The Sedona Canada Principles are the Canadian version of the Sedona Principles commonly used in the United States. Simply put, the Sedona Canada Principles set out the guidelines for the identification, collection, preservation, review, and production of electronically stored information (ESI) in Canada. They’ve become increasingly relevant as the rising prevalence of electronic data has necessitated the use of ediscovery techniques to uncover evidence in civil and criminal proceedings.
The Sedona Canada Principles are referenced directly in Rule 29.1.03(4) of the Ontario Rules of Civil Procedure, cited in an ever-larger number of cases, and appear to be the best source for guidance on the topic of increasingly unwieldy electronic evidence management in civil litigation.
One of the most recent applications of the Principles was in Verge Insurance Brokers Limited et al. v Daniel Sherk et al., 2017 ONSC 1597. This appeal of a decision by a motion judge in the Ontario civil courts deals with, shall we say, the interesting decisions made by the appellant (Verge Insurance) in the course of providing ESI to the respondent (Daniel Sherk et al.).
The history of the litigation is complex and convoluted but a few facts will suffice. In 2012, the appellant/plaintiff and defendant/respondent exchanged “hold letters” informing one another of pending litigation and requiring one another to preserve all information that might be relevant to the proceedings.
For some reason, the plaintiff, Verge Insurance, did not instruct its employees to preserve information relevant to the proceedings in a single document. Instead, and contrary to the Sedona Canada Principles, it began backing up all of its data onto dozens of “backup tapes.”
Yes, I said tapes. In 2012, this company was still using tape drives.
Despite statements to the contrary Verge Insurance made to the court during the course of proceedings, it did not review all of its data for material relevant to the proceedings. In fact, the company’s principal admitted during a deposition that it would not be possible to do so and that he didn’t consider it his obligation to review the material. Hence, the “document dump.”
This tactic by Verge was particularly confusing. During my seven years of practice I never once knowingly and intentionally misrepresented a fact to the court. Contrary to the popular caricature of lawyers as liars, dishonesty and carelessness with the truth in real life can get a lawyer reprimanded, censured, disbarred, or worse.
When the defendant began to suspect that the plaintiff had not, in fact, reviewed the backup tapes, it obtained an order requiring the plaintiff to submit thirteen of the tapes to an independent auditor. In response, and again contrary to the Sedona Canada Principles, the plaintiff imposed a whole slew of conditions on the auditor in exchange for allowing them to review the tapes. These included:
– Requiring the auditor to attend Verge Insurance to inspect the tapes
– Requiring the tapes be encrypted before the auditor was allowed to review them
– When it became necessary to transport the tapes, requiring the auditor to use a Brinks armored truck
In other words, and reading between the lines, the plaintiff made it as difficult as humanly possible for the auditor to conduct its work. They may as well have created an obstacle course including literal hoops for the auditor to jump through. Unsurprisingly, the auditor’s costs increased to $200,000.
Unsurprisingly, the auditor found relevant material on many of the thirteen sample backup tapes. When the defendant brought a motion to be indemnified for costs related to the discovery, the court pointed out that the Sedona Canada Principles had not been complied with and awarded indemnification.
The Sedona Canada Principles set out a coherent and flexible framework around the management of ESI and ediscovery. Courts are increasingly penalizing parties who fail to adhere to it in any meaningful way and, as a result, cause delay or damage to the legitimate interest of an opposing party.