Canadian Lawyer

BY JASON LEUNG TECH SUPPORT firm doesn't already have a document retention and destruction policy for both paper and electronic files, it should implement one as soon as possible. T Law firms need document retention policies too his article will discuss document retention and destruction practices that Canadian law firms are using today. If your law ations of malpractice or assessments of account. A negligence claim can be made long after the alleged incident has occurred. Also, lawyers should retain records to Why does my firm need to retain documents from closed client files? There are legal and regulatory require- ments regarding document retention. The Ontario Limitations Act 2002 mandates a basic limitation period of two years for actions against lawyers for negligence and actions for the recovery of purely financial loss caused by professional negligence. There is also an "ultimate" 15-year lim- itation prescribed in the act, which runs for 15 years after the date of the occur- rence giving rise to the claim, even if the material facts have not been discovered. Furthermore, no limitation period exists for criminal conduct or misconduct. The Law Society of Upper Canada bylaws, for instance, require all records other than trust account records be kept for at least six years. Trust account records must be retained for at least 10 years. Whether the files are stored electronically or otherwise, documents must be "readily accessible" within a 30-day time frame. The Income Tax Act requires all records and books of account be retained for six years from the end of the taxation year of such records. The Income Tax Act allows for such records to be stored electronically as long as they are "electronically readable. An important reason for retaining " documents from closed client files is they may be material to defending future alleg- help them maintain an effective and effi- cient practice. Valuable precedents and legal research memoranda often have their genesis in ongoing client matters. Once a client matter is completed, the lawyer should consider whether file material can be put to such beneficial uses. However, delete or block out client information so it is not inadvertently disclosed when the document is used as a precedent. Closing a file A file' which the responsible lawyer has deter- mined the matter has been completed and, in some cases, a file destruction date has been set. Most lawyers consider a file closed when all matters set out in the retainer have been dealt with and accounting issues have been settled. A firm' s closing date is generally the date on include specific requirements for some practice areas. For example, Stephen Mull- ings, a partner at the insurance litigation firm Dutton Brock LLP, says when an insurance litigation case arrives at a settle- ment, his firm specifically requires the following prior to closing the file: (i) ori- ginal executed full and final releases; (ii) a dismissal order with respect to all claims and crossclaims, on a without-costs basis (in some cases a notice of discontinuance may suffice); (iii) settlement funds have been issued to the plaintiff; and (iv) all accounts in the matter have been satisfied. Joseph Neuberger, the managing part- s policy for closing files may ner at criminal defence firm Neuberger Rose LLP, says files remain open at his firm until: (i) the case is concluded, such as where a trial has been completed and 18 OCTO BER 2012 www.CANADIAN Lawyermag.com the appeal period has passed; (ii) the final account has been settled; and (iii) if necessary, the Crown disclosure has been returned. John Gillies, the director of practice support at Cassels Brock LLP, says his firm' file of documents already stored in the firm' systems. At Ridout & Maybee LLP, if any documents can be retrieved or repro- duced from another source, including documents available on a public registry, we strip these documents from the file. Eugene Cipparone, the director of pro- s practice includes stripping the paper s document management or e-mail fessional support at Goodmans LLP, says his firm conducts an annual review of files that show no recent activity and have no work in progress, trust funds, or accounts receivable. When such a file is identified, the responsible lawyer is told the file will be closed unless he or she requests that it remain open. It is important to ensure the file is marked as being closed and maintain a record to identify all closed files. This record should include the file closing date and, if applicable, the file destruction date. Document storage Many Canadian law firms store closed paper files in a secure offsite location to maintain client confidentiality and be pro- tected against damage or loss. However, the files must also be retrievable within 30 days. One of the disadvantages of storing paper files is the cost associated with ship- ping the paper files to and renting space in a storage facility. Storage facilities gener- ally charge about 25 cents per box per year, and these costs can add up significantly. Electronic storage is generally more economical and this is one of the reasons many firms, including my own, have been

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