Balancing privacy with e-discovery

E-discovery has wrought a measure of confusion as the Canadian legal system struggles to adapt to the rapid injection of the Information Age into the civil litigation process. Behind much of the confusion is the sense of an intuitive link and/or conflict between the discovery of electronic documents and modern notions of privacy.

To some extent that's overblown: the truth is that most federal and provincial privacy statutes defer to the court process.

"It's important to remember that so-called privacy legislation is really data protection legislation that deals primarily with the commercial use of private information," says Janet Allinson of London, Ont.'s Siskind Cromarty Ivey & Dowler LLP.

"The driving force behind PIPEDA [Personal Information Protection & Electronic Documents Act, a federal statute], for example, is the search for a balance between the privacy rights of individuals and commercial activity."

Indeed, PIPEDA and similar provincial statutes tend to distance themselves from setting rules for the discovery process.

"Most privacy laws exempt judicially ordered production from their application," says Ariane Siegel of Gowling Lafleur Henderson LLP in Toronto.

That's not to say that there aren't some problems. Section 7(3)(c) of PIPEDA, for example, permits the disclosure of personal information without consent where the disclosure is required to comply with a subpoena or a warrant or an order made by a court or to comply with court rules relating to production of records.

"On its face, this exception resolves any issues regarding documentary discovery," says Jeffrey Kaufman of Fasken Martineau DuMoulin LLP's Toronto office, "but it leaves the process of oral examinations open to question, and has opened the door for counsel to refuse questions put to their clients on examination or cross-examination on the basis that the answer consists of personal information the disclosure of which is prohibited by PIPEDA."

When courts are forced to take privacy issues into account, they are most often driven back to common law considerations that they must apply in the context of electronic discovery.

But there has been little direct case law on the subject. In one celebrated case, Genuity v. CIBC, involving the high-profile departure of several high-level investment bank employees from CIBC, Justice James Farley, now retired but then of the Ontario Superior Court's Commercial List, ordered some of the defendants to turn over not only their own computers but those of their families.

Unfortunately, Farley did not give extensive reasons for his order -- odd given its very broad scope.
More instructive is June's Baldwin Janzen Insurance Services (2004) Ltd. v. Janzen, a decision from B.C. Supreme Court Justice Mary Humphries.

The plaintiff, Baldwin Janzen Insurance Services (BJIS) bought an insurance agency in White Rock, B.C. The company's predecessor employed Andrew Janzen as an insurance broker until he resigned when the company was sold to a third party, who later sold certain assets to the plaintiff.

The plaintiff, which had taken an assignment of the causes of action against Janzen from the vendor, launched a lawsuit in which it claimed that Janzen had breached his fiduciary duty by using confidential information and soliciting its clients.

Janzen, who was not subject to a restrictive covenant, denied the allegations.

The plaintiff obtained an Anton Piller order that was later set aside -- but not until after the search was executed ? as having been based on improper and inadequate material.

During the search, the plaintiff seized images of three hard drives from Janzen's personal computers. The plaintiff retained a forensic expert who created a mirror-image copy of the hard drives.

After the court set aside the Anton Piller order, the plaintiff sought production of that mirror image. It argued that the image was the appropriate item to produce rather than the three original hard drives because of the possibility that there had been alterations to the hard drive since the date of the search.

The plaintiff also argued that the mirror image was important because it could identify when a document was created or produced, the name of the author, dates of alteration, and whether the data was shared with other computers. A mirror image also allowed an expert to recover deleted documents that had not been completely overwritten.

In order to preserve the defendant's privacy, the plaintiff suggested that its expert receive the image under strict terms. These included production by the expert of a list of what the image contained based on a search using 22,987 specific search terms.

The plaintiff further proposed that after the defendant reviewed the list for privilege and relevance, the proper documents could be produced.

But Humphries would have none of it.
She acknowledged that the defendant had legitimate privacy concerns, but noted that methods were available to address those concerns "within the normal parameters of discovery."

However, it was also necessary to go back to first principles and separate relevant from irrelevant materials.
"An entire [hard disk drive] may be a relevant document, depending on the nature of the case," Humphries wrote. "On the other hand, it may simply be a receptacle for documents from a myriad of sources, some of which are relevant, and some of which are not."

Here the entire hard disk was not relevant to what was "a conventional type of case."

"Although relevant documents, even for a traditional cause of action, may and likely will be recorded electronically, this is not a situation where the computer system itself or its components are integral to the proof of the claim," Humphries concluded.

Humphries also rejected the argument that an image search might turn up files that were otherwise inaccessible because they had been deleted from the current versions of the hard drives.

"It is not appropriate to order the production of the mirror image [disk drive] simply because it exists and because there is interesting technology that one might apply to it, even assuming authority exists to order such a search outside an Anton Piller order," she wrote.

In this case, then, privacy concerns were paramount.
Russell Zinn of Ogilvy Renault's Toronto office argues, however, that privacy was not necessarily the driving factor behind Humphrey's ruling.

"The result would not have been different without a consideration of privacy concerns," Zinn told Law Times.
Still, it's a start.

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