The issue of cost allocation of electronic information in the context of the discovery process has not been resolved in Canada. As a general rule, the interim costs of preservation, retrieval, review and production of electronic records is borne by the party producing them. Similarly, the opposing party is required to incur the cost of making a copy for its own use, just as it had previously with paper documents. There has been a hesitancy on the part of the Canadian judiciary to make other cost-shifting orders as costs in Canada are generally awarded at the final stage of litigation.
Then comes e-discovery which has given rise to a radical expansion in the quantity and type of disclosure. Sedona Canada Principle 12 clearly provides for cost sharing or shifting before the final stage of litigation either by agreement of the parties or by court order.
Master Brott of the Ontario Superior Court has recently made such an interim costs order. In Borst v. Zilli,O.J. No. 4115, the parties agreed to retain an independent computer consultant (“ICC”) to copy the defendants’ computer data. They also agreed to retain an independent solicitor (“ISS”) to review the documentation for relevancy and privilege before it be produced to the plaintiffs. The Court held that the costs of the ICC should be borne by the plaintiffs in this case and that the costs of the ISS should be shared equally between the parties.
Litigants beware – Canadian courts are starting to make interim cost-shifting awards with respect to accessible electronic records! If you are concerned about the costs of your e-discovery litigation and how to best manage e-discovery in Canada, contact Wortzman Nickle.