Legal news and trends for Canadian in-house counsel and c-suite executives
Issue link: https://digital.canadianlawyermag.com/i/50873
proportionality principle. Simply put, some lawyers seem unwilling to embrace the new rules. For them, the notion of coming to the table with the opposi- tion for collaborative discussions goes against their litigation instincts, viewing it as giving up too much in terms of strategy. This mindset means in-house counsel need to make sure lawyers are on board with the new approach. "I've in the past sent papers to outside counsel to have them take a look at, and have discussions about it," says Schweizer. "If I know there's somebody in that lawyer's firm who is maybe a little further along in their thinking on this issue, I some- times ask them to speak to one of their partners or someone else in the group who might know where I'm coming from a little bit more." The rules have certainly put the spotlight on in-house document reten- tion. Tom Donovan, a partner at Cox & Palmer's Halifax office, notes Nova Scotia's new rules make clear that an inadequate record-keeping system is not an excuse when it comes to disclosure. He believes someone will eventually lose out based on that rule, so his firm is encouraging clients to take a proactive approach to maintaining documents. Unfortunately, many of them appear to be unwilling to invest adequately in those efforts. But that's certainly not the case for all. He points out that many construction companies have begun putting relevant documents in litigation databases from the outset, due to the high volume of litigation that surrounds most development projects. Meanwhile, even those lawyers — whether in-house or outside counsel — who are on board with proportion- ality are finding the new rules have at times thrust them into uncharted waters. Many have been caught off guard by the way in which some courts are incorporating the principle more broad- ly than expected. Derek Ricci, a litiga- tion partner at Davies Ward Phillips & Vineberg LLP in Toronto, represents Domino's Pizza of Canada Ltd. in an ongoing matter against Solutions with Impact Inc., which is seeking $2 million in a contract dispute. He was surprised by Master Donald Short's decision in January 2010 to incorporate proportion- ality in a ruling on a motion for separate discovery of witnesses. Neither he nor opposing counsel raised the issue, and Ricci admits the thought never occurred to him, as it was his impression that proportionality would be aimed almost solely at production of documents. Yet Short spent 20 of his 73 paragraphs in the decision explaining how the new rules applied to the examination for dis- covery motion. Short ruled in Ricci's favour in that case, but the example demonstrates the need for all counsel to get up to speed on the new rules to avoid being blindsided. With that in mind, Ricci sees the poten- there so far have not been reports of an explosion of motions in battles over proportionality and discovery plans. It's impossible to say why that is, but Davis' Friedman believes it's because the prin- ciple is working — litigants know their demands must be proportionate. Regardless, corporations defending a case now have the luxury of identify- ing what data could be relevant to the matter, and can proceed by ranking what is most important to finding a resolution. Their counsel can prepare arguments to the other side and out- line what information is proportionate in the context of the particular case. "That's how it's affected deep-pocket players," explains Friedman. "It's given the companies that have a lot of money I think the downside could be in how it's interpreted, and the fact that it isn't a bright-line test. MELANIE SCHWEIZER, Bell Canada tial for the principle to close the gap between deep-pocketed litigants and their less well-off opponents, making it all the more important to think through proportionality early on. "It's sort of the flipside of the coin," he remarks. "If it's going to reduce obligations and costs on smaller files, then the opposite could also be true on multi-hundred-million- dollar lawsuits. Where the stakes are very high, you might have to go further in your document production than you otherwise would." While there have been several deci- sions like Short's in Canada's courts since the new rules have come into play, Enbridge Pipelines Inc. in a matter against BP Canada Energy Co.: canlii.org/en/on/ onsc/doc/2010/2010onsc3796/2 010onsc3796.html the ability to say, 'OK, you can't say to me, just because I'm a $100-million business, I have to do e-discovery that's going to cost $1 million.' That's simply not defensible anymore. I'm entitled to look at this specific case, the issues in this case, what's needed to resolve this case, various burdens on my company — not just costs, but privacy issues, confidential information, the time of my IT staff and my operations people in doing this — into the balance of whether you deserve to get it or not." At the end of the day, that means Friedman's clients are no longer being forced to effectively pay ransom and settle cases because it's cheaper than litigating. So while uncertainty is a reality right now when it comes to cer- tain aspects of proportionality, the new rules have helped turn the tide on the tidal wave of discovery requirements that threatened to create long-term dis- parities in Canada's civil courts. IH INHOUSE APRIL 2011 • 23