Discovery in Class Actions: The Scope of Parties’ Obligations
“Discovery” is a broad term that describes the procedure by which evidence is obtained and collected for the purposes of litigation. Each party has the right to see all of the relevant documentary evidence in a party’s possession, and to examine the other parties orally, in order to understand the evidence that will be used to prove the claim and advance the defence. Discovery is potentially more challenging in a class action than in other types of litigation, due to the time frame of the events at issue, complexity of the subject matter, and prospect that litigation will span a number of years.
In Ontario, the Rules of Civil Procedure provide that every party to an action has the obligation to disclose “every document relevant to any matter in issue in an action that is or has been in the possession, control or power of a party”, whether the documents are favourable or not. This obligation is very broad, and is ongoing throughout the life of the litigation. While subject to principles of proportionality, it will not simply be the case that because a class claim requires the production of a large number of documents or sensitive information from a defendant, that a defendant will be immune to any obligations imposed by the Rules.
For a defendant named in a class action, it is important to consider the impact of discovery obligations at the outset, and to work with counsel to develop a strategy for the production, management, retention and protection of all relevant documents.
Management and Preservation of Relevant Documents is Key
One of the primary considerations at the beginning of an action is the management and preservation of relevant documents that will need to be produced at a later stage. Even though discovery may not occur for an extended period of time until after certification, once a party is named, that party has an obligation to ensure that relevant documentary evidence is preserved. Corporations’ document retention policies vary widely. In particular, for cases in which the allegations are sweeping and extend back a number of years, it is possible that documents that are captured by the discovery rules have been destroyed, lost, or otherwise not effectively managed. Once litigation has been commenced, it is imperative to examine such policies and consider how to best preserve evidence.
The consequence of failing to produce relevant documentary evidence, due to destruction or otherwise, can be severe. If the undisclosed documents are favourable, a party is precluded from being able to use them at trial. If unfavourable documents are withheld or destroyed, it can result in dismissal of the action, if the party is a plaintiff, or striking out the statement of defence, if the party is a defendant.
Confidentiality Issues Must be Considered
It is also important to consider the nature of the documents that will be produced. There are often documents a party has in their possession, or must rely on for the purposes of certification, that contain sensitive, technical, proprietary, or otherwise confidential information. This is particularly true for class actions, in which many allegations tend to center around the way a defendant manufactures a certain product, conducts its business, or deals with its employees and customers. The Deemed Undertaking Rule in Ontario provides that every party and their counsel are deemed to undertake not to use any evidence or information produced further to a party’s discovery obligations for any purpose other than for the litigation. As was discussed in Robinson v. Medtronic Inc., the Rule may be insufficient to protect sensitive information in certain circumstances.
In Robinson Justice Perell rejected the defendant’s argument that a confidentiality order was necessary. However, he did conclude that in class actions in particular, it was appropriate to exercise the broad discretion available through s. 12 of the Class Proceedings Act to make appropriate orders to ensure a fair procedure was put in place. It was held that, with certain modifications including filing procedures, the deemed undertaking rule was generally adequate to protect the privacy of the parties. It was further ordered that documents be disclosed to members of the class only with approval of court order, because in a class action, requiring productions be available to all class members could mean the release of information to any number of people, and some not necessarily bound by Ontario’s Rules. Whether such modifications are adequate in the circumstances of each case, or whether a confidentiality order is necessary, will be important to determine at the outset before any evidentiary disclosure. As cited by Robinson, “The interests of proper administration of justice require that there should be no disincentive to full and frank discovery.”
Though a party’s obligations are broad, the discovery rules aim toward a principled approach to ensure that no party is unduly prejudiced by having to meet these requirements.
Throughout this series we will discuss specific aspects of the discovery rules, how rules compare across other jurisdictions, and the implications of the procedures as they relate class actions. Coming up next: Discovery and Defending Certification.
 Ontario R 30.02(1)
 Ontario R. 30.08
 Ontario Rule 30.1.
 2011 ONSC 3663