Rule 16 creates a comprehensive process for preserving, sorting, and disclosing electronic information in litigation and will effect enormous changes in the litigation process. It is the first such Rule in Canada, although British Columbia, Ontario and Alberta all have practice directions or notes governing electronic disclosure, and the United States amended their Federal Rules of Civil Procedure to address electronic discovery in 2006.

Before getting into the mechanics of R.16 it is useful to understand the Rule’s conceptual foundation in the Sedona Principles.

Sedona Principles

Many (perhaps all) electronic disclosure Rules are based on principles first articulated by the Sedona Conference, an American think-tank founded to address cutting edge issues in complex litigation, among other legal subjects. The first Sedona Working Group was established in 2001 to consider electronic document retention and production in the litigation process. Canada established its own Sedona e-discovery Working Group in 2006. The group released The Sedona Canada Principles in January 2008. Nova Scotia’s R.16 is based on Sedona Principles.

The twelve key Sedona Principles addressing electronic discovery are reprinted below. The full 43 page document explaining them in detail is available free at www.thesedonaconference.org and through the University of Montreal’s e-discovery portal at www.lexum.umontreal.ca/e-discovery.

The Sedona Canada Principles
Addressing Electronic Discovery

Principle 1: Electronically stored information is discoverable.

Principle 2: In any proceeding, the parties should ensure that steps taken in the discovery process are proportionate, taking into account (i) the nature and scope of the litigation, including the importance and complexity of the issues, interest and amounts at stake; (ii) the relevance of the available electronically stored information; (iii) its importance to the court’s adjudication in a given case; and (iv) the costs, burden and delay that may be imposed on the parties to deal with electronically stored information.

Principle 3: As soon as litigation is reasonably anticipated, parties must consider their obligation to take reasonable and good faith steps to preserve potentially relevant electronically stored information.

Principle 4: 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.

Principle 5: The parties should be prepared to produce relevant electronically stored information that is reasonably accessible in terms of cost and burden.

Principle 6: A party should not be required, absent agreement or a court order based on demonstrated need and relevance, to search for or collect deleted or residual electronically stored information.

Principle 7: A party may satisfy its obligation to preserve, collect, review and produce electronically stored information in good faith by using electronic tools and processes such as data sampling, searching or by using selection criteria to collect potentially relevant electronically stored information.

Principle 8: Parties should agree as early as possible in the litigation process on the format in which electronically stored information will be produced. Parties should also agree on the format, content and organization of information to be exchanged in any required list of documents as part of the discovery process.

Principle 9: During the discovery process parties should agree to or, if necessary, seek judicial direction on measures to protect privileges, privacy, trade secrets and other confidential information relating to the production of electronic documents and data.

Principle 10: During the discovery process, parties should anticipate and respect the rules of the forum in which the litigation takes place, while appreciating the impact any decisions may have in related actions in other forums.

Principle 11: Sanctions should be considered by the court where a party will be materially prejudiced by another party’s failure to meet any obligation to preserve, collect, review or produce electronically stored information. The party in default may avoid sanctions if it demonstrates the failure was not intentional or reckless.

Principle 12: The reasonable costs of preserving, collecting and reviewing electronically stored information will generally be borne by the party producing it. In limited circumstances, it may be appropriate for the parties to arrive at a different allocation of costs on an interim basis, by either agreement or court order.

Copyright © 2008, The Sedona Conference © . Reprinted courtesy of The Sedona Conference © .
Go to www.thesedonaconference.org to download a free copy of the complete document for your personal use.

Six Key Points about Electronic Information

Navigating e-discovery requires a certain comfort level with technology that was never previously necessary to a litigation practice. Here are six key points that every lawyer needs to know about electronic information:

1. Electronic information is everywhere

The first key point to understand is that relevant electronic information can be found in a dizzying array of sources, from the obvious, such as computers, CDs, or handheld flash drives, to less obvious sources such as Blackberries and other personal digital assistants, memory in printers and fax machines, recorded voice mail messages, and home computers, all of which must now be canvassed for relevant electronic information.

2. Electronic information is nearly impossible to delete

A second key point is that the vast majority of electronic information is never truly deleted. Most people are aware that files can be retrieved from a computer’s recycle bin, but even files that have been deleted remain on the system and can be recovered until they are overwritten by a new file, which may never occur. Even after it is overwritten, information may still be recoverable; it is just more difficult. Deleted information may also be available through archived backup tapes.

3. Every electronic file contains hidden information called metadata

A third key point to understand is that computers store far more information about documents, files or e-mail than is ever printed. This largely hidden information is called metadata, meaning data about data. Metadata includes information such as who created a document and on what computer, when the document was last modified, earlier versions of documents that include deleted text, a history of websites visited, blind copy recipients of e-mail messages, information about when an e-mail was opened, or forwarded. Metadata can assist in determining authenticity, such as where a witness denies sending an e-mail. In many cases, none of this information is relevant, but it can also make or break a case, providing crucial proof of a fact in issue. Understanding when metadata is relevant is one of the biggest challenges in electronic discovery.

4. While difficult to delete, some electronic information is easily destroyed

A fourth key point is that despite the near impossibility of deleting electronic information, the information itself can be fragile. Merely accessing or moving data can destroy it. Turning on a computer can alter hundreds of files stored on it. Opening a word processing document to see if it is relevant destroys metadata about when it was last accessed. The solution is to have an information technology specialist create a mirror image of the information stored on the computer in a timely way.

5. Old electronic information may be difficult or impossible to access

A fifth point relates to archived data and obsolete computer systems. Information created or stored years ago may be difficult or impossible to access, due to degradation of backup tapes, or loss of a crucial computer or software necessary to access the information.

6. The amount of available electronic information vastly exceeds information available on paper

The sixth and final point about electronic information relates to volume. Electronic documents are easily created and vastly outnumber paper documents. Many people now send far more e-mail and text messages than letters or faxes, and much of this information may never reach print. A single computer with a 400 gigabyte hard drive can hold 40 million pages of information. The sheer volume of electronic information in a case can produce many duplicate files.

These six points are only the tip of a very large electronic iceberg. The practice tips section for R.16 contains some suggestions for further reading on e-discovery issues.

How this Rule Works

Virtually every action and application will now require two affidavits from each party: one disclosing documents under R.15, and a second disclosing electronic information under R.16.

Tailoring Electronic Disclosure to each Case
A central theme running through R.16 is the ability to tailor the preservation and disclosure of electronic information to the requirements of a particular case. Rules 16.01 and 16.04 allow the parties to agree on preservation and disclosure obligations more extensive, or less extensive, than those that R.16 provides. Rule 16.05 allows this agreement to trump R.15 and R.16. Rule 16.01(2)(c) allows a judge to give directions where the parties cannot reach agreement and the default rules cannot be complied with. Under R.16.14(1) those directions also trump R.16.

Preserving Electronic Information
Rule 16.02 addresses the obligation to preserve relevant electronic information when required to do so by law. Rule 16.02 sets out the characteristics of information that must be preserved and R.16.02(4) specifies that a party must “exactly copy” the relevant information by creating a mirror image that preserves all of the associated metadata. (The term “exactly copy” is defined in R.14.02(1)). While the cost of creating an exact copy is not great, the work is technical and clients may need to engage information technology specialists to comply with R.16.02(4).

Rule 16.02(5) to (7) create an exception for rapidly changing databases or files (such as inventory), but allow for a motion to freeze this information if necessary.

Motions for all types of preservation orders are made under R.16.02(8).

Disclosing Electronic Information
Rule 16.03 sets out the disclosure obligations of parties in actions and applications:

• they must make diligent efforts to inform themselves about relevant electronic information currently or previously in their control;
• they must search for relevant information, sort it, and either disclose it or claim privilege. “Sort” is defined in R.14.02(1);
• they must acquire and disclose relevant information accessible only through a custodian;
• they must disclose details about any computer or storage medium no longer in their possession if it could contain relevant information;
• they must disclose information about any deletion or destruction of relevant information;
• they must disclose all claims of privilege.

As with documents, the obligation to disclose electronic information is ongoing under R.16.03(4) and R.16.10.

Default Disclosure Rules

A party who cannot comply with R.16 must immediately notify each other party and provide a reason (R.16.06(2)), and all parties must then negotiate in good faith with a view to reaching an agreement. If no agreement is forthcoming in a reasonable time, the defaulting party must make a motion for directions under R.16.14.

Default Rules for Actions

Rules 16.07-16.11 and R.16.13 set out default disclosure rules for actions in which the parties cannot agree on electronic disclosure. Rule 16.07 sets the same deadline for delivering both affidavits: 45 days after the close of pleadings.

Rule 16.08(1) defines a “sufficient search” for electronic information in an action: first identifying sources of electronic information in a party’s possession, and then sources they do not actually possess, performing all reasonable searches, including keyword searches, to find the relevant electronic information, identifying people who are likely to have relevant electronic information, and then taking reasonable steps to acquire it. In accordance with Sedona Principles, parties are generally not required to search free space for file fragments, attempt to restore deleted files, or search backup tapes containing only duplicate information.

Rule 16.09 sets out the required content for the affidavit disclosing electronic information, which, like the affidavit disclosing documents, is now sworn or affirmed by the party. The affidavit has four schedules that correspond to schedules A-D in the affidavit disclosing documents. The affidavit must include the same certificate required with an affidavit disclosing documents. The affidavit must be accompanied by a copy of the electronic information referred to in schedule A (R.16.11).

Default Rules for Applications

Rules 16.12-16.13 set out simplified default disclosure rules for applications where the parties cannot agree on electronic disclosure. The Rule does not require the exchange of affidavits. Instead, each party must deliver a copy of the relevant electronic information preserved under R.16.02 with a description that conforms to schedule A of the affidavit. Rule 16.12(3) then obligates the party to answer questions in writing or on discovery about any claim for privilege, measures taken to preserve or acquire relevant information, details of searches made or potential sources of new information. As with actions, in applications, the disclosure obligation is ongoing (R.16.12(5)).

No deadline for disclosure is specified in R.16, as it would likely be set in each case during the motion for directions.

Spoliation

Spoliation is the destruction, mutilation, alteration or concealment of evidence. Rule 16.13 provides that deliberate or reckless deletion, expunging, or destruction of relevant electronic information is an abuse of process dealt with under R.88. Inclusion of reckless deletion indicates that malicious intent is not always required – negligence may be sufficient.

Rule 16.15(2) elaborates that a person who loses relevant electronic information as a result of good faith routine operation of a computer does not commit an abuse of process.

Failure to comply with an order directing preservation of electronic information is dealt with under Rule 89 – Contempt. Rule 16.13 applies to both actions and applications.

Highlights of Changes

The previous Rules addressed electronic disclosure only indirectly, through the definition of “document” in the previous R.1.05(i). “Document” was defined to include “any information generated, recorded or stored by means of any device, including, but not limited to, computers and digital media.”

Practice Tips

Many lawyers will face a steep learning curve to understand enough about technology to navigate R.16 strategically and be able to explain R.16’s obligations to their clients. Firms will need to develop close associations with IT professionals who can advise on the technical side of the e-discovery process.

The Rules allow counsel to tailor their clients’ e-discovery obligations in a manner proportionate to issues and amount at stake in the litigation, but knowing when to agree and when to refuse compromise on the default Rules will require a deep understanding the technology involved and the role that electronic information plays in the case. Insisting on the default Rules in every case will cost clients money unnecessarily; compromising on disclosure obligations inappropriately can mean that a smoking gun goes undiscovered.

Two immediate steps counsel should take when the duty to preserve arises are first, to ensure the client is aware of this duty and determine its scope so that the client can preserve relevant electronic information and limit vulnerability to a claim of spoliation. The second step is to send a preservation letter to the opposing counsel or party setting out your client’s expectations for the opposing party’s preservation of relevant electronic information.

Corporate clients will need advice on implementing or updating their electronic document management protocols to ensure that they will be able to comply with R.16. Not all deletion of electronic information constitutes spoliation. Case law is clear that corporations remain free to implement routine document destruction protocols, but such protocols should provide for immediate suspension when litigation, government investigation or audit is reasonably anticipated. (See Sedona Guideline #5). Clients should be made aware that dusting off and resuming a seldom used document destruction protocol in the face of anticipated litigation is unwise and likely to result in a claim of spoliation.

Further Reading

Every lawyer dealing with e-discovery issues should review Sedona Canada’s full 43-page report: The Sedona Conference Working Group 7 (WG7) Sedona Canada, The Sedona Canada Principles: Addressing Electronic Discovery (The Sedona Conference, January 2008) online: www.thesedonaconference.org or www.lexum.umontreal.ca/e-discovery.

Lexum maintains an online e-discovery portal at www.lexum.umontreal.ca/e-discovery/ that includes regularly updated digests of Canadian e-discovery cases.

PracticePRO offers an extensive e-discovery reading list at www.practicepro.ca/practice/SuppRes2eDiscov.asp.

The Ontario Bar Association maintains an e-discovery portal with downloadable model e-discovery precedents including a meet and confer agreement, preservation agreement, advice memos designed for individual and corporate clients, preservation letters suitable for opposing counsel and a self-represented litigant, and a preservation order.
The portal can be found at: http://oba.org/en/publicaffairs_en/e-discovery/e_discovery_en.aspx.

Canadian e-discovery expert Martin Felsky’s e-discovery blog tracks the latest developments in the field. It is located at www.ediscoverycanada.com.

Todd J. Burke et.al., E-Discovery in Canada (Markham: LexisNexis, 2008) is a useful collection of essays addressing the American experience, Canadian case law, and key e-discovery issues including spoliation, privilege, and cost, along with a lawyer’s IT primer. The appendices include reprints of the Ontario e-discovery Guidelines, the BC Practice Direction on electronic evidence, and the Alberta Queen’s Bench Civil Practice Note 14: Guidelines for the use of Technology in any Civil Litigation Matter.