What Happens in Canada When You Fail to Preserve and Produce ESI

Association of Certified E-Discovery Specialists (ACEDS)

A recent decision from the Supreme Court of British Columbia illustrates how litigants may find themselves in trouble with the court and opposing counsel when they fail to properly preserve and produce electronically stored information (ESI) in discovery.

In Zhang v. 328633 B.C. Ltd, et al., 2021 BCSC 650, the plaintiff, Zhang, brought suit for injuries sustained during an automobile accident that occurred in 2013. The bus on which Zhang was riding as a passenger was cut off by an unidentified vehicle, forcing the bus driver to stop abruptly and throwing the elderly Zhang from her seat. Zhang sustained multiple injuries.

Because the driver of the other vehicle was never identified, Insurance Corporation of British Columbia appeared as defendant in the action, along with company that operated the bus.

The entire accident was captured on video and, even though the defendants knew of the existence of the video and had possession and control of the video, during discovery they did not disclose the video to plaintiff.

Fast-forward seven years and the case is set for trial, and the defendants finally disclose the video.

Mr. Justice Branch found that while the bulk of liability should be allocated to the driver of the unidentified vehicle, the trial judge also found the bus driver partially negligent. He found that the bus traveled at an unnecessarily high rate of speed and the driver did not better observe the unidentified vehicle. Damages were awarded to Zhang.

Post-trial, the parties made various applications related to damages and costs. Plaintiff applied for special costs related to the failure of defendants to disclose the video for seven years.

The Court found that the delayed disclosure of the video supported an award of special costs. Mr. Justice Branch wrote: “The footage was clear and overwhelming evidence as to what actually occurred and was so integral to the case on liability that the production delay rises to the level of ‘reprehensible conduct’. The defendants offered no explanation for their late disclosure.”

The court concluded that conduct which makes the resolution of an issue far more difficult than it should have been attracts an award of special costs.

This is entirely consistent with contemporary practice in Canada and the court’s conclusion is further supported by the recently released Sedona Canada Principles Addressing Electronic Discovery, Third Edition (Sedona Canada), released for public comment last month.

There can be no doubt that the video at issue in the Zhang case constitutes ESI that was discoverable. Sedona Canada Principle 1, court rulings, and provincial rules across Canada make clear that a video tape recording of an accident that surfaces in litigation about that accident is a record or document and is relevant.

Notably, although the court did not mention it, the defendants in Zhang must have understood their discovery obligations –at least the duty preserve relevant ESI under Sedona Canada Principles 3—because they did in fact preserve the video. They just failed to disclose it.

While it is not possible to know precisely why the defendants in Zhang chose not to disclose the video or why the Plaintiff did not enquire about its existence and demand its production, it is reasonable to conclude that the defense either did not realize they were obligated to produce the video, or they deliberately chose not to disclose it. Either way, there were consequences for the failure to disclose it because the Court awarded sanctions in the form of special costs against the defendants.

The Zhang case clearly illustrates the need for continued e-discovery training in Canada.  In the fall of 2019, the Federation of Law Societies of Canada amended its Model Code of Professional Conduct to add the following commentary with respect to technological competence:

To maintain the required level of competence, a lawyer should develop an understanding of, and ability to use, technology relevant to the nature and area of the lawyer’s practice and responsibilities. A lawyer should understand the benefits and risks associated with relevant technology, recognizing the lawyer’s duty to protect confidential information set out in section 3.3.

The outcome in the Zhang case is a reminder that the failure to properly identify, preserve and produce ESI can and should no longer be ignored.

Contributions were made to this article by several of the Canadian subject matter experts who helped to develop the CEDS Canada certification exam. We are thankful for their insights and contributions.

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Association of Certified E-Discovery Specialists (ACEDS)
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