As the medium of business information moves inexorably from paper to electronic, questions such as the following are asked with greater frequency and urgency: is electronically based information as admissible in court as its paper-based ancestor?; how should information in electronic form be stored in order to satisfy legal record retention rules?; in litigation, can a party discover all of another party’s vast electronic archives?; and should all e-mails be retained so they are available in any future litigation?
As these are good and timely questions, this column kicks off a four part series on various key aspects of "e-evidence". First, we bring some of historical perspective to bear, and outline the current statutory regime for computer-based records. Next month we look at the recently published CGSB Standard on Electronic Records as Documentary Evidence, and the impact this will have on establishing best practices for the retention of electronic records. Third, we consider Ontario’s recently released e-discovery Guidelines. And finally, we review some best practices for e-mail and other electronic document retention policies.
First Evidentiary Principles
Evidence law strives to ensure that only reliable evidence is permitted to be provided to judicial and other decision makers in legal, administrative and related proceedings. To this end, a number of evidence law rules have been developed, initially in the context of oral testimony, and more recently for documents and records.
Traditionally, judges preferred oral testimony given by live witnesses, in order that the veracity of the witnesses, and their credibility, might be tested by rigorous, and sometimes withering, cross examination. Moreover, a live witness would only be allowed to testify as to matters of which he or she had personal knowledge; information they heard others say – so called – "hearsay" – was generally excluded, given that such other person should be compelled to testify first hand, so that again the reliability mechanism of cross examination could be brought to bear.
Under the traditional hearsay rule, documents were also frowned upon as evidence, because, strictly speaking, they constituted hearsay; again, the theory was that the actual author of the document should also have to appear in court.
The Rise of Business Records
By the early 1800s, paper-based business records were becoming such a prevalent means of storing information it was no longer practical to bring to court the author of every single document in the company. As important, judges took comfort in the trustworthiness of these business records because they were the very same documents that were used to organize and operate in some cases vast and impressive corporate or financial empires; in effect, if they were good enough for the specific business, they were good enough for the legal system.
As a result, there developed a very important common law exception to the hearsay rule: business records created in the ordinary course of operations could be admitted into evidence. On the other hand, the "best evidence" rule – which required that the best evidence possible be provided to the court – steered judges to prefer original documents over copies.
Over time, the business records common law exception to the hearsay rule became enshrined in Canada’s evidence law statutes. For example, in 1927 a provision was added to the Canada Evidence Act that admitted bank records made in the ordinary course of business, subject to the court’s ability to probe the so-called "foundation evidence" relating to the process that created the record to ensure its trustworthiness. Forty years later a general business records provision was added to the statute.
Computer-Generated Business Records
For the most part, in the last quarter of the 20th century, as computers made their debut in the corporate world – and then forcefully came to insinuate themselves into just about every nook and cranny of modern life - courts expressed very little reluctance to admit computer-generated records under the statutory or the common law business records exception to the hearsay rule. Where the particular requirements of the statute weren’t met, the common law rule proved to be very helpful, given that the Supreme Court had by this point agreed to permit the admission of virtually any document that was reliable.
To illustrate the flexibility of most courts in this regard, consider that in one case the Crown wished to introduce copies of the paper-based monthly records of a bank account that were generated by the bank’s computer. This particular computer (some 25 years ago) stored electronically all the deposits and withdrawals that occurred in a month, but at the end of the month printed out a paper-based cumulative record, and then the electronic memory was wiped clean, leaving the monthly paper-based account statement as the sole record.
The defence argued that the Canada Evidence Act only permits the admission of a copy of the original record, that the electronically stored data was the original record in this case, and therefore a copy of the paper-based record was inadmissible as it was not a copy of the original record. The trial judge accepted this argument, and acquitted the accused.
The Ontario Court of Appeal, however, reversed, and in a very creative judgement developed the following important principles: a record may be in any form, even an illegible one; and the form in which information is recorded may change from time to time, and the new form is equally a record of that kind of information. Based on these principles, the court held that the information in the bank’s computers changed its form when it was printed out as a paper-based monthly statement, and that this hard copy thereupon became the record that was kept by the financial institution, and hence a copy of it was admissible.
Latest Law Reform
Nevertheless, from time to time, some lower courts raised questions about the appropriate "foundation evidence" required for the admissibility of computer generated evidence. In some other cases questions were also raised about what is an "original" in the context of computer-based evidence, when applying the largely paper-based language of the traditional business records rules of the evidence statutes. One can talk of an "original" in a paper-based environment – there is usually one original and then one or more copies of the original – but in an electronic environment it is usually not helpful to speak in terms of the "original". When one person sends another an e-mail, there really isn’t a single original and multiple copies, notwithstanding that the user interface to the computer system might give us that impression.
In order to clarify these sorts of issues that developed with computer-generated evidence, most jurisdictions in Canada amended their evidence law statutes a few years ago to make clear the following. First, the new legislative changes in essence resolve the issue of what constitutes the "original" record in the context of the creation, storage and communication of electronic information by effectively abandoning the concept of original in an electronic environment. The thrust of the new provisions is to shift the analysis from an assessment of a particular electronic document to the computer-based system that produced it, and then to take comfort about this system based on its operational track record.
Second, the recent changes to the evidence law statutes provide that the best evidence rule is satisfied in respect of electronic records by proof of the integrity of the electronic records system by which the data was recorded or preserved. Moreover, the new provisions allow the integrity of the record-keeping system to be implied from the operation of the underlying computer. In short, the new amendments support the admissibility of electronic evidence, while still permitting a party to challenge it if the reliability of the computer system or network that produced it can be put into question.
So, when do you know whether you have a reliable computer system?. For the past few years this question caused some concern among companies because there were no commercially accepted standards or best practices in this area. Not until recently, that is. In the next column we look at the new Canadian General Standards Board standard, Electronic Records as Documentary Evidence, which answers this very important question.
George S. Takach is the Co-Chair of the Technology Law Group at McCarthy Tétrault, the author of Computer Law, and an Adjunct Professor in Computer Law at Osgoode Hall Law School.
This article is intended to convey brief, timely but only general information and does not constitute legal advice; readers are encouraged to speak with legal counsel to understand how the general issues noted above apply to their particular circumstances