American lawyers seeking to obtain discovery of witnesses, documents or electronic records in Ontario, Canada's most populous and litigation-prone province, have long been aware that the scope of discovery there--and in other Canadian jurisdictions--is considerably narrower than it is in the U.S.
This, of course, is a boon to corporate defendants for whom the cost of discovery will be significantly lower if a plaintiff who has a choice of forum chooses to sue in Canada rather than the U.S.
"The gap in discovery is so wide that Canadian plaintiffs involved in parallel class actions routinely obtain the results of the U.S. discovery from plaintiffs' counsel in the U.S. to help them investigate, frame and pursue their case," says Malcolm Ruby, a partner at Gowling Lafleur Henderson, who specializes in cross-border civil litigation.
But with the introduction of amendments to the discovery provisions of Ontario's Rules of Civil Procedure in this month (see "Reduce Abuse"), understanding how different discovery is in the U.S. and Canada has become more difficult and uncertain. That's largely because the rules, which purport to embrace certain American concepts, do so in the context of a discovery regime whose underlying principles depart significantly from the U.S. context.
The most obvious example involves the proportionality doctrine, the purpose of which is to prevent abuse of the litigation process by subjecting parties to unreasonable requests for information.
"Incorporation of the proportionality doctrine is one of the most significant changes in the rules," says Lang Michener Lawyer Stephen Maddex, who practiced as a litigator in the U.S. for eight years before returning to Canada. "But given that discovery is already so narrow in Ontario, it's unclear to me what role proportionality could play in the process."
The proportionality doctrine, incorporated as Rule 29.2 in Ontario's new rules, states that the right to conduct discovery must be weighed against the time, expense and undue burden the producing party bears. As such, it is based on and nearly identical to the U.S.'s Rule 26(b)(2) of the Federal Rules of Practice.
U.S. courts have held that information is "relevant" and discoverable if there is any possibility it may be relevant to the claim or defense. Unless it is clear that the information sought can have no possible bearing on the claims or defenses, discovery is allowed.
To balance this broad approach in the U.S., the proportionality doctrine expressed in Rule 26(b)(2) permits the responding party to object to discovery on the basis that producing the requested information would be unduly burdensome. To establish undue burden, the responding party must show that the information requested is of such marginal relevance that the potential harm the discovery may cause outweighs the presumption in favor of broad disclosure.
"The proportionality doctrine in the U.S. is designed to eliminate only information that lies at the outer limits of what could be regarded as discoverable in U.S. practice, which is to say information that is really not relevant to the dispute at all and would be unduly burdensome to produce," Maddex says.
Under the new Canadian rules, however, only information that is truly relevant to the case must be disclosed.
"It's unclear to me what role, if any, proportionality could play when determining a litigant's responsibility to disclose information that is truly relevant," Maddex says. "For example, should litigants be permitted to refuse to disclose truly relevant information on the basis that it would be too time consuming, costly or otherwise burdensome to produce?"
On this interpretation, the new rules could constrict discovery in Canada even more for American companies or their subsidiaries subjected to litigation in Canada, as well as for parties to U.S. litigation who have obtained rogatory letters allowing them to examine witnesses in Canada.
"Canadian courts have been clear that parties to U.S. litigation seeking to examine a witness in Canada can't get more discovery than parties to Canadian litigation," says Duncan Boswell, Ruby's partner at Gowling Lafleur Henderson.
Susan Wortzman of Wortzman Nickle, a firm that specializes in e-discovery, says the amendment is not aimed at reducing the scope of what is relevant but rather at ensuring that only the most probative and accessible relevant material is produced.
To that end, the rules require the parties to agree on a discovery plan.
"The idea is to figure out what documents are really required, instead of requiring production of every piece of paper that's marginally relevant," she says. "And that's what the U.S. rules are aimed at in a general sense."
One of the advantages of discovery plans is that they encourage an incremental approach to limiting discovery.
"A reasonable approach in a complicated case might be to limit an e-discovery search to certain search terms that will yield 25,000 instead of 125,000 documents," Wortzman says. "After the first pass, which should yield the most relevant results, it should be easier for the parties to determine what else, if anything, is needed."
Access and Affadavits
Maddex, however, warns that an incremental approach could be counterproductive in some cases. For example, where the evidence that really matters is in the least accessible location, such as deleted files on backup tapes, and the information in the most accessible locations has little relevance, a court that takes an incremental approach by ordering the parties to disclose only the most easily accessible information first would actually be wasting resources.
"It's impossible to assess the relative importance of any one piece of evidence unless the parties can fully and fairly evaluate all of the potentially relevant information at the same time," Maddex says.
It's also important to remember that the Canadian discovery system is not initiated by a request for documents from the adverse party. Rather, each party has a duty to file an affidavit listing all the relevant documents, setting it apart from the process used in the U.S., where the scope of a party's duty to produce documents springs from the breadth of the request made by the other side.
"In the U.S., the response to a refusal to deliver requested documents is a motion to compel production, which is where the proportionality principle comes in," Maddex says. "But challenging an affidavit on production in Canada is tantamount to attacking a lawyer's exercise of his or her ethical responsibilities."