Canada: Records Management @ Gowlings - August 11, 2010

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  • Retention, Disposal, and Destruction
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Records Retention, Disposal, and Destruction

CASE LAW

The Special Master ruled on a motion by Defendant that Plaintiff's spoliation of hard drives affected evidence relevant to a material issue, and was wilful in the sense that Plaintiff was aware of its responsibilities to preserve but failed to take necessary steps to do so. However, the Special Master denied dismissal of Plaintiff's action as well as costs incurred by Defendant to conduct forensic imaging of Plaintiff's hard drives. Instead, the Special Master remedied a jury instruction that the jury would be entitled to infer that the hard drives would have contained evidence unfavourable to Plaintiff.

Upon a motion to modify by Defendant, Judge Mix of the U.S. District Court (Colorado) noted the goals of deterrence, risk displacement and restoration as described in Pension Committee1 as guiding considerations respecting remedies in spoliation cases. Judge Mix also considered the weight of five aggravating factors2 to evaluate the circumstances on which the claim for dismissal was based to determine the appropriateness of Defendant's proposed sanction:

  1. Prejudice to Defendant: the prejudice resulting from destruction could be reduced by instruction of the jury and production of 'responsive' information to replace what had been destroyed; time and expenses could be remedied by costs awards;
  2. Interference with Judicial Process: spoliation had complicated discovery disputes, led to the appointment of a Special Master and consequent review of his findings, and led to incomplete information being provided to the jury. Instruction could only partially remedy this complication;
  3. Culpability of Plaintiff: Plaintiff had complied with all other discovery requests and partially replaced information destroyed. The destruction, though wilful in the sense that protective measures were not fully implemented, resulted from the ordinary course of business. There was no premeditated campaign to destroy key evidence;
  4. Advance Notice of Sanction of Dismissal: the fact that the penalty of dismissal as a result of noncompliance is specifically contemplated by the Federal Rules of Civil Procedure and jurisprudence on spoliation was sufficient in support of granting a dismissal to Plaintiff;
  5. Efficacy of Lesser Sanctions: jury instruction and compensation would diminish any prejudice to Defendant, was all that was necessary to prevent further repetition of the mistake by Plaintiff, and would place the consequences of spoliation on the offending party not the prejudiced party.

Finding Plaintiff's conduct 'negligent rather than intentional', Judge Mix denied Defendant's request for dismissal and rewarded only partial costs because it was found that Defendant had expended too many resources on the litigation of the motion.

Plaintiff claimed injuries preventing her from continuing to run her personal training business. Defendants moved to compel Plaintiff to produce her personal computer for inspection of business invoices stored thereon. Plaintiff initially refused to accede to Defendants' requests for electronic copies of the invoices for the purpose of confirming Plaintiff's assertions that her tax returns did not accurately reflect her true income. Defendants filed a motion for production.

Following conclusion of mediation, counsel for Plaintiff advised Defendants' counsel, and swore in an affidavit, that Plaintiff's computer had become completely corrupted and information requested was no longer retrievable. Plaintiff agreed to consent to an amendment to Defendants' statement of defence to plead spoliation. Defendants refused and proceeded with the motion for production.

The motion was dismissed. Plaintiff's counsel swore that the computer was not available, and the truth of these facts should only be determined at trial. The amendments which were offered on consent would have entitled Defendants to make submissions on whether or not spoliation was intentional. Once counsel for Defendants received Plaintiff counsel's correspondences as to the corruption and unavailability of the computer, the choice to proceed with the motion, knowing that an order to produce could not be effective on the information provided by counsel, was inappropriate. The Rules of Civil Procedure encourage parties to proceed in a fair and inexpensive fashion, and such over-zealous action was in violation of those principles.

Plaintiff brought an action alleging negligence on the part of doctors misrepresenting her son's medical condition and failing to refer him to a specialist for psychological assessment. A number of medical records from the time were missing and, on appeal, at issue was whether the destruction of records could constitute an independent tort which could ground Plaintiff's claim.

The Court of Appeal defined the term spoliation as referring to the destruction, mutilation, alteration or concealment of evidence. The remedies available to litigants who suffer due to spoliation include procedural remedies, evidentiary presumptions, contempt proceedings and costs orders. Spoliation has not been recognized as a free-standing tort in Canada. There has been much judicial consideration of spoliation as a tort in the United States but the lower level courts which have typically recognized spoliation as an independent tort have typically been overruled by higher level state courts. The arguments for the tort typically reference the fact that the destruction of evidence undermines the trial process. The arguments against the tort center on the fact that in recognizing the tort, the court would be attempting to place a value on evidence that no longer exists and whose exact content is unknown.

The Court concluded that this matter was not squarely before them and thus declined to rule for or against the existence of the tort in British Columbia. The Court further held that there is no such thing as negligent spoliation and that spoliation requires intentional destruction indicative of fraud or an intent to suppress the truth. The spoliator must have acted deliberately and with fraudulent intent, but once the spoliator's action resulted in another party being deprived of the ability to prove or disprove some part the case, the burden of proof with respect to intent was to be born by the alleged spoliator as the creator of the predicament.

The Court eventually dismissed the appeal finding that Plaintiff's claim necessitated that Defendants had intentionally destroyed evidence but this was not the case as it was hospital policy to destroy records after a certain number of years.

Plaintiff's action related to a claim for lost business profits which had allegedly been incurred after the Plaintiff was struck on the head by a rock which had fallen from the Defendant's building. Defendant brought a motion seeking to have the Plaintiff's action dismissed on the grounds that Plaintiff had failed to comply with their ordinary disclosure obligations under Ontario's Rules of Civil Procedure. In particular, Plaintiff had failed to produce various business and banking records which would shed light on the actual losses sustained by the businesses following Plaintiff's injury.

It was submitted by Plaintiff that much of the evidence, which could ordinarily be provided by Plaintiff's own recollection, was unavailable due to the injuries sustained. Where documents were not being produced for inspection, Rule 30.08(2) permitted the revocation or suspension of a party's right to initiate or continue an examination for discovery, the dismissal of a Plaintiff's action, or any other order as is just.

Defendant argued that it would be prejudiced if required to go to trial for loss of profit without complete documentation to test the profits claimed. Plaintiff argued however, that dismissal could only be advanced where significant prejudice to the other side had been established.

The Ontario Superior Court of Justice held that it was not possible to determine that Plaintiff was deliberately refusing to comply with the Rules and court orders respecting preservation and production of the requested records. Dismissal of the action was not available on the basis of spoliation – spoliation was an intentional tort, and the existence of such intention could be determined only with an admission or by a trial of the issue. Plaintiff's record-keeping practices would have to be explained by Plaintiff during the main trial of the action.



DID YOU KNOW?

Gowlings Records Management group offers objective coding services, permitting information from the face of a document to be entered into a indexed, searchable database. Contact us today for more information.



NEWS AND ARTICLES



Gowlings Records Management Services Group

Gowlings' Records Management Services Group is comprised of lawyers and technical specialists skilled in dealing with paper and digital records, either in the context of pre-claim risk mitigation or as records counsel in complex litigation. Specifically, we offer the following services:

  • Pre-claim risk assessment of records management policies and procedures.
  • Records management consulting services, including review and analysis of existing policies and procedures, developing recommendations for revisions to policies and procedures, assisting with implementation of revised polices and procedures, and continuing education and audits of implemented records management program to ensure compliance.
  • Developing and implementing litigation hold policy and procedure.
  • Post-claim records management services, including scanning and coding of paper records, processing and review of electronically stored information, consulting on records management issues throughout litigation process and assisting lawyers with presenting records at hearings.

Visit our webpage at: http://www.gowlings.com/Services/records-management-services

Footnotes

1. Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, 685 F.Supp.2d 456 (S.D.N.Y.2010).

2. See Ehrenhaus v. Reynolds, 965 F.2d 916, 920-21 (10th Cir. 1992).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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