and review may be significant. Volume problems may also be exacerbated by the existence of multiple duplicates of documents. The principles outlined below seek to balance these potential costs and the burden on producing parties with the importance of the documents in the litigation. The fact that electronic documents may contain privileged, secret or other sensitive information, means that it is critical that e-documents be properly reviewed before they are produced. This may mean looking at the hidden data that may be associated with 1234 -9- the e-documents to ensure that protected information is not inadvertently disclosed. It is therefore important to define relevance at the outset in order to ensure that the electronic documents that have to be reviewed and produced will be of use to the determination of the key issues in the action. As set out below, it is for this reason that the Guidelines advocate cooperation among the parties in order to narrow and define the issues and therefore the documents that will truly be relevant. Otherwise, the costs of litigation will skyrocket and what is already a lengthy and costly process may become even more so in order to deal with voluminous electronic production. (d) Production of Documents in Electronic Form Counsel must consider how documents will be produced. One key issue is when it is appropriate to produce only in electronic form as opposed to producing electronically in addition to hard copies. While this issue often arises for “paper” documents that may be electronically databased as well, issues that must be addressed in dealing with edocuments include how to: allocate the cost of electronic production fairly, ensure that electronically produced documents are compatible with courtroom technology to facilitate production at trial, provide the redaction of privileged and irrelevant material in electronic form, and ensure the appropriate retention of electronic records. The Guidelines point out that these issues are very much affected by the availability of new technology and its use by lawyers and the courts. For example, many litigation support software tools are designed to produce properly redacted versions of documents, to permit the creation of special seals for production of relevant meta-data and to allow the user to select which fields will be exported. In addition, lawyers are increasingly scanning hard copy documents so that they can be imaged and exchanged on CDs or via web-based software. Using the right litigation tools, it is then possible to include hard copy documents and e-documents within the same database. 1234 - 10 - (iii) Principles that Should Guide E-discovery Process Section C of the Guidelines outlines the 13 principles that the sub-committee recommends guide e-discovery in Ontario. Commentary is provided for each principle, which explains the philosophy behind the principle. The principles are organized into six categories: e-discovery, preservation of electronic documents, pre-discovery discussions, production of electronic documents, privilege and costs. (a) E-Discovery Principle 1 is self-explanatory and is the basic rule that electronic documents that contain relevant data and information are discoverable pursuant to Rule 30. The second Principle attempts to address the concerns outlined above with respect to the volume of potentially discoverable electronic documents and states that the parties’ obligations with respect to discovery of e-documents are subject to balancing and may vary with: • • • the costs, burden and delay that may be imposed on parties; the nature and scope of the litigation, the importance of the issues, and the amounts at stake; and the relevance of the available electronic documents and their importance to the court’s adjudication in a given case. The Commentary to this Principle notes that meta-data may contain relevant information to the litigation or to the authorship or authenticity of a document, which might not be available from paper production of an electronic document. It may therefore be necessary for litigants to consider whether to use forensic techniques to recover backup or obsolete sources in order to find relevant meta-data, which can be costly. The Guidelines recommend that the most cost-effective method be used to locate, preserve, 1234 - 11 - review and produce electronic documents. While electronic documents may be easier to search than printed or scanned copies, they may also be more voluminous, and therefore, ultimately more costly to retrieve and review. Some of these issues were judicially considered prior to publication of the Guidelines. For example, in Sourian v. Sporting Exchange Ltd. (c.o.b. as Belfair),5 the court considered whether an entire electronic database should be produced and, if so, how to ensure that irrelevant information would be excluded. If the entire database was not produced, some form of report would have to be generated or created to produce a subset of relevant data organized in readable form. The Master held that to make such an order would be “onerous and intrusive”6 and that, given the low utility that the particular data at issue would have, the court would not make the order sought. However, the Master did order the defendant not to purge the database until a final resolution of the action and held that this order was not a bar to any subsequent request for information from the database should the interests of justice so require. Sourian is therefore a good example of how the courts will balance the moving party’s interests in fulsome production with the responding party’s interests in minimizing cost and inconvenience. The Guidelines state in Principle 3 that in most cases, the primary source of edocuments should be a party’s active data and any other information that was stored in a manner that anticipated future business use and that still permits efficient searching and retrieval. This Principle reflects a recognition that there are going to be many sources of electronic documents that may have little or no relevance to the outcome of the action and that the scope of searches must be narrowed accordingly in order to contain production costs. This realistic approach to production of e-documents has also been recognized in the Ontario courts. For example, in Dulong v. Consumer Packaging Inc.7, the court refused to grant the plaintiff’s motion for an order that the corporate 5 6 [2005] O.J. No. 753 (Master) Ibid, at para. 12 7 [2000] O.J. No. 161 (Master) 1234 - 12 - defendant search its entire computer system for e-mail relating to matters in issue in the litigation. The request was refused on the ground that doing so would, “having regard to the extent of the defendant’s business operations, be such a massive undertaking as to be oppressive.”8 The Commentary to Principle 3 cautions that if a party is aware or ought reasonably to be aware that the specific, relevant data or information can only be obtained from a source other than the active and current archival data sources, that source should at least be preserved and listed appropriately in the party’s Affidavit of Documents. This will then allow the other side to assess whether it wants to attempt to have the data produced. The Guidelines go on to recommend in Principle 4 that, unless residual or replicant data or other material that is not accessible except through forensic means is known or should reasonably be known to be available and relevant, it need not be preserved or produced. However, if such data is considered relevant, parties should request its preservation as early as possible in order to avoid inadvertent deletion or claims of deliberate destruction. It is therefore important for parties to consider at any early stage whether these forms of data will be relevant to the issues in the action and to send out a preservation letter to the other side as quickly as possible. (b) Preservation of Electronic Documents Principle 5 is practical and states that as soon as litigation is contemplated or threatened, parties should immediately take reasonable and good faith steps to preserve relevant electronic documents. The Principle goes on to state that it is unreasonable to expect parties to take every conceivable step to preserve all documents that may be potentially relevant. It is therefore necessary for counsel to advise clients about their obligations as early as possible and to recommend steps that 8 Ibid, at para. 21 1234 - 13 - may be prudent or required to implement what the Guidelines term a “litigation hold”. These steps may include a number of things outlined in the Commentary to the Principle including the collection of all relevant document retention, back-up, archiving and destruction policies and issuing appropriate instructions to all staff to stop personal activities and practices that could result in the destruction or modification of relevant electronic documents. In the appropriate cases, it may also be necessary to create litigation copies of potentially relevant active data sources or back-up data. Interestingly, the Guidelines suggest that where applicable, electronic document retention policies should be shared so that the parties are aware of what e-documents may exist and what may no longer be accessible. While parties to litigation don’t usually share such information at the onset, from a practical standpoint, the suggestion makes good sense in that it will, at an early stage in the litigation, alert all parties to what documents are or are not available. Principle 6 is the converse obligation and states that the parties should place each other on notice with respect to preserving electronic documents as early as possible. It is therefore important for parties to consider what the other side may have in its possession that should be preserved and to send out a preservation letter. In the spirit of cooperation outlined in the Guidelines, Principle 7 states that the parties should discuss the need to preserve or produce meta-data as early as possible. In addition, parties who consider meta-data relevant, should notify the other party immediately. The obligation to preserve all potentially relevant electronic documents may extend to the parties’ service providers. For example, in CIBC World Markets v. Genuity Capital Markets9, a decision pre-dating the Guidelines, Justice Farley ordered that counsel send a joint letter to all independent service providers to advise that they should 9 [2005] O.J. No. 614 (S.C.J.) [CIBC World Markets] 1234 - 14 - preserve any relevant material in their respective servers. The court noted that it may be helpful for the defendants to obtain copies of such contents applicable to them as they prepare their affidavits of documents, particularly as relevant documents may have been “deleted” from their electronic devices in the normal course.10 (c) Pre-Discovery Discussions Between Counsel Principle 8 is the “meet and confer” principle whereby “as soon as practicable and on an ongoing basis, counsel are encouraged to meet and confer regarding the location, preservation, review and production of electronic documents”. The Principle also suggests that counsel seek to agree on the scope of each party’s rights and obligations and a process for dealing with them. The need for collaboration among counsel to deal with e-discovery has already been discussed by the Ontario court. In Sycor Technology Inc. v. Kiaer,11 the court found that “dealing with databases and other electronic documents requires procedural collaboration and a healthy does of pragmatism and common sense”12. In that case, the Master suggested that at the very least, the parties should consider the electronic production of documents that is required and the potential use of computer experts to identify what exists and what is truly relevant. The court ultimately adjourned the motion sine die and ordered that the defendant provide a list of documents to the other parties and that the parties then discuss the method and costs of production. In its reasons, the court also directed the parties to the Guidelines issued by the Discovery Task Force, something that we will likely see more of as the courts increasingly turn to the Guidelines in determining e-discovery issues. 10 11 Ibid, at p. 3, para. 7 Sycor, supra note 1. 12 Ibid, at para. 2 1234 - 15 - Following this Principle will mean a level of cooperation that, while not unheard of, is fairly unusual in most litigation. However, given the potential for the overly-broad scope of electronic documentary production, this guideline makes good sense. The Commentary to Principle 8 outlines a number of issues that may require early discussion such as: the relevant time period; the identity of individuals likely to have created or received relevant e-documents; which computer systems or media existed and are available relating to this specific period; and in what form documents from relevant periods should be produced. The relevant issues will depend upon the type of case and parties involved, which is why early discussion between counsel will be important. Because decisions will need to be made about what e-documents to search for, retrieve and produce, the process whereby data has been screened, reviewed and ultimately either removed or produced will be very important. The Commentary to Principle 8 therefore recommends that the producing party be in a position to produce an affidavit or other documentation detailing the data acquisition process and describing the preproduction processing of the data, for example, how duplicate documents have been identified and treated such as identical e-mails delivered to different mailboxes. Principle 9 recognizes the need to define the scope of e-discovery prior to commencing oral examinations for discovery. The Principle notes that this can best be achieved if the parties’ requests for preservation and pre-discovery meetings between counsel are as specific as possible in identifying what is requested, what is being or not being produced and the reasons for any refusals. The Commentary to Principle 9 stresses that boiler plate approaches, which often seek all e-mail, databases, word processing files or whatever other electronic documents the requesting party can describe by category, should be avoided. Counsel are instead encouraged to target particular electronic sources, documents or time frames that they contend are truly important to resolve the case. The Commentary also recommends that the parties identify the form in which they wish electronic documents to be produced. 1234 - 16 - Absent exceptional circumstances where it is truly necessary, the Commentary states that the parties should generally not require production of hardware media such as computer hard drives. The example given for exceptional circumstances is where a party has reasonable grounds to believe that documents (or the meta-data associated with documents) have not been produced and are likely still stored on a computer hard drive or other electronic storage medium, and the other side disputes this belief, inspection of the storage medium itself would be the only solution. Appropriate safeguards would have to be in place to protect the producing party’s non-relevant or privileged data contained in the storage device. The Guidelines note that this form of relief is normally only available by order under section 101 of the Courts of Justice Act in the form of an injunction akin to a Anton Piller Order. The Guidelines acknowledge that it may be impractical or prohibitively expensive to review all the available electronic information for relevance and privilege. Principle 10 therefore states that a party may satisfy its obligation to produce relevant electronic documents in good faith by using electronic tools and processes (such as data sampling, searching, or the use of selection criteria) to identify the documents that are most likely to contain relevant data or information. Where possible, the Commentary states that parties and counsel should agree in advance on the search methods and selection criteria or search terms that will be used. If there is no agreement on this issue, parties should record and be prepared to disclose any limits on the searches they have undertaken should the issue be raised by the other side. Principle 10 was considered by the Ontario Court in May 2006. In Air Canada v. WestJet Airlines Ltd.,13 Justice Nordheimer rejected Air Canada’s submission that its proposed manner of identifying, searching for and filtering its electronic documents for privilege and relevance was adequate. Air Canada had identified relevant search terms and sent them to WestJet’s counsel to get their agreement on the terms to be used. 13 [2006] O.J. No. 1798 (S.C.J.) 1234 - 17 - WestJet suggested many additional search terms, some of which Air Canada accepted, but no agreement was reached. After using its electronic search terms, Air Canada then used an electronic filter to identify privileged documents. It proposed to produce the resulting electronic documents without any further review for either relevance, privilege or confidentiality. WestJet objected to Air Canada’s lack of manual review. While the court accepted that the first part of Air Canada’s approach was appropriate (the use of electronic search terms to identify the apparently relevant documents), it did not accept that Air Canada’s intention not to manually review the resulting documents was validated by Principle 10 or was consistent with the Rules of Civil Procedure. The court held that the Commentary to Principle 10 confirms that some form of further review is contemplated after the electronic search has been completed. The Commentary expressly refers to a “detailed review for relevance and privilege”. While Justice Nordheimer accepted that in some cases such a detailed review might be conducted electronically, in the circumstances of this case, a detailed review could not properly be accomplished other than manually. Because Air Canada had commenced this proceeding and chose to cast its claim in a manner that made the documents at issue relevant, the Court was unmoved by Air Canada’s complaint that a manual review would be too time consuming and expensive. The court did acknowledge, however, that each and every page of each and every document did not have to be manually reviewed and stated that different categories of documents would require different levels of review. (d) Production of Electronic Documents When it comes to production of electronic documents, the Guidelines advocate in Principle 11 that parties agree early in the litigation process on the format in which the documents will be produced. Production in electronic form is recommended where it will: 1234 - 18 - • • provide more complete relevant information; facilitate access to the information in the documents, by means of electronic techniques to review, search or otherwise use the documents in litigation process; • • minimize the costs to the producing party; or preserve the integrity and security of the data. The overriding principle is that if for any reason related to the litigation it is not sufficient to produce a print out or scanned version of a document, the document must be produced in electronic form. The Commentary to Principle 11 also states that production of voluminous documentation in a form that does not provide meaningful access should be avoided. This Principle is reflective of Justice Cumming’s holding in a motion in the Wilson v. Servier Canada Inc.14 class action. In Wilson, the plaintiff moved for an order directing one of the defendants to consent to the release of part of a database, or the objective field electronic coding within the database, created by a party to the US multi-district diet drugs product liability litigation. The defendants had refused to produce CD-ROMs and electronic databases prepared for their own use in respect of their documents. They did, however, agree to provide an index to the database in word format. Plaintiff’s counsel argued that the voluminous documents were simply not searchable using this index. The court held that production of voluminous documentation in a form that does not provide meaningful access is not acceptable and that it is implicit to an affidavit of documents that a defendant give meaningful access to its documents through the electronic database that it has prepared. Justice Cumming held that: “in this Court’s view, the production of documents implies meaningful access to those documents through an electronic database, at least when the database has already been prepared 14 [2002] O.J. No. 3723 1234 - 19 - by the defendant for its own purposes.”15 This was the situation here. The court went on to hold that if any electronic mechanism to facilitate access was available it should be obtainable by the plaintiff.16 Parties will therefore have to consider exchanging electronic databases when they produce their documents. In doing so, they will also have to ensure that they are producing only non-privileged information and not things like lawyer’s work product. In the Commentary to Principle 11, the Guidelines also recommend that where there is voluminous documentation and digitizing documents may be appropriate or where documents need to be organized in a common, indexed fashion, parties should attempt to agree on a protocol to address these issues and for sharing the costs involved. In doing so, however, parties are cautioned to avoid the loss of privilege or the production of irrelevant material. (e) Privilege The issue of privilege is also the subject of Principle 12 of the Guidelines, which provides that “where appropriate during the discovery process, parties should agree to measures to protect privileges and other objections to production of electronic documents.” Litigants are cautioned that e-discovery sometimes involves a heightened or special risk of inadvertent or unintended disclosure of privileged information. The examples of these risks listed in the Commentary to Principle 12 are: • • production of large volumes of electronic documents, for electronic searching, such as a computer hard drive or back-up tapes; and an Anton Piller17 injunction, search warrant or other order for immediate production of documents to an adverse party, without prior review for privilege. 15 16 Ibid, para. 12 Ibid, para. 39 1234 - 20 - The Commentary therefore recommends that counsel discuss how to protect privileged documents at the outset of litigation. Because of the potentially large volume of electronic documents, review for privilege will take time and counsel are therefore encouraged to agree on measures to prioritize review and streamline production of nonprivileged material without the loss of privilege. The Commentary also notes that special issues may arise with any request to inspect hardware media such as computer hard drives and that parties should therefore consider how to guard against the release of proprietary confidential information and protect personal data if such media are to be inspected. As noted above, the issue of privilege was also discussed in the Nicolardi v. Daley case where the action involved solicitor’s files on a computer. In CIBC World Markets, a case that received extensive press coverage, the court addressed the protection of solicitor-client privilege in the context of its order that electronic documents be preserved without being reviewed by the plaintiff or its counsel. Undertakings had been given by the defendants to the effect that they had “nothing to hide/destroy” thereby avoiding a finding having to be made that there was an extremely strong prima facie case in the context of an Anton Piller order. The court held that this was to be interpreted as equivalent to an Anton Piller order but without the plaintiffs or their counsel having any access to or seeing anything seized pursuant to the order. Access to the electronic devices (including computers and Blackberries) was permitted for imaging and storing in a safe manner their contents including devices located at any office or home, whether owned by the defendants or their spouses, children or other relatives. An issue of privilege arose because one of the defendant’s spouses was a retired lawyer. Her legal files therefore had to be protected and the court ordered that 17 An Anton Piller Order is often called a “civil search warrant” and is an order whereby a party is permitted to enter another party’s premises to search for and retrieve relevant documents. 1234 - 21 - she and her husband’s counsel review the imaged file index to see if privilege should be claimed over any documents. (f) Costs Principle 13 of the Guidelines recognizes that the general rule for costs should be the same as for production of paper documents whereby, pending final disposition of the proceeding, the interim costs of preservation, retrieval, review, and production of electronic documents will be borne by the producing party. The other party will have to incur the costs of making a copy of the productions for its own use. This Principle notes that it may be appropriate, in special circumstances, for the parties to arrive at a different allocation of costs on an interim basis, which may occur either by agreement or by court order. In the context of costs, the Guidelines were recently considered by the Ontario court in JDS Uniphase Inc. v. Metconnex Canada Inc.18 The dispute in that case centered on whether the defendants should be reimbursed their payment of one half of the plaintiffs’ cost of producing its summation database with the same level of functionality as that of the defendants. While the parties had followed the Guidelines and agreed to use a common source and a common format for the production of their e-documents, what the court called the “critical degree of functionality” was not agreed upon. The Master held that the plaintiffs’ offer to pay one half of the increased cost was a reasonable compromise and refused the order sought by the defendants. He did, however, leave it open to the defendants to recover this amount if they were ultimately successful at trial. In his Reasons, Master Beaudoin also held that to require the plaintiffs to reimburse these costs, he would require additional information with respect to the long-term benefits of producing the e-documents in the enhanced format. This case was not one where either party was unable to bear the costs of the complex and expensive litigation. To make the order sought, the Master would require “clearer evidence that the 18 [2006] O.J. No. 4148 (Master) 1234 - 22 - production of the database in the revised format was of benefit to both parties in the litigation or to the court or that the costs of the electronic production resulted in a disproportionate burden for one of the parties.” 4. Future Development of the Guidelines The Guidelines note that they are intended to develop over time as technology develops and as the bench and bar gain experience with e-discovery in practice. It is therefore intended that the process of development of e-discovery guidelines and “best practices” be ongoing. Another committee has already been established to work towards implementing within the Ontario court system and the litigation bar, in a practical and meaningful way, best practices with respect to electronic discovery. The committee is called the E-Discovery Implementation Committee (“EIC”). Its work will include the preparation of precedents (model orders, discovery requests, preservation letters and “meet and confer” letters); liaising with and educating the judiciary on electronic discovery issues and the model documents; liaising with and educating bar; obtaining feedback from the judiciary and the bar with a view to improving the model documents and/or creating additional ones; addressing the utility of and/or drafting an e-discovery practice direction; and addressing the utility of and/or drafting proposed revisions to Rule 30 to deal with e-discovery issues. The work of the EIC is currently underway and model documents are expected to be circulated to members of the bench and bar for comment before the end of the year. 21576977.1 1234 TAB 4 PRESERVATION OF ELECTRONIC EVIDENCE: WHY IT PAYS TO PRESERVE Sharon S. Wong Partner 416.863.4178 sharon.wong@blakes.com 1234 Preservation of Electronic Evidence: Why it Pays to Preserve Sharon S. Wong • • • Valuable secrets may be lurking on hard drives and memory chips, How to recover those secrets and use them for your own advantage and What to do if the other guy doesn’t play fair. Valuable Secrets may be Lurking on Hard Drives and Memory Chips The goal of the Guidelines for the Discovery of Electronic Documents in Ontario (the “E-Discovery Guidelines”) is the same as all our discovery rules – it is to facilitate disclosure of relevant information. Electronic discovery has been defined as “the discovery of electronic documents and data. Electronic documents include email, web pages, word processing files, computer databases, and virtually anything that is stored on a computer. Technically, documents and data are “electronic” if they exist in a medium that can only be read through the use of computers. Such media include cache memory, magnetic disks (such as computer hard drives or floppy disks), optical disks (such as DVDs or CDs), and magnetic tapes. Electronic discovery is often distinguished from “paper discovery,” which refers to the discovery of writings on paper that can be read without the aid of some devices.”1 The documents most commonly requested and produced in litigation are those created by word processors, databases, spreadsheets, email, and other familiar programs. These documents are routinely used and are normally relatively easy to identify and locate. However, many other kinds of information can exist in computer systems. These may include less familiar kinds of documents, such as web pages, browser history files that track a user’s movements between web sites and pages on the internet, cell phone logs, and many other kinds of information stored on 1 THE SEDONA PRINCIPLES: Best Practices Recommendations & Principles for Addressing Electronic Document Production (July 2005 Version). The Sedona Conference® is a non-profit, U.S. research and education institute for the advancement of law and policy in the areas of antitrust, complex litigation and intellectual property rights. The Principles were initially published in January, 2004. The Sedona Conference continues to refine and update the commentary as the law evolves in the U.S. Available online at http://www.thesedonaconference.org/content/miscFiles/7_05TSP.pdf 1234 -2computer-based devices in their day-to-day operations. Most users may be completely unaware these documents even exist.2 Depending on the issues in a given case some of this information can be very relevant, and indeed valuable to a litigant. Consider the following real-life examples: Plasse v. Tyco Elec. Corp., WL 2623441 (D. Mass. Sept. 7, 2006). In a wrongful termination action, the defendant claimed that the plaintiff had misrepresented his credentials when applying for the job. After the plaintiff learned that the defendant would be inspecting the laptop he used to create the resume, the plaintiff accessed his resumes and cover letters and modified the documents’ electronic properties. However, after a computer forensics expert recovered the deleted metadata and discovered the plaintiff’s alterations, the court ruled that “Plaintiff has destroyed or concealed evidence, engaging in an egregious pattern of misconduct that has hampered the proceedings in this case.” It also noted that “Plaintiff's explanation for this behavior is more than unconvincing; it verges on the absurd.” The court granted defendant’s motion to dismiss and for sanctions. King v. Merrill Lynch Canada Inc., (Ont.S.C., 2005) In this case the plaintiffs sued Merrill Lynch for wrongful dismissal. Merrill Lynch’s defence was that it terminated the plaintiffs’ employment because they engaged in discretionary trading with approximately 200 clients who were involved in a strategy recommended by the plaintiffs. One of the key factual issues was whether the plaintiffs had telephoned their clients on the days the trading occurred. The court rejected the oral testimony of the defendants on this point on the basis of electronic data recorded by Merrill Lynch’s telephone system: "Another key piece of evidence contradicting the evidence of [the defendants] was the electronic record of telephone calls, which were recorded contemporaneously by an electronic chip in the receiver of each telephone set, at Merrill Lynch’s Ottawa office… At the end of each day, all telephone data was automatically sent by modem to a server located in Mississauga, where the data was stored. The telephone data was recorded in the usual and ordinary course of business of Avotus and Merrill Lynch and [the court ruled] that the telephone records, extracted from the recorded data, were business records within the meaning of s. 35 of the Evidence Act.” ITV Technologies Inc. v. WIC Television Ltd., (2003), 29 C.P.R. (4th) 182 (F.C.) In this trade-mark infringement case the court allowed the parties to refer to historical versions of the parties’ web sites by using an internet archive site – 2 Guidelines for the Discovery of Electronic Documents in Ontario, pp. 4-5. 1234 -3www.archive.org. The trial judge stated: "In my view, when considering the contents of a web site, the original is found on the Internet and provides better evidence than a print copy. The Court was able to see the documents as they existed on the Internet, and could witness such features as hyperlinking and interactive streaming that could not have been realistically reproduced on paper. … Given that web sites are continually changing and evolving, a web site which appears on the Internet today would not necessarily look the same as it did for example, in 1997. In order to look into the past, both parties relied on the web site www.archive.org, which contains a digital library of Internet web sites. By using the Way Back Machine, the parties were able to access the web sites as they had existed at the relevant time period." United States v. Hamilton, 413 F.3d 1138 (10th Cir. 2005). The defendant was convicted of transporting child pornography in interstate commerce. The government introduced 44 child pornography images the defendant allegedly uploaded to a newsgroup. The images contained computergenerated header information (metadata) linking the defendant to the images. On appeal, the defendant argued the headers constituted hearsay and should have been excluded from evidence. The appellate court rejected this argument and found the district court was correct in finding the headers did not amount to hearsay. The court reasoned the information did not fall within the definition of hearsay because “the header information was automatically generated by the computer hosting the newsgroup each time Hamilton uploaded a pornographic image to the newsgroup.” CIBC World Markets Inc. v. Genuity Capital Markets, (Ont.S.C, February 16, 2005) Counsel were directed to jointly send a letter to all independent server providers (ISP) to ask them to preserve any relevant emails sent by the defendants that might be in the ISPs’ servers. One of the defendants had lost his Blackberry, and the Court directed that his ISP be contacted to get his stored messages from that source. Two months later, the Court issued an order requiring Yahoo! Canada Inc. to preserve and produce any and all information, emails or other data of any kind in its possession or control relating to one of the defendant’s Yahoo email account. A similar order was issued to Internet Service Providers in Portus Alternative Asset Management Inc. to deliver all documents, server files, archive files and any other information in any form in any way recording messages, email correspondence or other information sent or received by Portus’ directors, officers, employees or agents. 1234 -4Robak Industries Ltd. v. Gardner, 2005 BCSC 1133 The plaintiffs alleged that the defendants conspired to obtain greater control of a third party corporation. In furtherance of the alleged conspiracy, it was alleged that the defendants tried to discredit the plaintiffs in the eyes of other shareholders and reported the plaintiffs to the B.C. Securities Commission and the RCMP. The defendant was required to produce a list of all documents evidencing telephone calls including cell telephone statements. How to Recover Secrets and Use Them for Your Advantage The lesson learned from these examples is that there is a wide-range of possible sources and types of relevant electronic information. It is therefore necessary as soon as litigation is anticipated for a litigant and its legal counsel to seriously think about and investigate what information may exist and where that information may be located to ensure that the information in its own possession preserved, and in order to give notice to the opposing party as to what information it is required to preserve. The E-Discovery Guidelines set out a number of principles that are intended to guide parties and their lawyers in the e-discovery process. The Guidelines are intended to provide practical suggestions on how to fulfill parties’ existing obligations respecting the preservation and production of relevant documents from electronic sources. Although they are not enforceable directly, as are the Rules of Civil Procedure, Ontario courts have already made discovery orders that have referred to the principles set out in the Guidelines.3 Accordingly, litigants who disregard the requirements of the Guidelines do so at their peril. The E-Discovery Guidelines contain four Principles which relate to the preservation of electronic documents.4 Each of these four principles is addressed below. Principle 5: As soon as litigation is contemplated or threatened, parties should immediately take reasonable and good faith steps to preserve relevant electronic documents. However, it is unreasonable to expect parties to take every conceivable step to preserve all documents that may be potentially relevant. 3 See for example: Air Canada v. Westjet Airlines, [2006] O.J. No. 1798, and JDS Uniphase v Metconnex Canada Inc. [2006] O.J. No. 4148 The Guidelines contain a detailed Commentary section that expands on each principle. A complete copy of the Guidelines including the commentary is available online at: http://www.oba.org/en/pdf_newsletter/E-DiscoveryGuidelines.pdf 4 1234 -5- Principle 5 is intended to introduce into Canadian discovery practice the concept of a “litigation hold”. Indeed, that term is specifically included in the Commentary to Principle 5: Commentary: The obligation to preserve relevant electronic documents applies to both parties. Counsel should advise clients with respect to this obligation at the earliest possible time, including the steps that may be prudent or required to implement a “litigation hold”. The concept of a “litigation hold” for electronic documents is a relatively new creation. It appears to have been introduced in the United States in the famous case (at least among lawyers who are concerned about discovery obligations) of Zubulake v. UBS Warburg. Laura Zubulake was an equities trader with UBS. She sued UBS for gender discrimination, failure to promote, and retaliation. Ms. Zubulake vigorously maintained that the evidence she needed to prove her case existed in email correspondence sent among various UBS employees and stored only on UBS’s computer systems. Over the course of 2003 and 2004 she brought five motions in the U.S. District Court for the Southern District of New York which resulted in a series of precedent setting decisions.5 In the fourth of those decisions, appropriately referred to as Zubulake IV 6, the court held that a litigant’s duty to preserve electronically stored materials is triggered "when the party has notice that the evidence is relevant to litigation or when a party should have known that the evidence may be relevant to future litigation". The court described the scope of what the duty to preserve encompasses and introduced the now widely used term of a litigation hold: The scope of a party's preservation obligation can be described as follows: Once a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a “litigation hold” to ensure the preservation of relevant documents. As a general rule, that litigation hold does not apply to inaccessible backup tapes (e.g., those typically maintained solely 5 See Zubulake I, 217 F.R.D. 309 (addressing the legal standard for determining the cost allocation for producing emails contained on backup tapes); Zubulake v. UBS Warburg LLC, 2003 U.S. Dist. LEXIS 7940, No. 02 Civ. 1243, 2003 WL 21087136 (S.D.N.Y. May 13, 2003) ("Zubulake II") (addressing Zubulake's reporting obligations); Zubulake v. UBS Warburg LLC, 216 F.R.D. 280 (S.D.N.Y. 2003) ("Zubulake III") (allocating backup tape restoration costs between Zubulake and UBS); Zubulake v. UBS Warburg LLC , 220 F.R.D. 212 (S.D.N.Y. 2003) ("Zubulake IV") (ordering sanctions against UBS for violating its duty to preserve evidence); and Zubulake V, 2004 U.S. Dist. LEXIS 13584 2004 WL 1620866 (S.D.N.Y. July 20, 2004) (ordering sanctions against UBS for deleting emails after the litigation hold was implemented including that an adverse inference instruction be given to the jury). A copy of Zubulake IV is available online at: http://www.arkfeld.com/resource%20material/Zubulak%20IV.pdf . 6 1234 -6for the purpose of disaster recovery), which may continue to be recycled on the schedule set forth in the company's policy. On the other hand, if backup tapes are accessible (i.e. actively used for information retrieval), then such tapes would likely be subject to the litigation hold. Principle 5 of the E-Discovery Guidelines maintains the requirement that the litigation hold be put in place “as soon as litigation is contemplated or threatened”. This means that parties have an obligation to advise staff to preserve electronic documents long before they start preparing their affidavits of documents. The Commentary to Principle 5 provides some recommendations as to how the litigation hold is to be implemented in Ontario. In appropriate cases, prudent steps may include: (i) (ii) collect all relevant document retention, backup, archiving, and destruction policies; issue appropriate instructions to all staff, or at least to relevant staff, to cease or suspend personal activities and practices that could result in the destruction or modification of relevant electronic documents, such as the deletion of emailbox entries or archives; create litigation copies of potentially relevant active data sources, for example by means of electronic backup or forensic copying of the documents, so as to preserve potentially relevant meta-data; and cease or suspend the overwriting of backup tapes, and other document retention practices that could result in the destruction or modification of relevant electronic documents in the ordinary course of business. (iii) (iv) The E-Discovery Guidelines make it clear that issuing instructions to implement a litigation hold is only the start of a party's discovery obligations. A party and its counsel must oversee compliance with the litigation hold, monitoring the party's efforts to retain and produce the relevant documents. A party may attract more sanctions and censure from the court if it implements a limitation hold and then ignores it than if it negligently overlooks implementing the hold in the first place. In the former case, deletion of documents after implementation of a litigation hold may be construed as willful destruction of evidence and lead to an adverse inference.7 7 See below at pp. 11-14, and Zubulake V, 2004 U.S. Dist. LEXIS 13584 for an example of a case where a very significant adverse inference was made when employees deleted emails after being instructed to implement a litigation hold. 1234 -7- The E-Discovery Guidelines advise parties to consider sharing their electronic document retention policies, including their backup and archiving policies, so that both parties are aware of what electronic documents may exist and what may no longer be accessible. There have already been two Superior Court cases in Ontario where Justice Cameron has stated that businesses are obligated to have document retention policies that at the very least preserve documents until the expiration of the relevant limitation period, and that “failure to do so risks a court making an adverse inference on the absence of evidence”.8 Now that the Limitations Act, 2002 imposes an ultimate limitation period of 15 years, it would be prudent for all businesses to consider implementing a formal document retention policy that preserves relevant documents for at least 15 years. Any such retention policy should include procedures for implementing a litigation hold in appropriate circumstances. The litigation hold should contain safeguards above and beyond the normal document retention procedures, for example (as discussed below) procedures for ensuring that relevant information that may not be routinely saved for long periods is not deleted in the normal course of business, and procedures for capturing and preserving existing meta-data for key documents. Principle 6: Parties should place each other on notice with respect to preserving electronic documents as early in the process as possible, as electronic documents may be lost in the ordinary course of business. One important characteristic of certain types of electronic information is that it may be routinely updated or changed, with the result that information that may exist today may not exist tomorrow. For example, many companies now give their employees security cards which allow them to access the employer’s premises. In some cases, logs are automatically created which record which employees used their card at what time to access a particular part of the premises. That log information may only be stored for a finite period of time, and then it is automatically overwritten after that time has expired. Once the information is overwritten it may be impossible to retrieve it. If the identity of the people who had access to the office at a certain time is material to your case, it will be important to identify as soon as possible that the log exists so that it can be preserved. If the log record is lost because of 8 Alvi v. YM Inc. (Sales) (c.o.b. Stitches) [2003] O.J. No. 3467, at para. 48; see also: Ontario v. Johnson Controls Ltd. [2002] O.J. No. 4725, at paras. 50-51. 1234 -8a delay in identifying its relevance you may lose a key piece of evidence for proving your case, and just as importantly your opponent may be able to point to the loss of the log as evidence that you had something to hide. One of the critical things to do as soon as the possibility of litigation is contemplated is to consider what documents (both in traditional paper form and electronic) exist that are relevant to litigation and that are liable to be lost, discarded, deleted or modified in the ordinary course of business. You must consider the documents under your own control, the documents under the control of the opposing parties, and the documents under the control of third parties, and put the appropriate parties on notice as to the need to preserve those documents. If the opposing parties and/or the third parties will not agree to preserve the documents, then you should consider seeking a court order requiring them to do so. Principle 7: Parties should discuss the need to preserve or produce meta-data as early as possible. If a party considers meta-data relevant, it should notify the other party immediately. Electronic information has a paradoxical nature in that it often continues to exist, and can be recovered, many years after it was created, but important elements of that information may be accidentally (or very deliberately) lost by the mere touch of a button. Most word processing or spreadsheet files will have meta-data9 embedded in the file that will include information such as who created the file, who last edited the file and when the last edit occurred. That metadata can continue to be safely embedded on that file for many years, but as soon as someone opens the file (perhaps while legitimately reviewing it to determine if it is relevant to the litigation) and then saves it before closing it, the previously existing metadata will automatically change, and information that once existed about the last edit may no longer exist, and may not be recoverable. If the identity of who last edited the document is material in your case, then it will be important to know that as soon as possible so that steps can be taken to secure that information. 9 The Guidelines for the Discovery of Electronic Documents in Ontario define “Meta-data” as “electronic information that is recorded by the system about a particular document, concerning its format, and how, when, and by whom it was created, saved, assessed, or modified. For example, most word processing software records who created or modified a document, as well as the dates and times of document revisions. Most e-mail software records the dates and times e-mails are created, sent, opened, and saved as well as the names of the originator and all recipients, including those “blind copied.” This information may not be seen by users or appear in a print-out of the document in the ordinary course of business. However, meta-data is generally readily available, and can be extracted in searchable or printable form if it is relevant to litigation…” 1234 -9- Although the meta-data associated with many types of files will often not be relevant, the Commentary to Principle 7 states that the meta-data attached to emails is always relevant (presumably because it contains important information relating to the authenticity of the document such as when it was sent and to whom), and there is a presumption that meta-data in emails should always be produced in litigation: Commentary: The meta-data associated with e-mail documents is relevant, and even necessary to list the documents accurately in an Affidavit of Documents. Parties should ordinarily expect that this type of meta-data be preserved and produced in litigation. It almost goes without saying that email correspondence is often some of the most critical documentary evidence in a case. However, many email systems still automatically delete historical emails from company servers after a relatively short period of time (such as six months). Although, some companies will often have printed copies of historical emails, the printed copies will not show the meta-data, and in cases where authenticity of the email is in dispute the metadata would be a key piece of evidence. As a result, a company’s document retention policy should consider appropriate procedures for routinely archiving relevant email correspondence in an electronic form that preserves the metadata. Email archiving involves the transfer of email from primary storage to secondary storage, usually with continued user access and retrieval capabilities. An important feature of email archiving is the ability to assure that email may be reliably located, retrieved and produced in its original form, without alteration. All email generated or received by a specified person can be captured directly from the server without the user’s involvement, thus reducing the risk that some emails may not be captured. 10 Principle 8: Counsel should meet and confer, as soon as practicable and on an ongoing basis, regarding the location, preservation, review and production of electronic documents, and should seek to agree on the scope of each party’s rights and obligations with respect to e-discovery, and a process for dealing with them. 10 Email Retention: Time for a New Approach, published in the September-October edition of AIIM EDOC magazine. Written by Thomas Allman. Available at: http://www.edocmagazine.com/vault_articles.asp?ID=30580&header=e_features_header.gif 1234 - 10 - The goal of Principle 8 is to encourage parties to address e-discovery issues at an early stage so as to reduce the likelihood of disagreement over production issues that could result in costly and time consuming discovery motions. The issues commonly requiring early discussion include: (i) (ii) the relevant time period for the purpose of productions, the identity of individuals likely to have created or received relevant electronic documents in the period; which computer systems or media existed and are available relating to that period, which electronic documents can and should be preserved (e.g. is there a need to preserve meta-data in Word files?) which electronic documents can be made accessible and searched on a cost effective basis (e.g. are there backup tapes, and is it necessary to search them); what searches should be conducted to identify relevant materials, including the “key words” to be used to perform these searches; Electronic discovery can result in many million of pages of potentially relevant documents (the hard drive on one personal computer can hold the equivalent of millions of pages of information). The courts have accepted that in many cases it would not be reasonable to require a litigant to manually review each of those documents for relevance, and therefore parties are encouraged to agree on search terms that can be applied to narrow the initial scope of the edocuments. In most cases, however, the party producing the documents will still have to manually review all of the documents containing the search terms in order to screen for relevance and privilege.11 (vii) in what form should the relevant materials be produced. Although the production of documents in many Canadian cases is still done in the form of traditional paper and hard copies of the documents, it is becoming common for documents to be exchanged in electronic format. This is especially true in cases involving large 11 (iii) (iv) (v) (vi) Air Canada v. Westjet Airlines, [2006] O.J. No. 1798, and Commentary to Principle 10 of the EDiscovery Guidelines. 1234 - 11 amounts of documents. The form of electronic production can vary substantially, and in order to avoid costly disagreements and duplication of effort, it is usually advisable for parties to try to agree to a common format ahead of time. The recent decision in JDS Uniphase v Metconnex Canada Inc. illustrates some of the potential problems that can occur in this area. In this case the parties had actually met ahead of time and agreed that they would each produce their documents in a searchable database format that would run in Summation software. However, the parties did not agree on the specifics relating to the functionality of the database. Two options had been available and the parties failed to agree as to which option they would jointly pursue. The plaintiffs chose the less expensive option (with less functionality) whereas the defendants chose the more costly version. After the limitations on the plaintiff’s system became apparent, the defendant complained, and eventually the plaintiff agreed to produce the database with the same functionality on condition that the defendant pay half the cost of this extra work. The defendant’s motion to recover the additional costs that it paid was dismissed on the basis that the plaintiff’s first database met the requirements of the Rules, and the court needed more evidence as to the additional benefits accruing from the more expensive system. As noted in the Commentary to Principle 8, parties should keep track of their document acquisition activities so that they will be in a position to give evidence as to their data acquisition process and describe the pre-production processing of the data. For example, a party may decide to pre-screen email to remove information that is personal, non-responsive, or duplicative. Requesting parties may want to know what standards were used for the pre-screening process (e.g. were identical emails delivered to different mailboxes considered duplicates?). What to Do if the Other Guy Doesn’t Play Fair You dutifully sat down at the start of the litigation and created a list of all the documents and pieces of electronic information you thought would be relevant, your counsel sent a letter to the opposing lawyer providing a list of what was needed and asking them to implement a litigation hold, but despite all of that your opponent’s affidavit of documents lists a few letters and printouts of file copies of a few emails and nothing else. To make matters worse, during the examination for discovery your opponent admits that key database entries were accidentally over-written two months after you asked your opponent to put a litigation hold on those files. So what do you do now? How can you turn these apparent negatives into positives for your case? 1234 - 12 The American case of Zubulake v. UBS Warburg case is an excellent example of turning bad conduct by your opponent into a big positive. Ms. Zubulake was the equities trader who sued for employment discrimination and alleged that her former employer had wilfully deleted relevant emails despite contrary court orders. After two years of persistence, Ms. Zubulake was able to obtain irrefutable proof that the company’s employees had deleted some relevant emails from their active systems. Although some of the deleted emails were ultimately recovered from backup tapes, there was no way of knowing the full extent of what was deleted. In Zubulake V the court accepted that the company’s employees had willfully destroyed evidence. One of the sanctions imposed was an instruction to the jury hearing the trial that it could draw an adverse inference as to the content of the deleted email in the following terms. If you find that UBS could have produced this evidence, and that the evidence was within its control, and that the evidence would have been material in deciding facts in dispute in this case, you are permitted, but not required, to infer that the evidence would have been unfavorable to UBS. 12 In April 2005, after three-years of litigation, the trial culminated with the jury finding the company discriminated against Zubulake and awarding more than $29 million in damages. In Canada, there are several examples of courts granting a variety of sanctions (including adverse inferences) for spoliation of evidence. Spoliation is the legal term used to describe the destruction or significant alteration of evidence, or the failure to preserve property for another’s use as evidence in pending or reasonably foreseeable litigation13. In a recent decision, Justice Heeney of the Ontario Superior Court relied on the following criteria as the test to establish spoliation: 1. 2. 3. 4. the evidence has been destroyed; the evidence was relevant; the legal proceedings were pending; and the destruction was an intentional act of the party or the party’s agent indicative of fraud or an intent to suppress the truth.14 12 13 Zubulake V, 2004 U.S. Dist. LEXIS 13584 2004 WL 1620866 (S.D.N.Y. July 20, 2004). A copy of Zubulake V is available online at http://www.doar.com/documents/Zubulake.pdf Cheung v. Toyota Canada Inc., (2003), 29 C.P.C. (5th) 267 (Ont. Sup. Ct.) at para. 1 Burrill v. Ford Motor Co. of Canada, [2006] O.J. No. 4059 (Sup. Ct.), citing Dyk v. Protec Automotive Repairs (1997), 151 D.L.R. (4th) 374 (B.C.S.C.) 14 1234 - 13 Other Canadian cases have applied a slightly less rigorous requirement for the fourth requirement, holding that sanctions for spoliation can be imposed if the evidence was destroyed in “bad faith” (e.g. if the party knew about the relevance of the evidence and stood by idly while a third party destroyed it). 15 If an opponent destroys evidence after you send a letter requesting that a litigation hold be put in place, your letter can be a key piece of evidence to establish the destruction was done intentionally or in bad faith. Canadian cases have imposed the following range of sanctions for spoliation: A) Adverse Inferences – Western Tank & Lining Ltd. v. Skrobutan [2006] M.J. No. 357. Evidence that the defendants attempted to destroy evidence of their pre-resignation activities by erasing information from their computers attracted an adverse inference that they were probably involved in the direct solicitation of the plaintiff's customers before leaving the employment of the plaintiff. The court also took the spoliation into account to impose more rigorous injunction prohibitions than it would have normally. B) Imposing fines at the Discovery Stage – Dreco Energy Services Ltd. v. Wenzel, 2006 ABQB 356 (CanLII) Date: 2006-05-12 Docket: 0203 12910. $75,000 fine imposed at the discovery stage for intentional spoliation and issue of adverse inference left to the trial judge. C) Cost Sanctions Werner v. Warner Auto-Marine Inc., (1996) 3 C.P.C. (4th) 110 (Ont. C.A.). The trial judge dismissed the plaintiff’s action and awarded costs against the plaintiff and the plaintiff’s lawyers on a solicitor and client basis, holding that the destruction of physical evidence after a protective order had been issued had “severely prejudiced” the defendants. The Court of Appeal reversed the trial judge’s dismissal of the action, holding that this was excessive, particularly given that the improper actions were directed by the plaintiffs’ insurers and lawyers and not the plaintiffs themselves. However, the cost sanction was allowed to stand, and the plaintiff was not 15 Spencer v. Quadco Equipment Inc. 2005 NBQB 2 (CanLII) Date: 2005-01-05 Docket: S/C/755/00, citing Dawes v. Jajcaj [1995] B.C.J No. 2366 (S.C.) Affirmed [1990] B.C.J. No. 845 (C.A.) and Endean v. Canadian Red Cross Society, (1998), 157 D.L.R. (4th) 465 (B.C.C.A.) 1234 - 14 allowed to rely on destructive tests done in breach of the preservation order. D) Striking out an Expert Report Spencer v. Quadco Equipment Inc. 2005 NBQB 2 (CanLII) Plaintiff prohibited from calling an expert witness at trial or using any expert report which was based on an inspection of the master disconnect switch which was destroyed prior to the commencement of the action. E) Summary Judgment / Claim Dismissed Brandon Heating & Plumbing (1972) Ltd. et al v Max Systems Inc., 2006 MBQB 90 (CanLII) Date: 2006-04-10 Docket: CI 99.02.00265. Claim dismissed at pre-trial stage because the prejudice could not be remedied. Mykle J. "The plaintiff knew from the pleadings that the computer hardware and network operating system were relevant to this action. In fact, the plaintiff was specifically asked, and undertook, to preserve the hardware in the state that it was at the time of the discovery, for the purpose of inspection." (para 26) "The destruction of the hardware required a willful act on the part of the plaintiff, and was a clear breach of the undertaking not to do this until advised as to whether it would be inspected. At the very least, it shows a careless disregard for the undertakings given." (para 27) Because of the severity of the sanctions that can be imposed for spoliation and the increasing occurrences of spoliation claims, it is essential that litigants and their counsel give serious attention to the requirements to preserve evidence in order to 1) avoid engaging in bad behavior that might attract sanctions, and 2) ensure that your opponent pays an appropriate price if it chooses to disregard the rules. 21579083.2 1234 TAB 5 PRIVACY AND E-DISCOVERY Catherine Beagan Flood Associate 416.863.2269 cbe@blakes.com 1234 PRIVACY AND E-DISCOVERY Catherine Beagan Flood* OVERVIEW OF CANADIAN PRIVACY LAWS This paper focuses primarily on the impact of the federal Personal Information Protection and Electronic Documents Act (“PIPEDA” or the “Act”)1 on the collection, use and disclosure of personal information for purposes of e-discovery. However, depending upon the province and industry in which the information is collected and disclosed, other privacy laws may also be relevant. Accordingly, an overview of the major types of Canadian privacy statutes is first set out below. 1. PRIVATE SECTOR DATA PROTECTION LAWS The most significant private sector privacy law in Canada is the federal PIPEDA. As of January 1, 2004,2 the privacy principles set out in PIPEDA apply to every organization3 in respect of personal information that: • • the organization collects, uses or discloses in the course of commercial activities;4 or is about an employee of the organization and that the organization collects, uses or discloses in connection with the operation of a federal work, undertaking or business (such as a bank, airline or telecommunications company).5 * Catherine Beagan Flood is a senior associate in the Litigation Group of the Toronto office of Blake, Cassels & Graydon LLP. She also teaches a course on privacy and access to information law at Osgoode Hall Law School. 1 S.C. 2000, c. 5. 2 PIPEDA came into force in three stages. As of January 1, 2001, PIPEDA applied to: (a) federal works, undertakings and businesses (with respect to both commercial activities and employee information); and (b) transfers of personal information across borders for consideration (Phase I). However, personal health information falling within those two categories was not caught by the Act until January 1, 2002 (Phase II). As of January 1, 2004, PIPEDA now applies fully to the activities discussed in the text (Phase III). 3 “Organization” is defined expansively as including an association, a partnership, a person and a trade union: PIPEDA, s. 2(1). 4 PIPEDA, s. 4(1)(a). 5 PIPEDA, s. 4(1)(b). 1234 -2However, a province that has enacted legislation which is “substantially similar” to PIPEDA may obtain an order from the federal Cabinet exempting collection, use and disclosure of personal information within that province from PIPEDA.6 Quebec,7 British Columbia8 and Alberta9 are currently the only provinces with comprehensive private sector privacy legislation that has been declared to meet the substantial similarity test.10 These provincial statutes are broader in scope than PIPEDA. In particular, unlike PIPEDA, they apply to employee information of provincially-regulated businesses. For constitutional reasons, Parliament can only legislate with respect to employment and labour relations of federal works, undertakings and businesses.11 British Columbia, Alberta and Quebec have all filled this gap in PIPEDA by extending privacy protections to employees in provincially-regulated private sector industries. Other provinces, including Ontario, have chosen not to do so (although employees in provincially-regulated industries in those provinces may have some privacy rights through, e.g., collective agreements or tort law). PIPEDA, s. 26(2)(b). An Act respecting the protection of personal information in the private sector, R.S.Q., c. P-39.1 (the “Quebec Act”). 8 Personal Information Protection Act, S.B.C. 2003, c. 63 (the “B.C. Act”). 9 Personal Information Protection Act, S.A. 2003, c. P-6-5 (the “Alberta Act”). 10 See, e.g. Organizations in the Province of Quebec Exemption Order, SOR/2003-374. “Health information custodians” within the meaning of Ontario’s Personal Health Information Protection Act, 2004, S.O. 2004, c. 3, Schedule A have also been declared exempt from PIPEDA with respect to collection, use and disclosure within the province: Health Information Custodians in the Province of Ontario Exemption Order, SOR/2005-399. British Columbia, Saskatchewan, Manitoba, Quebec and Newfoundland all also have legislation that makes invasion of privacy a tort in certain circumstances. In other provinces, it is not yet clear whether invasion of privacy is a tort at common law. See e.g Somwar v. McDonald’s Restaurants, [2006] O.J. No. 64 (S.C.J.). 11 The restriction of s. 4(1)(b) to federal works, undertakings and businesses is obviously to keep it within Parliament’s constitutional authority. Employment and labour relations generally fall within the provinces’ legislative power over “property and civil rights in the province” (Constitution Act, 1867, s. 92(13)). As Professor Hogg explains in Constitutional Law of Canada, looseleaf ed., vol. 1 (Scarborough: Thomson, 1997) at ss. 21.8(b): “The [Supreme] Court has approached these cases on the basis that provincial competence over labour relations is the rule, and federal competence is the exception. Federal competence exists only where it is found that the work performed by the employees is an integral part of an undertaking within federal jurisdiction, and that finding depends upon ‘legislative authority over the operation, not over the person of the employer’” [footnotes omitted]. The language of s. 4(1)(b) attempts to track this exception, by restricting its application to works, undertakings and businesses that are within Parliament’s legislative competence. See e.g. Toronto Electronic Commissioners v. Snider, [1925] A.C. 396; Commission du salaire minimum v. Bell Telephone Co. of Canada, [1966] S.C.R. 767; Bell Canada v. Quebec (Commission de la santé et de la sécurité du travail), [1988] 1 S.C.R. 749; Ontario Hydro v. (Labour Relations Board), [1993] 3 S.C.R. 327. 7 6 1234 -3It is important to note that even in provinces that have been granted an exemption order on the basis of substantially similar legislation, PIPEDA continues to govern: • extraprovincial or interprovincial collection, use or disclosure of personal information; and • federally-regulated businesses in that province (e.g. banks, telecommunications companies). Where both federal and provincial privacy statutes apply and there is a conflict between them, it is PIPEDA, and not the provincial law, that must be followed, by reason of the constitutional doctrine of federal paramountcy.12 The British Columbia statute goes even further in deferring to PIPEDA - the provincial law specifically states that it does not apply if the federal Act applies to the collection, use or disclosure of the relevant personal information.13 In addition to the comprehensive privacy laws enacted federally and in B.C., Alberta and Quebec, there are also numerous sector-specific privacy laws. For example, Alberta,14 Saskatchewan,15 Manitoba,16 and Ontario17 all have health privacy legislation. Legislation relating to industries or matters that raise particular privacy concerns, such as provincial laws relating to credit reporting,18 frequently include specific privacy protections, many of which pre-date PIPEDA. See e.g., Law Society of British Columbia v. Mangat, [2001] 3 S.C.R. 113; Multiple Access Ltd. v. McCutcheon, [1982] 2 S.C.R. 161. 13 B.C. Act, s. 3(2)(c). 14 Health Information Act, S.A., c. H-5. 15 The Health Information Protection Act, S.S. 1999, c. H-0.021. 16 Personal Health Information Act, C.C.S.M. c. P33.5. 17 Personal Health Information Protection Act, 2004, S.O. 2004, c. 3 (“PHIPA”). PHIPA regulates the collection, use and disclosure of personal health information by both private and public sector “health information custodians” and, to a lesser extent, non-custodians (such as employers) when they receive personal health information from custodians. 18 See e.g. Consumer Reporting Act, R.S.O. 1990, c. C.33. 12 1234 -42. PUBLIC SECTOR DATA PROTECTION LAWS The federal government and almost every province have privacy legislation governing the collection, use and disclosure of personal information held by government agencies.19 In most jurisdictions, such statutes extend privacy rights to public sector employees, with exemptions to prevent such rights from undermining the functioning and accountability of government.20 Moreover, the Canadian Charter of Rights and Freedoms restricts invasions of privacy by the government (including the government as an employer). Section 8 of the Charter, which guarantees “the right to be secure against unreasonable search or seizure” protects a “reasonable expectation of privacy.”21 Section 7 may also protect privacy rights in certain situations. 22 As a result, the government, like private employers, must have privacy protections in place when it conducts electronic surveillance of employees that may later be subject to e-discovery. 19 See e.g. Privacy Act, R.S.C., 1985, c. P-21; Freedom of Information and Protection of Privacy Act, R.S.O. 1990, c. F.31; Municipal Freedom of Information and Protection of Privacy Act, R.S.O. 1990, c. M.56. 20 For example, s. 3 of the Privacy Act excludes from the definition of “personal information”: “(j) information about an individual who is or was an officer or employee of a government institution that relates to the position or functions of the individual including: (i) the fact that the individual is or was an officer or employee of the government institution, (ii) the title, business address and telephone number of the individual, (iii) the classification, salary range and responsibilities of the position held by the individual, (iv) the name of the individual on a document prepared by the individual in the course of employment, and (v) the personal opinions or views of the individual given in the course of employment.” See e.g. Dagg v. Canada (Minister of Finance), [1997] 2 S.C.R. 403; Canada (Information Commissioner) v. Canada (Commissioner of the Royal Canadian Mounted Police), [2003] 1 S.C.R. 66, 2003 SCC 8 (considering the scope of this exclusion). 21 See e.g. Hunter v. Southam Inc., [1984] 2 S.C.R. 145; R. v. Tessling, 2004 SCC 67, [2004] 3 S.C.R. 432. 22 See e.g. Jackson v. Canada (Attorney General), [2006] O.J. No. 3737 (Ont. C.A.), in which the Ontario Court of Appeal refused to strike out a s.7 claim in a class action brought on behalf of all Correctional Services Canada employees working at Joyceville prison. Inmates had obtained an Employee Address Listing that included names and home addresses of the employees. The plaintiffs sought damages for negligence, breach of privacy rights, breach of fiduciary duty and breach of their s. 7 Charter rights. The Court of Appeal overturned a decision striking out the s. 7 claim, holding (at para. 7): “the plaintiffs plead sufficient facts to entitle them to a trial as to whether the private information in question engages s. 7 and whether the level of stress and anxiety engendered by its release rises to the level of ‘serious state imposed psychological stress.’” 1234 -5Moreover, privacy interests and Charter issues are among the reasons that a special procedure (a “Wagg motion”) exists for obtaining disclosure of the Crown brief from a criminal case for purposes of civil litigation.23 3. CRIMINAL LAW Section 184 of the Criminal Code24 makes interception of a private communication without the consent of one of the parties to the communication an offence.25 Section 193 of the Criminal Code further precludes the disclosure of an intercepted private communication, or even the existence thereof. Personal e-mail received at a home e-mail address is a “private communication” for purposes of the Criminal Code.26 The status of personal or business e-mail received at a business e-mail address is less clear.27 As a result, to be prudent, even employers who are not subject to PIPEDA or a provincial privacy law should have clear e-mail monitoring policies in place. If possible, the policy should be part of the terms and conditions of employment, and a signed acknowledgement consenting to the policy should be obtained. Such a policy assists the employer in arguing that: a) its employees’ emails are not “private communications” for purposes of the Criminal Code, because the employees had no reasonable expectation of privacy in See P.(D.) v. Wagg (2004), 71 O.R. (3d) 229 (C.A.). R.S.C. 1985, c. C-46. 25 “Intercept” includes “listen to, record or acquire a communication or acquire the substance, meaning or purport thereof”: Criminal Code, s. 183. “Private communication” means “any oral communication, or any telecommunication, that is made by an originator who is in Canada or is intended by the originator to be received by a person who is in Canada and that is made under circumstances in which it is reasonable for the originator to expect that it will not be intercepted by any person other than the person intended by the originator to receive it, and includes any radio-based telephone communication that is treated electronically or otherwise for the purpose of preventing intelligible reception by any person other than the person intended by the originator to receive it” [emphasis added]: Criminal Code, s. 183. 26 R. v. Weir, [1998] 8 W.W.R. 228 (Alta. Q.B.), aff’d [2001] A.J. No. 869 (C.A.) (QL). 27 In a recent civil case, Denman v. Jamieson, [2006] A.J. No. 316 (Q.B.)(QL), in which the applicant sought an order removing his estranged wife’s counsel from the record where his former spouse had used her knowledge of his password to a business-related e-mail account to access business communications and one solicitor-client communication, the Alberta Court of Queen’s Bench cited Weir and held (at para. 83) that it was “also arguable … that there is a reasonable expectation of privacy in relation to electronic records.” The Court noted (at para. 72): “Business confidences and privacy expectations are not necessarily trivial. Indeed, maintenance thereof may be of great benefit not only to particular persons affected by such confidences but also to the economy, trade and commerce as a whole.” However, that expectation was not comparable to breaching the quasi-constitutional status given to solicitor-client communications (see para. 84). 24 23 1234 -6light of the monitoring policy; and b) the employees consented to the monitoring, which is a specific exception to the offence. It should also be noted that “self-help” by a litigant or potential litigant in relation to another party’s electronic documents may constitute not only interception of private communications, as discussed above, but also unauthorized use of a computer system (s. 342.1 of the Criminal Code, the “anti-hacking” offence) and/or mischief in relation to data (s. 430(1.1)). PRIVACY OBLIGATIONS UNDER PIPEDA The analysis below gives an overview of PIPEDA, the most widelyapplicable privacy law in Canada. It also discusses the exceptions from the general requirement of consent that are most applicable to collection and disclosure of personal information in the context of e-discovery. 1. KEY DEFINITION: “PERSONAL INFORMATION” (a) General Definition “Personal information” is defined expansively, as “information about an identifiable individual, but does not include the name, title or business address or telephone number of an employee of an organization.”28 In short, almost any information that can be attributed to an identifiable individual is caught by the broad definition of “personal information” in PIPEDA. information that is excluded from the definition.29 Even a business e-mail address constitutes “personal information, as it is not one of the listed types of business contact 28 PIPEDA, s. 2(1). Compare Dagg v. Canada (Minister of Finance), [1997] 2 S.C.R. 403 at para. 52, in which Justice La Forest (dissenting, but not on this point) stated with respect to the similar definition in the Privacy Act, R.S.C. 1985, c. P-21, which applies to personal information held by the public sector: “I note that the definition of personal information is deliberately broad. It is entirely consistent with the great pains that have been taken to safeguard individual identity.” 29 Unsolicited e-mail for marketing purposes, PIPEDA Case Summary #297 (1 December 2004) (Privacy Commissioner). 1234 -7in the case of federal works, undertakings or businesses covered under the Act, interpreting personal information so broadly as to encompass work products could have the effect of including under the rubric of personal information about employees such things as letters written by employees in the course of their employment, legal opinions, or reports prepared by employees for use by management. [emphasis added] Information need not be particularly private or sensitive to be caught by the Act.30 PIPEDA protects personal information even when there is no “reasonable expectation of privacy” in that information. PIPEDA is thus much broader than the protection of “private communications” in the Criminal Code or the right to be free from unreasonable search and seizure under s. 8 of the Canadian Charter of Rights and Freedoms. Indeed, even information that is publicly available can fall within the definition of “personal information.” Regulations specify which public information can be collected, used and disclosed without consent, and there are strict limitations even within those regulations.31 For example, information in a publicly-available business or professional directory can only be collected, used or disclosed for purposes that relate “directly to the purpose for which the information appears in the directory.” In Unsolicited e-mail for marketing purposes, PIPEDA Case Summary #297, the Privacy Commissioner concluded that an e-mail address from a law firm’s on-line directory could not be used for marketing purposes without consent.32 The employer had published the directory “with the expectation that businesses, organizations and individuals might contact its staff members to further the employer’s interests,” not to 30 Even information that is publicly available can fall within the definition of “personal information.” Regulations specify which public information can be collected, used and disclosed without consent, and there are strict limitations even within those regulations: Regulations Specifying Publicly Available Information, SOR/2001-7; see also PIPEDA ss. 7(1)(d), 7(2)(c.1) and 7(3)(h.1). 31 Regulations Specifying Publicly Available Information, SOR/2001-7; see also PIPEDA ss. 7(1)(d), 7(2)(c.1) and 7(3)(h.1). 32 Unsolicited e-mail for marketing purposes, PIPEDA Case Summary #297 (1 December 2004) (Privacy Commissioner). The marketer rather foolishly chose privacy law professor and lawyer Michael Geist as a subject of its campaign. 1234 -8enable third parties to send unsolicited marketing e-mails (spam) to its staff. Collection and use of the e-mail address for marketing purposes was thus prohibited by PIPEDA. Furthermore, information does not need to be recorded to fall within the definition of “personal information” in PIPEDA. In his very first PIPEDA decision, then Privacy Commissioner Radwanski considered a complaint against a private security company that had installed surveillance cameras to track the movements and voices of people on Yellowknife's main street as a marketing demonstration, after the City had turned down its offer of “its services as ‘Big Brother’.”33 The video feed was live, not taped. The Commissioner nonetheless concluded that personal information was being collected in violation of PIPEDA, as “[t]he Act does not restrict personal information to information that is recorded.” However, it is important to note that the federal Privacy Commissioner, who oversees compliance with PIPEDA, has interpreted “personal information” as not extending to certain “work product”, on the basis that work product is not “about” the person as an individual.34 In a decision concluding that prescriptions from which patient-specific information has been removed are not a doctor’s personal information, Privacy Commissioner Radwanski stated: in the case of federal works, undertakings or businesses covered under the Act, interpreting personal information so broadly as to encompass work products could have the effect of including under the rubric of personal information about employees such things as letters written by employees in the course of their employment, legal opinions, or reports prepared by employees for use by management. [emphasis added] 33 Video surveillance activities in a public place, PIPEDA Case Summary #1 (15 June 2001) (Privacy Commissioner); News Release, Federal Privacy Commissioner says "no" to Street Surveillance Cameras (20 June 2001) online: http://www.privcom.gc.ca/media/an/nt_010620_e.asp. 34 Selling of information on physicians' prescribing patterns, PIPEDA Case Summary #14 (21 September 2001) (Privacy Commissioner) and Privacy Commissioner releases his finding on the prescribing patterns of doctors, PIPEDA Case Summary #15 (2 October 2001) (Privacy Commissioner). 1234 -9(b) Electronic Documents as Personal Information As noted above, the Privacy Commissioner has concluded that an e-mail address, even a business e-mail address, constitutes “personal information.”35 The contents of a personal e-mail, whether sent or received at home or at work, are clearly also protected by PIPEDA. In contrast, business e-mail may fall within the “work product” exception that the Commissioner has read into the definition of personal information. An IP address is also personal information, if it can be associated with an identifiable individual. The Privacy Commissioner has even found a dynamic IP address that changes each time a user logs on to be personal information, as it can still be associated with a particular individual.36 In contrast, she has concluded that a port address is not linked to identifiable individual, and thus is not personal information.37 Information stored by both permanent38 and temporary39 cookies used to collect information about a computer user also qualify as personal information under PIPEDA.40 2. KEY DEFINITION: “COMMERCIAL ACTIVITIES” There is currently inconsistency in the caselaw on the issue of whether collection of personal information by a private investigator or lawyer for purposes of litigation is a “commercial activity” caught by PIPEDA. Even an IP address is personal information, if it can be associated with an identifiable individual: ISP’s anti-spam measures questioned, PIPEDA Case Summary #319 (8 November 2005) (Privacy Commissioner); see also A broadcaster accused of collecting personal information via Web site, PIPEDA Case Summary #25 (20 November 2001) (Privacy Commissioner) (NETBIOS information constitutes personal information where it “might be used to obtain information traceable to an identifiable individual”). 36 ISP’s anti-spam measures questioned, PIPEDA Case Summary #319 (8 November 2005) (Privacy Commissioner); see also A broadcaster accused of collecting personal information via Web site, PIPEDA Case Summary #25 (20 November 2001) (Privacy Commissioner) (NETBIOS information constitutes personal information where it “might be used to obtain information traceable to an identifiable individual”). 37 Case Summary #319, ibid. 38 Cookies stored indefinitely on a user’s hard drive unless manually deleted. 39 Cookies automatically deleted from a user’s browser upon leaving a website. 40 Customer complains about airline’s use of “cookies” on its Website, PIPEDA Case Summary #162 (16 April 2003) (Privacy Commissioner). 35 1234 - 10 In Ferenczy v. MCI Medical Clinics,41 Justice Dawson of the Ontario Superior Court of Justice concluded that an investigator had not been carrying on a “commercial activity” within the meaning of PIPEDA in the context of the litigation. The issue before the Court was whether video surveillance of the plaintiff should be excluded from evidence on the basis that its creation and/or its disclosure to the defendants’ counsel violated PIPEDA. The plaintiff was suing her doctor for professional negligence. The Canadian Medical Protective Association, an organization involved in retaining counsel and providing defence assistance to physicians who are sued for medical malpractice, had hired a licensed private investigator to conduct surveillance of the plaintiff. Defence counsel applied for leave to adduce a clip from the surveillance that showed the plaintiff engaging in activities that she had testified she was unable to do by reasons of her injuries. Justice Dawson concluded that, even if a violation of PIPEDA had occurred, this would have no direct impact on the admissibility of the evidence in the trial.42 Rather, the plaintiff’s sole recourse for the alleged contravention of the Act was a complaint to the Privacy Commissioner, and potentially a further application to the Federal Court after receiving the Commissioner’s report. However, Justice Dawson went on, in obiter, to conclude that the surveillance had not contravened PIPEDA. The plaintiff argued that the private investigator had been engaged in a commercial activity when he conducted the surveillance, because he was paid for that work. Justice Dawson disagreed, concluding that the investigator was merely an agent for the defendant doctor, who had collected the information for his personal use to defend the lawsuit. This constituted collection, use and disclosure for “personal or domestic purposes,” which are explicitly excluded [2004] O.J. No. 1775 (Sup. Ct.) (QL). Ibid. at para. 15. See also: Cowles v. Balac, [2006] O.J. No. 4177 (C.A.) (breach of Rules of Professional Conduct does not make evidence inadmissible); Osiris Inc. v. 1444707 Ontario Ltd., [2005] O.J. No. 5527 at paras. 83-84 (Sup. Ct.) (reaching the same conclusion), leave to appeal to Ont. Div. Ct. refused without reference to this issue, [2006] O.J. No. 1040 (Div. Ct.) (QL). But see Ross v. Rosedale, [2003] C.L.A.D. No. 237 (QL), in which video surveillance evidence obtained in breach of PIPEDA was excluded from an arbitration. 42 41 1234 - 11 from the scope of PIPEDA.43 Given that the doctor was defending a malpractice claim, the conclusion that the litigation was “personal” is questionable. Nevertheless, the Court’s conclusion that an investigator is an agent for his or her client and can thus benefit from any exception applicable to the client provided significant comfort to lawyers and private investigators that PIPEDA would be less disruptive to collection of personal information for litigation purposes than they had feared. Unfortunately, a recent decision of the Privacy Commissioner has cast doubt on that analysis. In PIPEDA Case Summary #340, the Privacy Commissioner found two law firms who had collected credit reports on opposing parties in litigation or potential litigation without their consent to have breached PIPEDA. In both cases, the law firms had also violated the rules of the credit bureau, which requires express consent to the collection of credit information about individuals, and their membership privileges in the credit bureau were also suspended. In the first case, the credit check was done in relation to possible litigation, presumably to determine whether the potential defendant was judgment-proof. The law firm argued that the Privacy Commissioner had no jurisdiction over the matter, as the firm had been acting as an agent for a client who was collecting the information for personal purposes pursuant to Ferenczy, supra. The Privacy Commissioner rejected this argument, finding that the collection of personal information had occurred in the course of the firm’s commercial activities. She stated that “there was no general exclusion for the activities of law firms undertaken on behalf of their clients,” rejecting the agency analysis adopted in Ferenczy. The firm did not present any evidence that it had obtained consent, and was accordingly found to have contravened PIPEDA. 43 PIPEDA, s. 4(2)(b). The Court further held, in the alternative, that by bringing the lawsuit and putting the extent of her injuries in issue, the plaintiff had given implied consent to the defendant to collect, use and disclose her personal information for purposes of his defence, including conducting surveillance in public places. 1234 - 12 In the second case, the law firm had obtained the credit report to determine whether it was worthwhile to continue to purse a counterclaim in litigation against the complainant. The Privacy Commissioner again found that she had jurisdiction, as the law firm was engaged in commercial activities. The firm argued that it had not needed consent, as s. 7(1)(b) of PIPEDA permits collection of personal information without consent if “the collection is reasonable for purposes related to investigating a breach of an agreement or a contravention of the laws of Canada or a province.” The Privacy Commissioner rejected this argument, finding: “This information was not collected to investigate a breach of an agreement or a contravention of a law of Canada or a province, but rather to determine whether it was worthwhile to counterclaim against the complainant in litigation.” As a result, the second law firm was also found to have violated PIPEDA. It is noteworthy that the second firm appears not to have argued that by bringing litigation in the first place, the complainant had implicitly consented to collection of personal information in connection with any counterclaim, including credit information. It is difficult to predict how the Privacy Commissioner would have ruled on such an argument if it had been advanced. Unfortunately, both firms have decided not to challenge the Privacy Commissioner’s report in Federal Court, which would have resulted in greater clarity. 3. OBLIGATIONS UNDER PIPEDA PIPEDA is an extremely unusual statute in that the heart of the Act is the Canadian Standards Association’s Model Code for the Protection of Personal Information, a self-regulatory code that PIPEDA has now made into law. Schedule 1 of PIPEDA incorporates the CSA Model Code as a whole, and then other sections of the Act modify aspects of the Code. For example, clause 4.3 of the Model Code states: “The knowledge and consent of the individual are required for the collection, use, or disclosure of personal information, except where inappropriate.” Yet, s. 7 of the Act overrides this vague exception, stating: “For the purpose of clause 4.3 of Schedule 1, and despite the note that accompanies that clause, an organization may collect [use or 1234 - 13 disclose] personal information without the knowledge or consent of the individual only if” the requirements of listed, very specific exceptions are satisfied. Similarly, clauses 4.3 and 4.9 of the Code in Schedule 1 contain notes that s. 2(2) of the Act then renders ineffective. The Act must thus be read with particular care. Another exceptional result of incorporating a voluntary code into a statute is that PIPEDA sets out “recommendations” as well as “obligations.” Subsection 5(2) of the Act provides: “The word ‘should,’ when used in Schedule 1, indicates a recommendation and does not impose an obligation.” However, this theoretical distinction has limited practical effect, as an individual can file a complaint with the Privacy Commissioner where an organization fails to follow a “recommendation” in the Code. The Privacy Commissioner’s jurisdiction is not limited to the “obligations” in PIPEDA.44 As a result, an organization may be subjected to negative publicity as a result of an adverse Commissioner ruling for failing to comply with what the Act calls a mere “recommendation.” PIPEDA.45 In light of the foregoing, it is prudent to treat “recommendations” in PIPEDA as if they were mandatory obligations. The CSA Code sets out 10 “fair information practices” which PIPEDA has now made into legal obligations: 1. 2. 3. 4. 5. 6. 44 45 More significantly, the Federal Court’s jurisdiction toward remedies, including damages, extends to some (but not all) of the “recommendations” in Accountability Identifying purposes Consent Limiting collection Limiting use, disclosure and retention Accuracy PIPEDA, s. 11(1). PIPEDA, s. 14(1). It is not yet clear whether the Federal Court will take the recommendation/obligation distinction into account in determining the appropriate severity of the remedy it awards. 1234 - 14 7. 8. 9. 10. Safeguards Openness Individual access Challenging compliance However, the most fundamental of these obligations is that of consent. Personal information can only be collected, used or disclosed without the informed consent of its subject in the limited circumstances described in s. 7. Moreover, there is an overriding restriction contained in s. 5(3) of the Act that applies even if the organization has obtained consent, or a s. 7 exception to the consent principle applies. Subsection 5(3) states: An organization may collect, use or disclose personal information only for purposes that a reasonable person would consider are appropriate in the circumstances. Even explicit consent is insufficient if this reasonableness test is not satisfied. 4. COLLECTION, USE AND DISCLOSURE PERMITTED WITHOUT CONSENT – EXCEPTIONS RELEVANT TO LITIGATION The PIPEDA principle that has the greatest impact on investigations and disclosure in the litigation context is the requirement of consent, as obtaining consent is often impractical. It is thus important to understand the scope of the various s. 7 exceptions to the consent requirement that may be relevant to litigation. (a) Collection and Use to Investigate a Breach of a Law or Agreement The primary exception from the requirement of informed consent in PIPEDA for purposes of facilitating investigations is s. 7(1)(b) of the Act, which permits disclosure if: (i) it is reasonable to expect that the collection with the knowledge or consent of the individual would compromise the availability or the accuracy of the information; and 1234 - 15 (ii) the collection is reasonable for purposes related to investigating a breach of an agreement or a contravention of the laws of Canada or a Province.46 Pursuant to s. 7(2)(d) of the Act, personal information can also be used without consent if it was collected under paragraph 7(1)(b). Similarly, information that the organization originally collected for other purposes can be used for investigative purposes under s. 7(2)(a), which provides: “7. (2) … an organization may, without the knowledge or consent of the individual, use personal information only if: (a) in the course of its activities, the organization becomes aware of information that it has reasonable grounds to believe could be useful in the investigation of a contravention of the laws of Canada, a province or a foreign jurisdiction that has been, is being or is about to be committed, and the information is used for the purpose of investigating that contravention;” The leading decision on the scope of s. 7(1)(b) is the Federal Court’s judgment in Eastmond v. Canadian Pacific Railway.47 CP had installed six digital video recording surveillance cameras in areas of general access and parking at its main rail yard in Toronto. These cameras were fixed (the operator could not change the camera angle), did not have zoom capacity, and automatically recorded for a 48-hour period. The surveillance was not surreptitious; warning signs about the cameras were displayed. At first instance, the Privacy Commissioner had concluded that CP had not established that its purposes for installing these cameras could be justified under PIPEDA, and they should be removed. The Federal Court disagreed, concluding that CP’s surveillance was appropriate under PIPEDA. The Court adopted the following four-part test:48 • 46 Is the measure demonstrably necessary to meet a specific need? Such laws include the common law. See Ferenczy, v. MCI Medical Clinics, [2004] O.J. No. 1775 at para. 33 (Sup. Ct.) (QL), discussed in detail supra. 47 [2004] F.C.J. No. 1043 (F.C.) (QL). 48 Ibid. at paras. 13, 127. 1234 - 16 • • • Is it likely to be effective in meeting that need? Is the loss of privacy proportional to the benefit gained? Is there a less privacy-invasive way of achieving the same end? In determining that a reasonable person would consider CP’s purposes for conducting the surveillance appropriate in the circumstances (such that it was not precluded by s. 5(3) of PIPEDA), the Federal Court gave weight to the following factors:49 • • • • • the cameras were located to capture only images in public places; the surveillance was not surreptitious; the surveillance was not continuous; it only collected a person’s image when he or she was within the footprint of the camera; the information was collected for security purposes, and not to assess employees’ work performance; “[m]ore importantly,” the recorded images were kept under lock and key. The recordings were never viewed unless an incident to which they might be relevant was reported, and even then were only accessed by responsible managers and CP police. If the recording did not contain images of incidents that required investigation, they were destroyed within 96 hours. CP had established a legitimate need to have the within cameras installed where they were and to record the persons who passed its fixed footprints. CP had identified numerous past security incidents which justified the need to have surveillance cameras. The Court concluded that the cameras were useful both as a tool for investigation and to deter further theft, vandalism and trespassing and thereby enhance the security of CP’s employees and its goods. CP had considered alternatives to surveillance, such as fencing and the use of security guards. The Court accepted CP’s evidence that such alternatives were not cost-effective or would disrupt its operations. • • 49 Ibid. at paras. 174-82. 1234 - 17 The Federal Court further concluded that CP did not need its employees’ consent to collect information from the recordings. No one monitored the cameras while they were capturing individuals’ images. The tapes were only viewed if and when an incident had been reported, and were destroyed without viewing within 96 hours if no reports were made. As such, the court treated the subsequent viewing, and not the recording of the tapes, as the relevant “collection of information.” Viewing the tapes after a security incident had been reported fell within the s. 7(1)(b) exception to the consent principle. The Court noted:50 Assuming the recording captured an individual committing an act of theft asking for his/her permission to collect the information would compromise the availability of the information for the purpose of investigation. This interpretation does not strain the purposes of the exemption in s. 7(1)(b). Clearly, the exemption would apply if a CP official had monitored and recorded live a person attempting to commit a crime. The same result should apply if monitoring is delayed as is the case here. In contrast, the Federal Court referred extensively, apparently with approval, to Adjudicator Brunner’s decision in Ross v. Rosedale Transport Ltd.,51 in which he concluded that a video surveillance tape was inadmissible in an arbitration, because it had been collected in violation of PIPEDA. The employer had hired private detectives to conduct surreptitious video surveillance, outside the workplace, of an employee whom they suspected was defrauding the company by abusing disability benefits. The employee claimed that he was unable to return to work due to a workrelated back injury, yet he was caught on video lifting and carrying furniture. The adjudicator concluded that the surveillance was not reasonable under s. 7(1)(b) of PIPEDA, because the employer lacked reasonable grounds to believe the employee was malingering at the time that it hired the private detectives. He noted: 50 51 Ibid. at paras. 189-90. [2003] C.L.A.D. No. 237 (QL) 1234 - 18 In the instant case, there was absolutely no evidence that Ross had ever been anything other than an honest employee. He had no disciplinary record. He had never submitted a false or fraudulent claim for insurance or other benefits. There were a number of other means that were available to the employer to test the true extent of Ross’ restrictions and the bona fides of his recovery … If the employer really thought that Ross was malingering or pretending that he was not yet fully able to resume the duties of a driver/associate, it was open for Rosedale to ask for an independent medical examination a matter that was conceded by Topping. His failure to do so was left unexplained. This is a case, where an employer, without any evidence that the employee was malingering or had made misrepresentations or spread disinformation as to his physical abilities, orders a surreptitious video surveillance in the hope of trapping the unsuspecting employee during the course of moving furniture at his place of residence at a time and place that he had voluntarily disclosed to his employer. In this respect, the words of Arbitrator M. G. Picher in Canadian Pacific Ltd. and Brotherhood of Maintenance of Way Employees, (supra), are very appropriate: ‘as a general rule, (the employer’s interests) does not justify resort to random video surveillance in the form of an electronic web, cast like a net, to see what it might catch. Surveillance is an extraordinary step which can only be resorted to where there is, beforehand, reasonable and probable cause to justify it. What constitutes such a cause is a matter to be determined on the facts of each case.’ [emphasis added] Although these cases dealt with video surveillance, rather than e-mail surveillance, the same general principles would apply where, for example, an employer retains a forensic investigator to review an employee’s hard drive for evidence of fraud or other illegal activities. Just as the warning signs about video surveillance were taken into account in Eastmond, supra, the existence, clarity, prominence and breadth of dissemination of an employer’s e-mail monitoring policy will be relevant. Moreover, the strength of the employer’s grounds for suspecting illegal activity or breach of an agreement before initiating the investigation will be scrutinized, as in Rosedale. 1234 - 19 (b) Disclosure to, or by, an “Investigative Body” PIPEDA permits disclosure without consent to or by an “investigative body” if that disclosure is: 7(3)(d) made on the initiative of the organization to an investigative body, a government institution or a part of a government institution and the organization has reasonable grounds to believe that the information relates to a breach of an agreement or a contravention of the laws of Canada, a province or a foreign jurisdiction that has been, is being or is about to be committed, or suspects that the information relates to national security, the defence of Canada or the conduct of international affairs … (h.2) made by an investigative body and the disclosure is reasonable for purposes related to investigating a breach of an agreement or a contravention of the laws of Canada or a province. Moreover, s. 7(1)(e) of PIPEDA permits an organization to collection information without consent for purposes of making a disclosure under s. 7(d)(ii). There were initially only two “investigative bodies” for purposes of PIPEDA, the Insurance Crime Prevention Bureau of the Insurance Council of Canada and the Bank Crime Prevention and Investigation Office of the Canadian Bankers Association. The list of designated investigative bodies has now been expanded to include:52 a corporation or other body (i) that is licensed by a province to engage in the business of providing private investigators or detectives and that has a privacy code that is compliant with the Canadian Standards Association Standard CAN/CSA-Q830-96, Model Code for 52 Regulations Specifying Investigative Bodies, SOR/2001-6, s. 1(w). 1234 - 20 the Protection of Personal Information, as amended from time to time; and (ii) that is a member in good standing of a professional association that represents the interests of private investigators or detectives and that has such a privacy code; While the exemptions quoted above help facilitate investigations by qualified private investigators, it is important to note that there is no parallel exemption for collection or use of information by an investigative body without consent. For the most part, an investigative body must rely on ss. 7(1)(b), (2)(a) and (2)(d), like any other organization, when collecting and using personal information for investigative purposes.53 In B.M.P. Global Distribution Inc. v. Bank of Nova Scotia (c.o.b. Scotiabank),54 the Bank of Nova Scotia (“Scotiabank”)’s failure to use its designated investigative body to handle all aspects of an investigation exposed it to liability. The British Columbia Supreme Court awarded $2,500 in damages against Scotiabank for disclosure of information to the Royal Bank of Canada (“RBC”) about the business and personal accounts of the principals of a corporate accountholder that had deposited a counterfeit cheque. Corporate security officers of banks who are designated officers of the Bank Crime Prevention and Investigation Office (“BCPIO”) are permitted by PIPEDA to share information with their counterparts at other banks pursuant to s. 7(3)(d) and (h.2) of PIPEDA. However, the Court concluded that Scotiabank could not rely on this exception, as it had not established that either the Scotiabank personnel who disclosed the information, or the RBC personnel who received it were BCPIO officers. The Court concluded that Bank of Nova Scotia had breached both the British Columbia Privacy Act, which makes breach of privacy a tort, and its common law duty of confidentiality. 53 Note the discussion above regarding the inconsistency between Ferenczy, supra and Privacy Commissioner Case Summary #340 on the issue of whether a private investigator is an “agent” able to rely upon exemptions applicable to his or her client. 54 [2005] B.C.J. No. 1662 (S.C.). 1234 - 21 The Federal Court of Appeal’s decision in BMG Canada Inc. v. John Doe is also instructive.55 In that case, investigators hired by the Canadian recording industry had gathered evidence of alleged copyright infringement by 29 individuals who had each downloaded more than 1000 songs through peer-to-peer file sharing programs, including the IP addresses of the alleged infringers. The record companies sought production of the infringers’ identities from their Internet service providers. The Court concluded that the applicants had not put forward sufficient evidence to justify a production order. The Court also noted: “Pursuant to PIPEDA, ISPs are not entitled to ‘voluntarily’ disclose personal information such as the identities requested except with the customer’s consent or pursuant to a court order.”56 While the Court indicated that privacy would yield to intellectual property rights on proper evidence, it also noted: “caution must be exercised by the courts in ordering such disclosure, to make sure that privacy rights are invaded in the most minimal way.”57 It noted with respect to the investigation preceding a request for an order:58 Also, as the intervener, Canadian Internet Policy and Public Interest Clinic, pointed out, plaintiffs should be careful not to extract private information unrelated to copyright infringement, in their investigation. If private information irrelevant to the copyright issues is extracted, and disclosure of the user's identity is made, the recipient of the information may then be in possession of highly confidential information about the user. If this information is unrelated to copyright infringement, this would be an unjustified intrusion into the rights of the user and might well amount to a breach of PIPEDA by the ISPs, leaving them open to prosecution. Thus in situations where the plaintiffs have failed in their investigation to limit the acquisition of information to the copyright infringement issues, a court might well be justified in declining to grant an order for disclosure of the user's identity. [emphasis added] 55 56 [2005] 2 F.C.R. 81 (C.A.). Ibid. at para. 37. 57 Ibid. at para. 42. 58 Ibid. at para. 44. 1234 - 22 (c) Disclosure Pursuant to a Subpoena, Warrant or Rules of Court The most significant disclosure exemption relevant to litigation is s. 7(3)(c) of PIPEDA, which provides:59 ... an organization may disclose personal information without the knowledge or consent of the individual only if the disclosure is (c) required to comply with a subpoena or warrant issued or an order made by a court, person or body with jurisdiction to compel the production of information, or to comply with rules of court relating to the production of records; Paragraph 7(3)(c) of PIPEDA, in conjunction with the rules of court requiring production of relevant documents and discovery of relevant information, thus enables litigants to disclose other individuals’ personal information without their consent in the formal discovery process, so long as the “semblance of relevance” test is met. The courts have been reluctant to allow parties to litigation to use PIPEDA as a shield from their disclosure obligations. In Lisozzi v. Bell Distribution Inc., for example, Master Polika dealt with the question of whether an employer defending a wrongful dismissal action had to produce a document that set out past and current salary information and employee ratings for every employee in the plaintiff’s department. edited version of the document. The employer had only produced an All of the particulars relating to the plaintiff were disclosed in the edited version; however, the names and some of the salary information about her fellow employees had been blacked out. The employer argued that the severed information was not relevant and that PIPEDA precluded the company from producing personal information of its employees. See also B.C. Act, s. 18(i); Alberta Act, s. 20(e), Quebec Act, s. 18(6) (disclosure without consent is permitted “to a person or body having the power to compel communication of the information if he or it requires it in the exercise of his or its duties or functions”). 59 1234 - 23 Master Polika concluded that the entire document met the semblance of relevance test for production and that Bell had to produce it in full. He further held that PIPEDA does not set up a claim of privilege that can be used to justify not producing a relevant document. In particular, he considered the exception in section 7(3)(c) of PIPEDA, and concluded that the disclosure and inspection of documents under the Ontario Rules of Civil Procedure qualify as disclosure that is “required to comply with rules of court relating to the production of records” and is thus permitted without consent. The Lisozzi decision confirms that when personal information is truly relevant to an action, a party cannot hide behind PIPEDA as justification for not disclosing it.60 Obviously, the central question in each case will be whether the personal information meets the semblance of relevance test. However, that is not always an easy test to apply. In the past, if a document was close to the line and not prejudicial to a client, there was no downside to erring on the side of disclosure. That is no longer the case. Now, erring on the side of producing a document will result in a breach of PIPEDA, if the personal information is ultimately found not to be relevant. Moreover, the ruling on whether the judgment call regarding relevance was correct may be made by the Privacy Commissioner, rather than by a court. PIPEDA Case Summary #96 suggests that the Commissioner will not hesitate to second-guess counsel and find that privacy has been violated.61 In that case, he concluded that credit card statements showing the expenses of one spouse were not relevant to a divorce action. 60 See also: Clustercraft Jewellery Manufacturing Co. Ltd. v. Wygee Holdings, Ltd., [2004] O.J. No. 2877 (Sup. Ct.); International Brotherhood of Electrical Workers, Local 213 and 258 v. BCT.Telus Comminications Inc., [2002] B.C.J.. No. 918 (S.C.) (QL); Individual alleged that former employer disclosed personal information without consent, PIPEDA Case Summary #143 (6 March 2003) (Privacy Commissioner). 61 Bank improperly disclosed personal information; exception under section 7(3)(c) rejected, PIPEDA Case Summary #96 (3 December 2002) (Privacy Commissioner). 1234 - 24 Accordingly, where the issue is not clear, an agreement with opposing counsel not to exchange personal information that is not clearly relevant, or directions of the court, should be obtained. Indeed, in Reischer v. Love, the British Columbia Supreme Court recently gave a “cautionary warning” that while the common law allows a party to interview potential witnesses before trial:62 …provincial and federal privacy legislation may affect this process in the absence of a court order. A defendant who wishes to interview potential witnesses without first obtaining an order should examine the provisions of [relevant provincial law and PIPEDA]. Where disclosure is sought pursuant to a subpoena, warrant or other production order, one issue that may arise is whether the order was issued by a “body with jurisdiction to compel the production of information.” In PIPEDA Case Summary #96,63 the Privacy Commissioner held that a bank breached PIPEDA in disclosing credit card statements to a divorce lawyer representing the cardholder’s ex-wife, even though the bank had been served with a subpoena for the documents. The complaint under PIPEDA succeeded on a very narrow point. Quebec’s rules of civil procedure allow a lawyer to issue a subpoena, but only a court can compel the production of information. By disclosing personal information in response to a subpoena that had not been issued by a person who had the jurisdiction to compel production, the bank breached PIPEDA. The same issue arises if the relevant subpoena or order is from a foreign court or body. The Privacy Commissioner has stated that such orders are not sufficient to justify disclosure under s. 7(3)(c) of PIPEDA:64 If the organization in the foreign country has a related organization in Canada that holds personal information about Canadians in Canada, an order by a foreign court 62 63 [2005] B.C.J. No. 865 at para. 29 (S.C.) (QL). Bank improperly disclosed personal information; exception under section 7(3)(c) rejected, PIPEDA Case Summary #96 (3 December 2002) (Privacy Commissioner). 64 Office of the Privacy Commissioner of Canada, “Transferring Personal Information about Canadians Across Borders – Implications of the USA PATRIOT Act” (18 August 2004) at 9-10. 1234 - 25 cannot compel the disclosure of information that is held in Canada. This organization in Canada will be subject to PIPEDA or its provincial equivalent. It is not bound by the order made in the foreign country. Furthermore, it has an obligation under PIPEDA to take appropriate security measures to prevent the unauthorized disclosure of the personal information it holds. This may mean employing technical measures to prevent its related organization in the foreign country from inappropriately getting access to the personal information held in Canada. [Emphasis in original.] A party trying to enforce a foreign production order in Canada must seek letters of request in a Canadian court or, if a potential offence within the meaning of the Canada-U.S. Mutual Legal Assistance Treaty (“MLAT”) is in issue, must seek the assistance of the Canadian Department of Justice under that treaty. The Privacy Commissioner has stated that s. 7(3)(c) of PIPEDA will permit disclosure, if an order under MLAT has been obtained, as the order is obtained from a Canadian court under Canadian legislation that implements the MLAT.65 There has also been some doubt about the extent to which s. 7(3)(c) applies to alternative dispute resolution. Nation, 66 However, in Paley v. Fishing Lake First the Federal Court held that even if s. 7(3)(c) did not technically apply in an arbitration, an arbitrator’s powers under the Canada Labour Code made disclosure pursuant to an arbitral order disclosure “required by law” under s. 7(3)(i), permitting disclosure without consent. 67 If an enforceable warrant or order or received, it is important to review it very carefully to identify the scope of disclosure that it requires (and thus justifies under s. 7(3)(c) of PIPEDA). Care should be taken not to produce documents beyond what is Ibid. at 6. [2005] F.C.J. No. 1772 at para. 17 (F.C.) (QL). 67 See also: Employer accused of wrongful disclosure, PIPEDA Case Summary #198 (1 August 2003) (holding that arbitrators under the Canada Labour Code, have the power to compel the production of information, such that their orders fall within s. 7(3)(c), but noting that “counsel must seek permission and obtain an order from the arbitrator prior to disclosing personal information. In the context of labour arbitration, if an order is not sought from the arbitrator, consent from the witness should be obtained.”) 66 65 1234 - 26 required by the warrant. Similarly, information should not be disclosed in response to a mere threat to obtain a warrant, in advance of actually receiving it, unless some other exception to the consent requirement in PIPEDA applies. 2. Enforcement of PIPEDA The discussion below is an overview of the implications of breaching PIPEDA by, for example, disclosing personal information without consent in circumstances not caught by any of the s. 7 exceptions. (a) The Privacy Commissioner of Canada The first level of enforcement is the office of the Privacy Commissioner of Canada, an independent ombudsman who reports to the Parliament of Canada. Under PIPEDA, the Privacy Commissioner must investigate complaints brought by individuals, and may also initiate a complaint on her own.68 The Commissioner has broad investigative powers, including powers to enter corporate premises, and to summon witnesses. The Commissioner can mediate disputes. The Commissioner must prepare a report within a year of the complaint, setting out her findings and recommendations. The Commissioner also has the power to conduct compliance audits.69 She may audit the personal information practices of any organization, if she has reasonable grounds to believe it is contravening the Act. The Commissioner can also make public any information relating to the personal information practices of an organization.70 The Act uses the spectre of bad public relations to encourage organizations to comply with the Act. However, beyond drumming up bad publicity, the Privacy Commissioner has relatively little enforcement power. Her reports and recommendations do not constitute binding orders. Even the Supreme Court of Canada has recently described the Privacy Commissioner (and the 68 69 PIPEDA, Division 2. PIPEDA, Division 3. 70 PIPEDA, s. 20(2). 1234 - 27 Information Commissioner) as being “of little help because, with no power to make binding orders, they have no teeth.”71 Federal Court of Canada If certain obligations under PIPEDA have been breached,72 either the individual or the Privacy Commissioner can apply to the Federal Court for a hearing. The Federal Court can: (1) order correction of the organization’s practices; (2) order publication of notice of any action ordered and (3) award damages, including damages for an individual’s “humiliation,” resulting from an organization’s failure to comply with the Act.73 If there are a large number of complainants, such awards could add up to a significant amount. Offences It is an offence under the Act to knowingly fail to retain personal information that is the subject of an individual’s access request.74 It is also an offence to seek retribution against an employee who is a “whistle-blower” or who refuses to contravene the Act. Finally, it is an offence to obstruct the Privacy Commissioner’s investigation of a complaint or audit. The offences are punishable on summary conviction with fines up to $10,000 and as indictable offences with fines up to $100,000. 21575142.3 71 72 H.J. Heinz Co. of Canada Ltd. v. Canada (Attorney General), 2006 SCC 13 at para. 35. PIPEDA, s. 14(1). Certain obligations under the Act constitute grounds for a complaint to the Privacy Commissioner, but cannot form the basis for a Federal Court hearing. 73 PIPEDA, s. 16. 74 PIPEDA, s. 28. 1234 TAB 6 ABOUT BLAKES Who We Are Blake, Cassels & Graydon LLP (Blakes) is one of Canada's leading business law firms with more than 500 lawyers in offices in Montréal, Ottawa, Toronto, Calgary, Vancouver, New York, Chicago, London and Beijing. Our integrated office network gives clients access to the full spectrum of capabilities found throughout the Firm. Whether an issue is local or multi-jurisdictional, practice-area specific or cross-disciplinary, Blakes can provide solutions at every level. Blakes has been part of new economies since 1856. We are proud of our 150-year history and the role we have played in helping clients prosper during that period of tremendous economic and social change. We understand that our continued success depends on our ability to meet the needs of clients both today and tomorrow. What We Do Blakes provides guidance and expertise in virtually every area of business law to a diverse national and international base of clients. Thanks to these clients and the challenging legal work they generate, Blakes is recognized as one of Canada’s pre-eminent law firms. Many of our lawyers are leaders in their respective fields, evidenced by the fact that Blakes lawyers are continually "recommended" in The Canadian Legal Lexpert Directory (Canada's leading guide to lawyers) in almost every category of law. In 2005 Blakes ranked number one in the Bloomberg 2005 Q1, Q2, and Q3 Global Legal Mergers & Acquisitions Rankings, as legal adviser in terms of deal volume and market share for Canadian announced deals. For the first three quarters of 2006, Blakes has ranked in the top two firms on the Bloomberg and Thomson Financial M&A league tables in terms of number of deals for Canadian announced transactions. Our clients include some of the best-known, and soon-to-be-known names in business, ranging from major corporations and financial institutions to start-ups in manufacturing and knowledge-based industries. To better serve this broad client base, we continue to develop industry-specific teams that combine leading-edge experience with industry acumen. Montréal Located in the downtown core, the Montréal office was established in the fall of 2001 and is staffed by practitioners who are recognized leaders in their fields of expertise. In addition to advising a local base of clients in Quebec, our Montréal lawyers also assist Blakes clients across Canada, the U.S. and China in managing their business interests in Quebec. The scope of the Firm's practice in Montréal is predominantly corporate/commercial law with emphasis on banking, financial services, securities, mergers and acquisitions, restructuring, real estate, infrastructure (public-private partnerships), energy, project finance, taxation, intellectual property and information technology. Ottawa Our office in Ottawa is one of the finest law practices in the nation's capital. We offer full-service business law for local, national and international clients. Practice areas and industry experience in the Ottawa office include corporate/commercial, securities, intellectual property and technology, 1234 ABOUT BLAKES government procurement, commercial real estate, civil litigation, telecommunications, oil and gas, tax, banking, insolvency and administrative law. Two of the great strengths of the Ottawa office are the reputation of its lawyers in the local community and their expertise in all areas of law affecting business clients. Toronto Located in the heart of the city’s financial district, the Toronto office provides legal expertise in virtually every area of business law. We have the scope and flexibility to meet the demands of the most sophisticated Canadian and international clients. Because of our experience, we have the resources to provide dedicated client-service teams to each and every client. In addition to our practice capabilities, the Firm maintains a comprehensive database of precedents and has one of the largest specialized legal libraries in Canada. This ensures our clients receive the most up-to-date, sophisticated legal advice, anywhere. Calgary Our Calgary office has acted on some of the largest and most complex transactions in Western Canada requiring expert legal advice, sensitivity to clients' business objectives and a co-operative team approach. With a complement of more than 90 lawyers and 130 support staff in Calgary, we have the depth, experience and resources to provide timely strategic legal services for all types of business transactions and disputes. The diversified economy of Alberta has enabled the Calgary office to develop a broad business law practice including corporate/commercial, securities, structured finance, private and public debt, banking, general commercial, real estate, civil litigation, commercial dispute resolution, labour and employee benefits, administrative, oil and gas, environmental and tax. Vancouver Our office in Vancouver is one of the leading business law firms in British Columbia. With more than 50 lawyers, the Vancouver office advises British Columbia corporations and major Canadian international corporations with west coast interests on a broad range of business issues including corporate and commercial matters, securities, financial services, real estate, tax, mining, forestry and natural resources, government, environmental, First Nations and labour and employment. The office also boasts a strong litigation practice, with particular emphasis on corporate and commercial matters, construction law, First Nations litigation, insolvency and administrative matters. New York We opened our New York office in 2004 to assist U.S.-based clients wishing to conduct business in Canada, whether by building, investing in, or acquiring and operating Canadian businesses. We also assist our Canadian clients conducting business in the U.S., including facilitating access to the U.S. capital markets. Our New York office maintains a corporate finance, mergers and acquisitions, securities regulation and tax practice providing Canadian legal advice to U.S. and international corporations, financial institutions, venture capital and private equity investors, investment dealers and professional advisers. 1234 ABOUT BLAKES Chicago We opened our Chicago office in 2004 to provide Canadian legal advice to U.S.-based clients doing business in Canada. The Chicago office also assists our Canadian clients conducting business in Chicago, the Midwest and throughout the U.S. Blakes is the only Canadian law firm to have opened an office in Chicago. We believe this demonstrates our strong commitment to our clients in Chicago and the Midwest. The Chicago office maintains an active cross-border mergers and acquisitions, corporate finance, securities regulation, financial services and restructuring practice providing Canadian legal advice to U.S. and international corporations, financial institutions, private equity and venture capital firms, investment dealers and professional advisers. London Our London office advises Canadian clients with interests in the U.K., Europe and emerging markets. The London office is well known for its representation of corporations in the high technology, oil and gas and mining sectors. In addition, lawyers in the London office assist businesses considering Canadian acquisitions, joint ventures and financings, as well as advising on all aspects of Canadian competition, tax, securities, trade and business law. Beijing Blakes is one of only two Canadian national law firms with an office in Beijing. Blakes officially opened its Beijing office in October 1998. Our China Practice Group, made up of three lawyers in our Beijing office and a team of lawyers in Canada, is able to advise clients on a variety of aspects of doing business in China including establishing representative offices, structuring and documenting joint ventures and wholly owned foreign enterprises, conducting due diligence, arranging intellectual property protection and assisting in dispute resolution. Blakes is also a member of the China Alliance, a unique arrangement established with three leading U.S. independent law firms in response to the increasing importance of China to the global marketplace and to North American businesses. The four law firms have agreed to collaborate in the development of their respective China practices, thereby enhancing their ability to serve the needs of clients in the rapidly developing China market. Office facilities in Shanghai and Beijing offer clients on-the-ground capabilities in China's primary business and regulatory centres. Professional Affiliations Our international capabilities have been enhanced by our charter membership in Lex Mundi, the world's leading association of independent law firms with member firms in 160 jurisdictions. Blakes is an advisory member of TechLaw Group, Inc., an international network of 19 law firms in 26 countries, whose primary mission is to advance clients' interests in all areas of technology-related business. Blakes is also a member of the China Alliance, an arrangement with three leading independent U.S. law firms with growing practices in China's business and regulatory centres. With clients doing business with customers worldwide, we are able to arrange superior legal counsel virtually anywhere as needed. 1234 TAB 7 BLAKES B L A K E , C A S S E L S & OVERVIEW National Litigation Group G R A Y D O N L L P Blakes National Litigation Group is one of the largest and most successful litigation and dispute resolution practices in Canada. We have represented national and international clients in difficult and complex commercial disputes of every kind, in virtually every forum across the country. experience in choice of law/venue issues, taking evidence for foreign proceedings and enforcement of foreign judgements. Our litigation lawyers regularly appear in the Supreme Court of Canada on cases at the forefront of developments of Canadian law. DISPUTE RESOLUTION WHO WE ARE Our Litigation Group has a well-founded reputation for excellent advocacy, practicality, sound judgment, professionalism and integrity. Blakes litigation practice is complemented by the expertise and strength of lawyers in all departments of the Firm across the country. Our litigators are consistently ranked in the highly recommended categories and as leading lawyers in The Canadian Legal Lexpert Directory, Chambers Global, The International Who’s Who of Business Lawyers and other peer rankings. Blakes resources include excellent paralegal support and up-to-date technology to assist with document organization and production, and any other aspects of dealing with the litigation process. In addition, our litigators regularly consult other lawyers in the Firm for specialized and cost-effective input on cross-disciplinary issues that arise in complex litigation. With the Firm's breadth of expertise and experience, and its national and international presence, it is well suited to effectively manage complex litigation for all of our clients. We are counsel on leading cases in class action, corporate, banking, commercial, securities, shareholder remedies, product liability, competition, constitutional, insolvency, white collar crime, real estate, construction, and aboriginal rights litigation, to name just some of our leading practice areas. Our international litigation practice includes considerable Blakes approach to dispute resolution focuses on understanding our clients' businesses and objectives, and providing pragmatic advice and cost-effective representation. We explore the most appropriate method of dispute resolution and develop the best solution to achieve our clients' objectives. We litigate aggressively on their behalf or adopt other techniques as appropriate. We also have extensive experience in domestic and international commercial arbitration under the rules of all major arbitral institutions including the International Chamber of Commerce, the London Court of International Arbitration and the American Arbitration Association, as well as before arbitral bodies established under Canadian provincial arbitration statutes and self regulatory organizations. Our lawyers act as counsel in disputes and as arbitrators. Blakes arbitration practice encompasses a broad range of matters including general commercial arbitrations, insurance coverage disputes, labour & employment and energy & oil and gas disputes. Blakes also has considerable experience in international and domestic mediation. Blake, Cassels & Graydon LLP (Blakes) is one of Canada's leading business law firms with over 500 lawyers in offices in Montréal, Ottawa, Toronto, Calgary, Vancouver, New York, Chicago, London and Beijing. Our integrated office network gives clients access to the full spectrum of capabilities found throughout the Firm. Whether an issue is local or multi-jurisdictional, practice-area specific or cross-disciplinary, Blakes can provide solutions at every level. CONTACT DETAILS Montreal Office Robert Torralbo - 514.982.4014 robert.torralbo@blakes.com Ottawa Office Gord Cameron - 613.788.2222 gord.cameron@blakes.com Toronto Office Mary Jane Stitt - 416.863.2940 maryjane.stitt@blakes.com Calgary Office Ken Mills - 403.260.9648 ken.mills@blakes.com Vancouver Office Bill Kaplan - 604.631.3304 bill.kaplan@blakes.com or visit our Web site at www.blakes.com M A Y 2 0 0 6 M O N T R É A L O T T A W A T O R O N T O C A L G A R Y V A N C O U V E R N E W Y O R K C H I C A G O L O N D O N B E I J I N G TAB 8 Joel Richler Partner, Toronto Office Telephone 416-863-2735 Facsimile 416-863-2653 jr@blakes.com Areas of Practice Litigation Alternative Dispute Resolution Construction Information Technology Procurement Class Actions Profile Joel Richler is a senior member and past Co-chair of the Litigation Group (1998-2003) of the Toronto office. His practice is devoted to all aspects of commercial litigation, and he has, since 1980, acted in a wide variety of commercial matters, including many trials, appeals, arbitrations and mediations. Joel is a founding fellow of the Canadian College of Construction Lawyers, a "by invitation only" professional association of Canada's leading construction lawyers. Joel is certified by The Law Society of Upper Canada as a specialist in civil litigation. He has practised before all levels of the courts in Ontario and New Brunswick, including trial and appellate courts, the Federal Court of Canada, the Federal Court of Appeal and the Supreme Court of Canada. In addition, Joel has appeared before many administrative tribunals, including the Canadian Human Rights Commission, The Law Society of Upper Canada, the Canadian International Trade Tribunal, the Canadian Institute of Actuaries, the Ontario Racing Commission and the Commercial Registration Appeal Tribunal. Joel's practice is wide ranging. He has handled cases involving contract disputes, product liability, shareholders' rights, technology and software disputes, construction, professional liability and many other areas. Joel is cited in The Canadian Legal Lexpert Directory 2006 as a leading practitioner in corporate commercial litigation, construction law, securities litigation and professional liability law. He is cited in The Best Lawyers in Canada 2006 in corporate and commercial litigation, directors and officers liability, legal malpractice law and construction law. He has an AV rating in Martindale-Hubbell and is ranked in Chambers Global: The World's Leading Lawyers for Business 2006. Joel is an active trial advocate and his opinion evidence as an expert in trial practice has been accepted by an Ontario trial court. Relevant Experience Recently, Joel led the successful defence of an oppression claim dealing with the rights of convertible debenture holders in the context of a hostile take-over bid of a public company, and he was successful in recovering an international arbitration award of more than USD 90 million in a claim involving complex software licensing and copyright infringement issues. Currently, Joel is plaintiff's counsel in a multimillion dollar product liability and construction claim on behalf of a major steel manufacturer. Joel is also acting as counsel in several class actions (one involving international recognition issues and two involving complex pension matters). Completed cases of significance include the following: Casurina v. Rio Algom - Successful defence of an oppression claim made by holders of convertible debentures arising from the hostile take-over of Rio Algom. Ziegler v. Sherkston Shores - Successful defence of a class action involving the scope of the landlord and tenant and rent control legislation in Ontario, in relation to commercial campgrounds and trailer parks. The case, in which more than CAD 5 million was claimed, was dismissed on summary application at the motion for certification. Halifax Shipyard v. Minister of Public Works - Successful defence of a judicial review application seeking to overturn the award of a CAD 35-million naval contract. Martin v. Artyork - Successful appeal to the Supreme Court of Canada on behalf of an investor seeking to enforce the statutory indoor management rule by suing a company on an instrument forged by a dishonest director. Carosi Construction v. Niagara Region - Successful defence of a claim arising from procurement of two construction contracts. Bemar v. Toronto Transit Commission - Defence and settlement of complex construction contract and performance claims. Hackman v. HAS Novelties - Successful resolution of a shareholders dispute in a privately held corporation, using the oppression remedy and winding-up provisions of the Business Corporations Act (Commercial List). Bronfman v. TaxSave Consultants - Defence of claims relying on the oppression remedy and windingup provisions of the Business Corporations Act. Poretti v. Canada Packers - Represented senior executives seeking an interpretation of "golden handshake" provisions in a contract. Welch Foods v. Cadbury Beverages - Trial and appeal of a licence agreement dispute. Four Embarcadero Center Venture v. Mr. Greenjeans - A series of cases in the Ontario Courts dealing with the enforcement of foreign judgments. Distribulite Ltd. v. Toronto Board of Education Staff Credit Union Ltd. - Trial of a series of actions on forged letters of credit. The issues included the liability of directors, the enforceability of forged instruments and the power of credit unions to issue letters of credit. Jonert Investments v. Rothmans - Represented purchasers at trial in an action relating to an aborted commercial real estate transaction. The case dealt with tender and latent defect issues. Mercantile Bank of Canada v. Leon's - Trial and appeal of an action against the purchaser of appliances from an insolvent manufacturer. The courts dealt with the right of the purchaser to assert set-off against the holder of Bank Act security. Singer v. Candy - Successful settlement of international (International Chamber of Commerce) arbitration of dispute between Italian and Turkish companies. Woodglen & Co. Ltd. v. Owens - Successful defence at trial and on appeal of a CAD 10-million claim against a law firm, involving complex real estate, planning and municipal law issues, based upon limited retainer and sophisticated client. The case stands as authority on the "duty to warn." 835039 Ontario Inc. v. Fram Development Corporation - Defence at trial of a CAD 20-million claim against a law firm, involving complex development and planning issues. The plaintiff recovered less than CAD 125,000 after an 85-day trial. Bacher v. Obar - Represented a dentist seeking to enforce a restrictive covenant. The case dealt with the issue of the rights and obligations of professionals in "associate" practice with each other. Glenarin Acres Ltd. v. Canada Trust Co. - Successful defence of a mandatory injunction application seeking to force a commercial tenant to maintain a branch at the plaintiff shopping centre. Hudson's Bay Company v. Minister of Revenue and Bomberry v. Minister of Revenue - Two cases involving the application and interpretation of tobacco tax legislation in Ontario. Andersen Consulting v. Hudson's Bay Company - Successful mediation of complex claim for damages arising for consulting engagement. Optiglass v. Zellers Inc. - Successful mediation of a claim arising out of the termination of licensing arrangements in the defendant retail chain. Professional Experience Joel has written chapters in books devoted to civil litigation, and has published extensively in several areas of his practice. Joel was for several years an editor of the Construction Law Reports and a contributing editor of the National Insolvency Review. He has presented papers on a wide range of topics and he has participated in many seminars and programs presented by The Law Society of Upper Canada, The Advocates' Society and private organizations. Joel has participated as an instructor at the bar admission course in Ontario, The Advocates' Society and as a guest instructor at the Osgoode Hall intensive advocacy course. As well, Joel has instructed at litigation training programs presented by clients in-house. Joel is a fellow of the Canadian College of Construction Lawyers. He is a member of the International Bar Association, the Canadian Bar Association, the American Bar Association, the Chartered Institute of Arbitrators, the Defence Research Institute and The Advocates' Society. He is a director of the Osgoode Society for Canadian Legal History. Joel has been a member of the advisory board of the Canadian Lawyers' Liability Assurance Society (CLLAS) for several years, and is a past chair of its claims committee and member of its executive committee. In these capacities, he has advised CLLAS on the resolution of several multimillion dollar claims against CLLAS members, and he has co-operated actively with the primary insurers on risk management activities. All of these cases deal with complex commercial and corporate issues. Joel has played an active role in the management of Blakes since becoming a Partner in 1986, having served on its Executive Committee, Partnership Committee, Compensation Committee, Technology Committee, Conflicts Committee and others. Education Re-certified as Specialist in Civil Litigation - 1997, 2002 Certified as Specialist in Civil Litigation - 1991 Admitted to the Ontario Bar - 1980 LL.B., McGill University - 1978 B.C.L., McGill University - 1977 Mary Jane Stitt Partner, Toronto Office Telephone 416-863-2940 Facsimile 416-863-2653 maryjane.stitt@blakes.com Areas of Practice Litigation Insurance Product Liability Alternative Dispute Resolution Profile Mary Jane Stitt is a Partner and is currently the litigation practice group head in the Toronto office. Her commercial litigation practice emphasizes insurance law, directors and officers liability, product liability and professional negligence. Mary Jane has a broad-ranging insurance practice primarily representing policyholders who are major financial institutions, publicly traded companies (TSX, NYSE, NASDAQ) and large pension plan sponsors or administrators, as well as income trusts. She advises public companies on director, trustee and officer indemnification and insurance issues in connection with regulatory and criminal investigations, shareholder and securities litigation, antitrust, pension and other class actions and regulatory and criminal proceedings. Her insurance litigation practice includes coverage opinions and acting for corporate policyholders in litigation and arbitrations involving directors and officers liability, fiduciary liability, all risk property, boiler and machinery, marine, crime, commercial general liability, Builders Risk, and professional errors and omissions policies and financial institution bonds. She also acts as Canadian coverage counsel in connection with cross-border securities class actions. She advises policyholders concerning rescission issues and obtaining substantial insurer contributions towards the resolution of class proceedings. Mary Jane's product liability experience is primarily defence-related for manufacturers and distributors of a broad range of regulated and non-regulated products, including computer hardware and software, telecommunications equipment, electrical devices, automotive aftermarket, veterinary and animal biological, poultry and livestock, construction materials, household goods and appliances, food additives, industrial machinery, adhesives and elevating devices. Mary Jane's professional negligence experience includes defence work involving claims against lawyers and representation of plaintiffs in actions against accountants, auditors, real estate appraisers, real estate agents, insurance brokers, surveyors, software vendors and consultants, architects, engineers and veterinary practitioners. She was counsel to CIBC, Royal Bank and National Bank in a CAD 1.2-billion professional negligence claim against an English firm of solicitors, Clifford Chance, arising out of the Canary Wharf project and O&Y insolvency. Mary Jane has extensive experience in conflicts of law issues arising out of multi-jurisdictional professional negligence, product liability and insurance claims. Her alternative dispute resolution experience includes acting as counsel in various types of commercial arbitrations and mediations of multi-party professional negligence, insurance and complex commercial disputes. Mary Jane has extensive experience in the organization and conduct of forensic and fraud investigations in conjunction with leading forensic accountants; preparation of fidelity bond claims and other insurance claims; preparation of investigative reports and advising senior officers, directors, liquidators and trustees regarding actions for recovery of assets and insurance proceeds; conduct of subsequent litigation and liaising with law enforcement officials and regulators in respect of prosecutions arising out of forensic investigations. She was counsel to the Canadian Institute of Chartered Accountants (CICA) Alliance for Excellence in Investigative and Forensic Accounting in connection with their new Standards for Investigative and Forensic Accounting Engagements. Mary Jane has been cited as a leading Canadian product liability lawyer in Law Business Research's The International Who's Who of Product Liability Lawyers 1997, The International Who's Who of Product Liability Defence Lawyers for 2001 (2nd edition), 2002 (3rd edition), 2003 (4th edition), 2004 (5th edition) and 2006 (6th edition), The International Who's Who of Business Lawyers 2006 and in Law Business Research's Who's Who Legal series Web site. She has been listed in The Canadian Legal Lexpert Directory (1998) in the "repeatedly recommended" category for leading Toronto practitioners in the products liability section and the professional negligence section. Mary Jane was chair of the National Insurance Law Section of the Canadian Bar Association from August 2000-2001. She is frequently invited to chair or speak at major insurance and commercial litigation conferences and has published extensively on insurance law, indemnification, product liability, damages and commercial litigation issues (her publications are listed below). She is a member of the Canadian Bar Association, the American Bar Association, the American Trial Lawyers Association, The Advocates' Society (Ontario), the International Law Association, DRI (Defense Research Institute), and the International Association of Defence Counsel. Education Admitted to the Ontario Bar - 1982 LL.B., Osgoode Hall Law School - 1980 B.A. (Hon.), University of Toronto - 1977 B.Mus. (Hon.), University of Toronto - 1973 J. Alan Aucoin Partner, Toronto Office Telephone 416-863-2635 Facsimile 416-863-2653 jaa@blakes.com Areas of Practice Litigation Intellectual Property Life Sciences International Information Technology Profile Alan Aucoin practises litigation in a number of areas that span commercial regulatory, intellectual property and technology in both domestic and international venues. His practice includes appearances and opinions relating to, among others, conflicts of law and jurisdiction concerns, regulatory issues in the financial services sector, partnership and shareholder disputes, technology disputes and satellite technology licensing. Alan also advises on issues relating to biometrics, oil and gas pipelines, pharmaceutical development and varied patent, trade-mark and copyright disputes. Alan has appeared before the trial and appellate divisions of the Ontario Court of Justice, the Supreme Court of Canada and the Federal Court of Canada. He also appears before administrative tribunals and in domestic and international arbitrations and mediations. In addition to his litigation practice, Alan taught contract remedies to second- and third-year students at Osgoode Hall Law School for a number of years. He has also participated as a demonstrator in The Law Society of Upper Canada's bar admission program. Alan has been a member of the Ontario division of the Canadian Bar Association's Alternate Dispute Resolution Committee, and continues to be a member of the Canadian Bar Association and the Intellectual Property Institute of Canada. He is also an associate member of the American Bar Association and the American Intellectual Property Law Association. Education Registered Trade-mark Agent, Canada - 1986 Admitted to the Ontario Bar - 1984 LL.M., University of Toronto - 1982 LL.B., University of Windsor - 1981 (Duff-Rinfret Scholar) B.A. (Hon.), University of Toronto - 1977 Jeff W. Galway Partner, Toronto Office Telephone 416-863-3859 Facsimile 416-863-2653 jeff.galway@blakes.com Areas of Practice Litigation Class Actions Competition Pension & Employee Benefits Profile Jeff Galway is a litigation Partner in the Toronto office. Since his call to the bar in 1988, Jeff has appeared before all levels of courts in Canada, up to and including the Supreme Court of Canada, in various provincial superior courts (Ontario, British Columbia and Alberta), the Federal Court of Canada and the Tax Court of Canada. In addition, Jeff has appeared as counsel before a number of administrative tribunals including the Ontario Securities Commission, the Competition Tribunal and the Financial Services Tribunal. Areas of Practice Corporate/Commercial Litigation - Jeff has litigated in a wide range of cases including shareholder remedies under the Ontario or Canada Business Corporations Acts, regulatory investigations commenced pursuant to the Securities Act (Ontario), contract disputes and negligence actions. Examples of some of his recent cases include: Successful defence on behalf of a large multi-national mining company of an oppression application brought by several convertible debenture holders respecting a take-over bid made for the common shares of a Canadian mining company; and Counsel to Kinross Gold Corporation in connection with an application to the Superior Court of Justice (Ontario), pursuant to the plan of arrangement provisions under the Canada Business Corporations Act, to combine Kinross's business with that of TVX Gold Inc. and Echo Bay Mines Ltd. Class Action Litigation - Jeff has considerable experience with the Ontario Class Proceedings Act, both as counsel and having written and spoken extensively on this topic to professional groups both inside and outside the Firm. Recent examples of Jeff's involvement in this area include: Representation of pension plan sponsors and/or trustees in proceedings commenced in the Superior Court of Justice (Ontario) where complaints have been made with respect to various administrative actions taken or practices followed respecting the pension plan surpluses; and Defence counsel in proceedings commenced under the Class Proceedings Act (Ontario) alleging breach of the price-fixing provisions of Canada's Competition Act. Pension Litigation - Jeff has extensive experience as counsel before the Financial Services Tribunal (and its predecessor, the Pension Commission of Ontario) and the Ontario Superior Court on pension matters dealing with issues, such as surplus entitlement, breach of fiduciary duty, and the right to take contribution holidays. Examples include: Counsel to the Association of Canadian Pension Management in the Monsanto case, which is the leading decision in Ontario on whether plan sponsors are obligated by the Pension Benefits Act to distribute actuarial surplus on a partial plan wind-up; and Acted for a major life insurance company in a hearing before the Financial Services Tribunal where the issue was whether there had been a partial wind-up of the company's pension plan pursuant to the Pension Benefits Act (Ontario). Competition Litigation - Jeff has acted as counsel in a number of contested merger cases before the Competition Tribunal. These cases have involved extensive documentary production, section 11 examinations, preparation of complex expert economic evidence and numerous attendances before the Competition Tribunal. The last two merger cases in which Jeff was involved are: Superior Propane - now Canada's leading case on the ability of merging parties to rely on an efficiencies defence in a situation where the merged party possesses a high market share; and Canadian Pacific Ltd. (CP Ships) - involved a challenge by the Director of Investigation and Research into CP Ships's acquisition of certain assets of Cast North America. Constitutional Litigation - Since his call to the bar in 1988, Jeff has litigated a number of cases where the dispute has revolved around federal vs. provincial jurisdiction (division of powers) or a challenge under the Canadian Charter of Rights and Freedoms. Examples include: Appearances in the British Columbia Superior Court, the Alberta Court of Queen's Bench and the Alberta Court of Appeal as counsel for Canada's major banks challenging the constitutional applicability of provincial insurance legislation seeking to regulate to the banks' creditor insurance operations; and Counsel to Ontario Hydro in the Supreme Court of Canada where the issue was the applicability of federal vs. provincial labour legislation to workers at Ontario Hydro's nuclear generating stations. Tax Litigation - Jeff has appeared as counsel on a number of appeals before the Tax Court of Canada and the Federal Court of Appeal dealing with disputes under the Income Tax Act. Jeff has also been counsel in tax appeals involving provincial legislation, such as the Corporations Tax Act, Retail Sales Tax Act and the Employer Health Tax Act. Examples include: Successful in the Federal Court of Appeal in upholding decision of the Tax Court of Canada allowing the taxpayer's deduction of an allowable business investment loss in a situation where the taxpayer had been defrauded by other participant in a joint venture; and Acted for taxpayer on appeal to the Tax Court of Canada and the Federal Court of Appeal where the issue was the deductibility of interest paid on a loan by a subsidiary where the proceeds of the loan were used to fund a cash dividend to its parent. Other Experience Jeff has published extensively on advocacy and litigation and has spoken on these topics in seminars and programs sponsored by The Law Society of Upper Canada, The Advocates' Society, the Canadian Pension and Benefits Institute and private organizations such as Insight and The Canadian Institute. Jeff has been an instructor for the past eight years at the Ontario Centre for Advocacy Training program on written advocacy and a guest lecturer at the Osgoode Hall intensive trial advocacy course. Jeff has also played an active role in the management of Blake, Cassels & Graydon LLP since becoming a Partner in 1994, having served on its Executive Committee, Partnership Committee and Compensation Committee. Jeff is a member of The Law Society of Upper Canada, the Canadian Bar Association, the American Bar Association and The Advocates' Society. Education Admitted to the Ontario Bar - 1988 LL.B., Osgoode Hall Law School - 1986 B.Comm., Memorial University of Newfoundland - 1983 Sharon Wong Partner, Toronto Office Telephone 416-863-4178 Facsimile 416-863-2653 sharon.wong@blakes.com Areas of Practice Litigation Alternative Dispute Resolution Product Liability Class Actions Energy Profile Sharon Wong is a Partner in the Litigation Group. She has advised and acted for many public corporations involved in various energy industries, including companies in the oil and gas industry, and gas utilities and marketers. She is very experienced working with the various statutes and rules that affect the energy industry, including the Electricity Act, 1998, the Ontario Energy Board Act and the Market Rules. Sharon has also represented a broad range of commercial clients in respect of a variety of commercial disputes, including product liability, breach of contract claims, construction claims, negligence, shareholder and regulatory matters. Over the last couple years, Sharon's list of clients include Imperial Oil, Duke Energy/Union Gas, UBS Energy Commodities, Cinergy Solutions, TransAlta Energy, BP Canada Energy, Canadian Hydro Developers, Greater Toronto Airports Authority, Canada Lands Corporation, Canadian Imperial Bank of Commerce, Royal Bank of Canada, and Nestlé Canada. Sharon was a part-time instructor for two years for the trial advocacy course at Osgoode Hall Law School York University, and has been an instructor on several occasions in the intensive trial advocacy program for lawyers, which is organized annually by Osgoode Hall Law School. Sharon has appeared as trial and appellate counsel before all levels of courts in Ontario and before various federal courts and tribunals. In addition to representing her clients' interests in court, Sharon also works closely with her clients to develop practical and cost-effective solutions to their problems, including through mediation and arbitration. A selected list of cases in which Sharon has recently been involved include: representing a plaintiff in respect of a multimillion-dollar claim arising from an agreement for the management of a portfolio of energy contracts; advised clients in respect of applications and proposed applications to the Ontario Energy Board in respect of several generating projects; appeared before the Ontario Energy Board as counsel in the Board's Transmission 2000 hearing dealing with the design of Hydron One's electricity transmission rates post deregulation; and successfully represented a client before the Ontario Energy Board, and on subsequent appeal to the Divisional Court and the Ontario Court of Appeal, in respect of a contested application for renewal of a municipal gas franchise agreement. Education Admitted to the Ontario Bar - 1988 LL.B., University of Toronto - 1986 Jill M. Lawrie Partner, Toronto Office Telephone 416-863-3082 Facsimile 416-863-2653 jill.lawrie@blakes.com Areas of Practice Litigation Product Liability Class Actions Life Sciences Profile Jill Lawrie is a Partner in the Litigation Group. Since her call to the bar in 1993, Jill has practised general commercial litigation with an emphasis on contract and negligence issues, particularly in the context of product liability and class actions. Jill also has considerable experience with cases involving tax, pension and construction issues. Jill has counselled numerous U.S. law firm clients in obtaining evidence in Ontario for use in the U.S. courts. Jill has appeared at all levels of the courts in Ontario, as well as the Supreme Court of Canada. Jill has acted for both start-up and established clients involved in numerous industries, including manufacturers of medical devices, pharmaceuticals, automobiles and all manner of consumer products, for professional service organizations, financial institutions and insurers. Much of Jill's experience has been gained in large, document-intensive cases involving complex financial, technical, scientific and medical issues. Jill has taught courses in trial practice at Osgoode Hall Law School and is active in both the teaching and administrative branches of The Advocates' Society. Jill also regularly participates as a speaker at professional and industry seminars on issues related to product liability and class actions. Some of the matters illustrative of Jill's primary practice include: Product Liability Personal injury cases involving allegations of negligent design in the manufacture of automobiles Class action involving allegations of negligent design, testing and manufacture of a medical device Class action involving allegations of defective product and failure to warn in connection with a pharmaceutical product Personal injury and economic damage cases involving negligent design and manufacture of various consumer products Other Class Actions Class action involving the distribution of pension surplus Class action involving credit card issues Class action involving insurance products Contract Issues Cases involving the alleged breach of leases, distribution agreements, competition covenants, service provider agreements, construction contracts, broker agreements, promissory notes and supply contracts Professional Negligence Issues Cases involving allegations of professional negligence against accountants, engineers and lawyers Noteworthy decisions in which Jill has acted include: Woodglen & Co. v. Owens In this case, Jill acted as co-counsel to the insurer for a lawyer sued for professional negligence arising from a complex real estate development. This case was successfully defended at trial and on appeal, with numerous significant victories on interlocutory matters. Walker Estate v. York Finch General Hospital In this case, Jill acted as co-counsel on two levels of appeal before the Ontario Court of Appeal and the Supreme Court of Canada. On behalf of the plaintiff, an unsuccessful trial decision was successfully overturned on appeal and the successful result upheld before the Supreme Court of Canada. This decision represented the first pronouncement of the Supreme Court of Canada on a case alleging negligence against the Canadian Red Cross for its failure to properly screen donors for the HIV virus in the early 1980s. Carosi v. The Regional Municipality of Niagara In this case, Jill acted as co-counsel to the Regional Municipality of Niagara in a lawsuit brought by an unsuccessful bidder on two construction projects. At issue was the alleged bad faith of the municipality and contravention of procurement law principles. The Superior Court of Justice dismissed the action in its entirety after a three-week trial. The dismissal was upheld by the Ontario Court of Appeal. Nav Canada et al. v. International Lease Finance Corporation et al. Nav Canada and various airport authorities brought motions for the seizure and detention of the fleet of 38 aircraft that were either leased by Canada 3000/Royal Aviation or subject to the claims of secured creditors of Canada 3000/Royal Aviation, for unpaid navigation, airport and landing fees in excess of CAD 30 million. Certain aircraft lessors brought cross-motions for the release of the aircraft or of the security posted in their place. These cross-motions were granted and the motions of Nav Canada and the airport authorities were dismissed. These decisions were appealed to the Supreme Court of Canada. Jill acts as co-counsel to two of the aircraft lessors. Markson v. MBNA Canada Bank Jill acts as co-counsel for the defendant in a proposed class action involving credit card issues. The plaintiffs' motion for certification was successfully resisted and the motion was dismissed. This holding was recently upheld by the Divisional Court. Education Admitted to the Ontario Bar - 1993 LL.B., University of Western Ontario - 1991 B.A. (Political Science), York University - 1989 Kathryn Manning Associate, Toronto Office Telephone 416-863-3852 Facsimile 416-863-2653 kathryn.manning@blakes.com Areas of Practice Litigation Class Actions Product Liability Profile Kathryn Manning is an Associate in the Litigation Group. She has a broad litigation practice and has frequently appeared at all levels of the Ontario courts in a variety of civil matters. She has also been involved in arbitrations and mediations. Since her call to the Ontario Bar, Kathryn's practice has included corporate-commercial, product liability, procurement and class action litigation. She has trial experience in product liability and employment matters, and has been counsel in class action and health law matters. Kathryn graduated from Queen's University with her LL.B. in 1996, and while at Queen's, she received awards in taxation, property and family law. She was called to the bar in 1998. Prior to attending Queen's University's Faculty of Law, Kathryn graduated from the University of Toronto with a four-year bachelor of arts degree in anthropology and history. Kathryn is a volunteer at Jessie's Centre for Teenagers in Toronto. She is a past member of the board of directors, including sitting as board chair, and currently sits on the Personnel Committee. Kathryn is a member of the Canadian Bar Association, The Advocates' Society and the Metropolitan Toronto Lawyers' Association. She has also been an instructor for continuing legal education programs through The Advocates' Society. Kathryn sits on the executive of the Ontario Bar Association's Constitutional, Civil Liberties and Human Rights Section, and is a member of the Ontario E-Discovery Task Force. Education Admitted to the Ontario Bar - 1998 LL.B., Queen's University - 1996 B.A. (Hon.), University of Toronto - 1992 Catherine Beagan Flood Associate, Toronto Office Telephone 416-863-2269 Facsimile 416-863-2653 cbe@blakes.com Areas of Practice Litigation Constitutional & Charter of Rights Privacy Media Profile Cathy practises in the Litigation Group in the Toronto office. She has a specialized practice in litigating constitutional and administrative law cases and providing advice on constitutional, privacy and freedom of information issues, in addition to practising general civil and commercial litigation. She has argued before all levels of courts, including the Supreme Court of Canada and the Ontario Court of Appeal. She has been counsel on numerous constitutional and administrative law cases dealing with issues such as the Charter of Rights and Freedoms, the division of powers, parliamentary privilege, judicial independence, freedom of information and human rights. She has also prepared extensive legal opinions on issues such as compliance with privacy legislation, constitutional conventions, the Charter of Rights and Freedoms, and the division of powers in the Canadian Constitution. Cathy is also a member of the adjunct faculty of Osgoode Hall Law School, where she has been teaching a specialized seminar on privacy and freedom of information since 2000. Prior to joining Blake, Cassels & Graydon LLP, Cathy graduated as gold medallist from Osgoode Hall Law School. She was law clerk to the Right Honourable Antonio Lamer, P.C., C.C., chief justice of Canada from 1997-1998. After completing her clerkship, Cathy received an LL.M. degree from Harvard Law School, where she studied constitutional, administrative and media law as a Frank Knox Memorial Fellow and Canada-U.S. Fulbright scholar. In 2005, the board of directors of the Osgoode Hall Law School Alumni Association awarded Cathy a Gold Key Award in recognition of exceptional professional achievement by a recent graduate. Education LL.M., Harvard Law School - 1999 LL.B., Osgoode Hall, York University - 1997 B.A., University of Prince Edward Island - 1994 Bradley Thomas Cran Associate, Toronto Office Telephone 416-863-5821 Facsimile 416-863-2653 brad.cran@blakes.com Areas of Practice Litigation Construction Product Liability Alternative Dispute Resolution Class Actions Profile Brad Cran practises with the Litigation Group. He enjoys handling software, failed technology and other ITrelated disputes that at times cross over into copyright law, where he draws upon his science education and beginnings with the Intellectual Property Group at Blakes to assist him. His approach with those types of cases, which he finds both interesting and beneficial, is to gain an intimate knowledge of the technology involved, which he then uses to assist in crafting the theory of the case. Recently, he assisted more senior counsel at Blakes in recovering an international arbitration award of more than USD 90 million in a claim involving complex software licensing, computer source code and copyright infringement issues. Brad has also gained experience in class action work, international commercial arbitrations, construction lien litigation, product liability cases, banking and credit card disputes and applications under the Patented Medicines (Notice of Compliance) Regulations. He has also done work in enforcing and resisting the enforcement of foreign judgments and proceedings in Canada. Brad is frequently called upon to act in large, e-discovery cases involving voluminous documentary disclosure. He has appeared before both the federal and provincial courts. Education Admitted to the Ontario Bar - 2002 LL.B., Dalhousie University - 2000 B.Sc. (Biology, Hon.), University of Ottawa - 1996