This was a motion to secure compliance with an e-discovery order. Justice Brown ordered the defendants to serve an e-discovery plan no later than April 29, 2011, and produce all documents resulting from execution of that plan by May 27, 2011. The defendants served the e-discovery plan on May 9, 2011 but never produced any documents. The plaintiffs moved for a finding of contempt. In his decision, Brown J. commented extensively on the obligations upon counsel in such circumstances.
Brown J. first cited Rule 29.1.03(4) of the Rules of Civil Procedure and the Sedona Principles in noting that timely communication between counsel is required to develop and implement an e-discovery plan.
In reviewing the correspondence between counsel, Brown J. found that the lawyer for the defendants had consistently failed to respond in a timely fashion to reasonable correspondence from opposing counsel. Citing Rule 6.03(6) of the RCP, Rule 7 of the Principles of Civility for Advocates, and the Sedona Principles, Brown J. reminded the defendants' lawyer of his professional obligations to respond to correspondence in a timely manner. Brown J. also found that the defendants had breached the original order and were unnecessarily delaying the e-discovery.
As a consequence of the foregoing, the court ordered the defendants to comply with the original e-discovery order under a new timeline, failing which the plaintiffs would be permitted to continue with their contempt motion.
L'Abbé v. Allen-Vanguard, 2011 ONSC 4000
This case involved the payout of a $40-million escrow fund following a corporate acquisition. The motions raised some interesting questions about discovery planning, electronic document production and the new putative caps on discovery under recent rule amendments.
Each party moved for sanctions against the other in their motions and cross motions. The offered shareholders sought costs or other sanctions against the purchaser for repeated breaches of court orders and production obligations. The purchaser, Allen-Vanguard sought costs against the offered shareholders for wasting four days of discovery.
The court began by outlining the principles that counsel should take into account when dealing with large amounts of discovery, especially during e-discovery where voluminous amounts of documents are exchanged by the parties. Among them were those elucidated by the Sedona guidelines. Principle 4 of the Sedona Canada guidelines states that counsel and parties should meet and confer as soon as practicable, and on an ongoing basis, regarding the identification, preservation, collection, review and production of electronically stored information. More importantly, the process is intended to be collaborative. Counsel should seek production and discovery solutions that meet the needs of the litigation, rather than seeking to win arguments about whose proposal is better or more correct.
Rule 29.1 requires a discovery plan and involves procedural collaboration. It is fundamental that parties inform themselves before agreeing to timetables so that the times and volumes of information are accurate. Moreover, this should be an ongoing process. Thus, where a party determines that the scope of its production obligations has changed, it should immediately advise the other side and seek appropriate amendments to the plan and the timetable. Subject to certain exceptions, a timetable may be amended by the parties (without court approval) by agreement in writing, even if the timetable is contained in a court order.
The party having the duty to produce documents has, first and foremost, the duty to determine what potentially relevant documents it has in its possession, power and control, and where they are located. The party then has a duty to discuss the magnitude and scope of the proposed preservation, review and production with the other side. The purchaser in this case was faulted for not having initially and accurately determined the scope of production and the technical requirements of recovering these documents. Armed with this information, both parties then have an obligation to try to agree on the most efficient and cost-effective process of targeting the necessary production. If this information is not provided or is inaccurate, then any plan is doomed to failure.
The object of a discovery agreement is to avoid massive over production on the one hand, and unnecessary delay and expense on the other. It is a benefit to the producing party which will otherwise be required to recover and review all potentially relevant sources of documents and then to review the documents for relevance, privilege and duplication. It is the process of review that is potentially the most time consuming and expensive process. Moreover, in the absence of a process for jointly identifying the target documents, it is then a process that must be repeated by the other party.
Various kinds of agreements are possible. One option would be an agreement to utilize software to review the e-mail archives of various custodians for certain key words. Another agreement might limit initial inquiries to certain custodians. Yet another might focus on documents relating to liability, or to produce documents in relation to other distinct issues before the parties decide whether it makes economic sense to undertake additional searches and review.
Of course an agreement will not always be possible. The producing party will be well served however by transparency regarding its information architecture and its proposed plan to preserve, locate, review and produce documents. Though ultimately it may need to proceed unilaterally in the absence of agreement, it will go a long way to meeting its obligations if the plan proposed is a sound one and it tries in good faith to meet any objections raised by the other side.
On the basis of the analysis above, the court concluded that Allen-Vanguard had not taken its production obligations as seriously as it should have done. There was an absence of informed negotiation because Allen-Vanguard did not itself come to grips with the magnitude of the problem and make ongoing full and specific disclosure concerning its proposed production plan. Allen-Vanguard did not make any significant effort to agree with the offered shareholders on the proper scope of production nor to produce the most obviously relevant documents before searching further.
The court concluded that the most appropriate sanction would be a modest award of costs against the purchaser pursuant to Rules 3.04 (4) (c) and 60.12 (c) as a consequence of breaching production obligations and failing to meet the times set out in court orders.
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