Director, Project Management and Counsel
October 1, 2018
The October 2017 decision of Master Graham in 683153 Ontario Limited et al. v. The Manufacturers Life Insurance Company et al. , 2017 ONSC 6024 (CanLII) serves as a cautionary tale for both counsel and clients who are unfamiliar with the complexities of producing discovery documents in electronic format.
Although this was an extreme case of delay, it stands for the broader principle that litigants cannot rely on complexity, costs and eDiscovery problems to excuse them from pursuing the case in an expeditious manner and in compliance with the timelines set out under the rules, particularly when those problems are the result of inexperience of counsel in managing large electronic productions.
This case involves a consolidation of a number of actions commenced between 2000 and 2001 by mortgagors of apartment buildings against the mortgagee, Manufacturer’s Life Insurance Company (“Manulife”). The actions were ordered consolidated in 2012. Under rule 48.14(1), the registrar was to dismiss the action for delay if the action was not set down for trial by January 1, 2017.
In May, 2017 the plaintiffs brought a motion to show cause why the action should not be dismissed for delay. The plaintiffs’ primary excuse for the delay in pursuing the action was that their counsel had difficulty obtaining, reviewing and cataloguing the documents in the possession of the defendant. Master Graham summarized the plaintiffs’ efforts to review and produce the property management records over a thirteen-year period. The highlights of that chronology are as follows:
- In October, 2003 the parties reached an agreement that the plaintiffs would scan Manulife’s relevant records and create a searchable database. Manulife’s lawyers were to receive, free of charge, an electronic copy of the scans with an index in a format compatible with Summation litigation documents database.
- Starting in late 2003 the scanning was undertaken by a litigation support company engaged by the plaintiff’s forensic accountants. The initial estimate was that the scanning would be completed in about three months.
- In the spring of 2005 the plaintiffs were informed by the forensic accountant firm that the projected costs for their analysis of Manulife’s documents had escalated from $200,000 to $500,000. Thereafter the plaintiffs consulted with other advisors and expert witnesses looking for a more efficient and cost-effective means of analyzing the documents.
- On April 30, 2010, plaintiffs’ counsel delivered to Manulife’s counsel three DVDs containing what was represented to be full copies of the scanned documents. Shortly thereafter Manulife wrote to plaintiffs’ counsel to advise that the DVDs did not contain an index, nor were they in a format compatible with Summation software. The plaintiffs were therefore obliged to redo the scanning/coding and index the documents.
- Summation compatible databases were finally delivered to Manulife’s counsel five years later, in August, 2015 and September, 2016, at which point Manulife refused to agree to a timetable for the action.
- The plaintiffs brought a motion for a status hearing which was heard by Master Graham on May 30, 2017.
Plaintiffs’ counsel in this case provided evidence that “he had no previous experience with a case involving a similar quantity of documents.” Manulife’s response was that “given plaintiffs’ counsel’s inexperience in this regard, he should have heeded the suggestion of Manulife’s counsel as to the choice of scanning service provider”. Master Graham concluded that the plaintiffs had not provided satisfactory justification for at least seven of the total thirteen years of delay in the action. In his reasons he states that “this inadequately explained delay is so egregious as to be in itself sufficient ground for dismissal of the action”.
This case serves as an important reminder for litigation counsel who increasingly have to manage the review and production of large, complex document sets that if you don’t know how to handle a large eDiscovery production it is incumbent upon you to seek competent outside assistance so as to avoid undue costs and delays for your client which may ultimately jeopardise their case.