Presumptively, parties are entitled to access each other’s non-privileged documents during the discovery stage of litigation. This presumption supports the fundamental idea that parties should provide each other with full disclosure of relevant documents as part of the litigation process.
Fulsome disclosure can involve production of information that is not otherwise publicly available – think trade secrets, client lists, supplier contracts, or medical records. Where this is the case, a party may ask the court to make a protective order, which controls who sees this sensitive information and prevents it from being made public.
Before a party asks for a protective order, it should probably read the Ontario Superior Court decision from 2021 titled Sinopoli v General Motors Company (2021 ONSC 244). This case provides thorough guidance as to when a protective order is appropriate. It is useful both for a party requesting a protective order and for a party who believes a protective order is being improperly requested.
The Facts
Sinopoli concerned an alleged defective ignition switch in a vehicle designed and sold by General Motors (“GM”) that was involved in a motor vehicle accident in 2014. The plaintiff alleged that the defective ignition switch caused the steering wheel to lock, resulting in the accident.
The defendant GM requested a protective order that captured a broad range of its documents and gave GM considerable power to redact documents or otherwise label documents as confidential.
The court dismissed GM’s request for a protective order.
Factors for Granting a Protective Order
The court endorsed the following factors to be considered when exercising discretion whether to grant a protective order:
- The “open court” principle is a “cornerstone of the common law” and is a principle not of convenience but of necessity.
- The presumption is that parties should have access to each other’s productions. Consequently, the burden of demonstrating that the court should deviate from such a presumption rests upon the person asking for the protective order.
- Departures from the open court principle should be undertaken only in clear cases and to the minimum extent necessary after an appropriate balancing of interests.
- The court does have jurisdiction to grant a protective order in circumstances where unlimited production will prejudice a party.
- A protective order should strike a balance between the disclosure necessary for an action to move forward and a party’s bona fide right to protect confidential and sensitive information.
- Overbroad and blanket orders should be avoided, particularly where applied to hypothetical situations as opposed to actual documents and actual circumstances.
- To be entitled to a protective order, a party must show that the risk of harm is real and substantial. Speculation is not sufficient. An adequate factual basis must be provided.
In a 2022 decision from the Ontario Superior Court titled Edgetech HVAC Services Ltd. v Aneja (2022 ONSC 3360), Edgetech failed to demonstrate a real and substantial risk of serious financial harm to it if its competitor had access to Edgetech’s financial statements, as would be revealed through documentary productions. Instead, the court found that Edgetech’s evidence was speculation and hypotheticals of what could happen if its competitor accessed the financial statements.
In its reasons, the court confirmed certain considerations that apply to requests for protective orders over documents containing commercial information:
- A protective order may be made if a party would risk serious financial harm should the information be available to a competitor.
- If the court is satisfied that:
- the information is confidential;
- the information is commercially sensitive; and
- a competitor could obtain an unfair advantage through the information’s release,
the moving party will be prima facie entitled to a protective order unless the responding party would be unduly prejudiced by such an order.
- Where disclosing the information would allow a competitor to improve its competitive position, it is appropriate that a protective order be issued.
Conclusion
Protective orders can be a helpful tool for parties to ensure their confidential information is adequately shielded from the public domain during litigation. However, courts will consider not only the need to shield properly confidential information, but also the need for all parties to disclose relevant documents during litigation. Sinopoli and Edgetech provide litigants on both sides of a protective order request with crucial guidance as to when such a request is appropriate.
About the author
Caroline Bedard practices civil litigation in Ottawa at Merovitz Potechin LLP. She sits on the executive committee for the OBA Young Lawyers Division East Region, serving as the newsletter editor. Caroline can be found at https://www.merovitzpotechin.com/our-team/caroline-bedard/.
Any article or other information or content expressed or made available in this Section is that of the respective author(s) and not of the OBA.